Tuesday, May 15, 2012

Out of joint: supplement case survives motion to dismiss

Cardenas v. NBTY, Inc., 2012 WL 1593196 (E.D. Cal.)

Cardenas brought a putative class action against NBTY and Rexall for selling Osteo-Bi Flex joint health supplements without support for the efficacy claims they made.  She alleged violations of the CLRA and UCL as well as breach of express warranty. The court denied defendants’ motion to dismiss.

Cardenas alleged that she read the front, back and sides of the package and, in reliance on the representations, bought the product for her joint pain.  But it didn’t help to promote mobility, renew cartilage, maintain healthy connective tissue, or improve joint comfort, as represented.  Defendants allegedly promote these benefits as a result of the products’ ingredients, especially the primary active ingredient, glucosamine hydrochloride.  This is an amino sugar that the body produces and distributes in cartilage and other connective tissue, but Cardenas alleged that there was no competent and reliable scientific evidence that taking glucosamine (especially orally) leads the body to metabolize it in a way that provides the promised benefits.  “Clinical cause and effect studies have found no causative link between glucosamine hydrochloride supplementation and joint renewal or rejuvenation.”  She made similar allegations about other ingredients (chondroitin, methylsulfonylmethane, hyaluronic acid, vitamin D, vitamin C, manganese, boron, or collagen).

Most Osteo Bi-Flex products also contain 5–LOXIN Advanced, a concentrated extract of Boswellia Serrata (“AKBA”). (Previous litigation related to the matter.)  Defendants claim that AKBA results in “improvement in joint comfort within 7 days,” but Cardenas alleged that there was no competent and reliable scientific evidence that taking AKBA (especially orally) provided the promised benefits, and that clinical cause and effect studies had been “unable to confirm” any relationship between AKBA supplementation and joint renewal or rejuvenation. 

The product packages say that two studies support the claim that Osteo Bi-Flex users “show[] improvement in joint comfort,” but don’t provide information on locating the studies.

Defendants argued that Cardenas lacked standing to bring claims about product varieties she didn’t buy and ads she didn’t view.  They also argued that claims of missing substantiation aren’t actionable, and that her allegations about clinical studies were conclusory and didn’t explain what representations were false or misleading.

On standing, the court found her allegations sufficed to allege injury in fact traceable to the defendants’ acts and redressable by a court decision.  She at least had standing as to the Regular Strength product she bought and the representations on its packaging.  These allegations also satisfied the UCL’s requirement of economic injury—she allegedly lost money on an ineffective product.

What about standing for other products/ads?  Some cases say there’s no standing to sue based on such things, but other cases take a different approach, asking in traditional class action style whether the claims have the same core factual allegations and causes of action.  This is right: if we both saw the same claim, it shouldn’t matter for standing that you saw it on TV and I saw it in the newspaper any more than it should matter if I saw it on my copy of the newspaper and you saw it in yours.  The treatises and the vast weight of authority are in agreement here: “whether a class representative may be allowed to present claims on behalf of others who have similar, but not identical, interests depends not on standing, but on an assessment of typicality and adequacy of representation.”  Thus, Cardenas had standing to assert her UCL and CLRA claims based on her purchase of Osteo Bi-Flex Regular Strength “and the product’s more general representations that its line of Osteo Bi-Flex products, which ostensibly share many similarities in ingredients, ‘improve mobility,’ ‘improve joint comfort,’ and ‘support[ ] renewal of cartilage.’”  Rule 23 analysis would determine whether she could present claims on behalf of purchasers of other Osteo Bi-Flex products.

Next, the court turned to Rule 9(b), which the Ninth Circuit has held applies to CLRA and UCL claims where a plaintiff alleges that a defendant engaged in fraudulent conduct.  Cardenas specifically asserted that defendants failed to disclose material facts when they knew or should have known that the representations were unsubstantiated, and these were allegations sounding in fraud.  Cardenas didn’t allege scienter as an inherent part of her UCL claim, but it was difficult for the court to distinguish which parts of her UCL claim sounded in fraud and the court ultimately found that the UCL claim as a whole also needed to meet Rule 9(b)’s standards, even though not all claims of false advertising are necessarily grounded in fraud.  In any event, the court found that the complaint sufficiently alleged nondisclosure and scienter, and she alleged justifiable reliance and resulting damage as well.  The allegation that clinical cause and effect studies had found no link between the individual ingredients and the purported benefits of Osteo Bi-Flex was sufficient on falsity, since defendants’ representations seemed to be based at least in part on the asserted efficacy of individual ingredients.  If Cardenas’s claims about the studies are true, “then it stands to reason that Defendants' representations that AKBA ‘help[s] with joint flare-ups’ are actually false.  Because Defendants bolster their overarching claims of joint benefits by referring to the importance and efficacy of a particular ingredient which, if Plaintiff is to be believed, has no actual joint benefits, then Defendants' overarching claims are most likely false as well.”  It was the same with the other ingredients.  The complaint provided defendants of sufficient notice of the alleged fraud, allowing them to prepare an adequate defense.

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