Thursday, July 16, 2015

CD Cal rejects In re GNC for all the right reasons

Zakaria v. Gerber Products Co., No. 15-cv-00200 (C.D. Cal. July 14, 2015)
Zakaria sued Gerber, bringing the usual California claims, based on Gerber’s alleged misrepresentations that Good Start Gentle infant formula reduces the risk to infants of developing atopic dermatitis, a form of eczema, and that the FDA endorsed these false health claims. The court denied Gerber’s motion to dismiss, holding that Zakaria adequately alleged falsity, in part based on Zakaria’s allegations about a study that concluded there was no evidence that the consumption by an infant of partially hydrolyzed whey formula (like Good Start Gentle) reduced the risk of allergic reactions, including eczema.
Gerber moved to reconsider based on In re GNC.  Here, the court nails the problems with In re GNC, which I hope will be corrected on rehearing.  The Fourth Circuit held that, “so long as there is a ‘reasonable difference of scientific opinion’ as to the merits of a manufacturer’s health claim, the alleged actual falsehood of that health claim cannot be the basis for a cause of action under several consumer protection laws, including the California UCL and CLRA.”  The In re GNC complaint failed to allege that no reasonable expert could support defendant’s statements, so it was dismissed.
The court here began by noting that In re GNC contained “little analysis” of the relevant California laws, relying instead on the Lanham Act.  But Zakaria’s claims were based on California law.  There were no California cases consistent with In re GNC.  California law bars representations that are false or true but misleading.  The complaint here met that standard as it has been interpreted by federal district courts.  See, e.g., Hesano v. Iovate Health Sciences, Inc., 2014 WL 197719, at *3 (S.D. Cal. Jan. 15, 2014) (actual falsehood may be pleaded by “alleging studies showing that a defendant's statement is false”); Cardenas v. NBTY, Inc., 870 F. Supp. 2d 984, 995 (E.D. Cal. 2012) (denying motion to dismiss based on “clinical cause and effect studies [that] have found no causative link” between the supplement at issue and the defendants’ health claim); Fraker v. Bayer Corp., 2009 WL 5865687, at *8 (E.D. Cal. Oct. 6, 2009) (“To successfully allege a claim for false advertising, Plaintiff has the burden to plead and prove facts that show that the claims that Defendant made in connection with product are false or misleading.”).  By contrast, the California case cited by In re GNC involved a complaint that didn’t allege any scientific authority contradicting the defendant’s health claims.  Requiring some factual support for falsity allegations isn’t the same as requiring a plaintiff to allege that all studies and experts are in accord.
Second, “the falsehood alleged by Plaintiff is not that all experts agree that Defendant’s product lacks a health benefit, but rather that the product in fact lacks that benefit… If some reasonable experts incorrectly had opined that Good Start Gentle had this health benefit, this would not necessarily bar the claim.” Gerber’s knowledge could be at issue (for the claims that require intent).  Also, inconclusive scientific evidence may mean the plaintiff fails to carry her burden, since mere lack of substantiation is insufficient for a private claim.  “However, these issues may not always be resolved without the development of some factual record, which would preclude their resolution on a motion to dismiss.”  Yes!
Third, Zakaria’s theories went beyond knowing falsity. She also alleged that Gerber misstated the FDA’s support of the health claims of Good Start Gentle.  Even In re GNC “left open the possibility that a false advertising claim could be brought where a manufacturer made representations that implied greater support for its health claims than were present.”

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