Monday, June 10, 2013

FDA warning letter doesn't trigger primary jurisdiction doctrine

Velasco v. SEI Pharmaceuticals, Inc., 2013 WL 2444646 (S.D. Cal.)

SEI made a supplement, MethylHex 4,2, claiming to provide an “elevated sense of well-being, improved mood, increased CLEAN energy, suppressed appetite and heightened focus,” in addition to being “a powerful CNS stimulant, for added energy, increased clarity and a boost in physical performance, especially valuable to athletes during calorie restriction or when a high level of focus is needed.” The supplement lists a substance known as DMAA as one of its ingredients. While the product label claimed that its DMAA consisted of “Geranium Extract Leaves and Stem,” but plaintiff alleged that it was instead synthetic. The FDA sent a warning letter to SEI stating that synthetic DMAA isn’t a “dietary ingredient” under the DSHEA and thus couldn’t be used as an active ingredient in a supplement.  Also, the FDA has received 42 adverse event reports on products containing DMAA, some including complaints of cardiac disorders, nervous system disorders, psychiatric disorders, and death.  Plaintiff allegedly bought the product in reliance on SEI’s misrepresentations about the product’s safety, efficacy and legality, and asserted the usual California claims.

SEI moved to dismiss (or stay) based on the primary jurisdiction doctrine.  Velasco responded that, given the warning letter, the FDA had already substantially performed its regulatory functions, and the issue weren’t within the FDA’s exclusive jurisdiction.  The primary jurisdiction doctrine should be used only if a claim requires resolution of an issue of first impression, or if there’s a particularly complicated issue committed to a regulatory agency and protecting the integrity of a regulatory scheme dictates preliminary resort to that agency.

The FDA’s warning letter told SEI to immediately cease distribution of the supplement.  SEI argued that this was only preliminary action, and that the warning letter specifically contemplated further FDA action.  SEI conceded that it had complied with the FDA’s request to cease distribution.  There was no indication that the FDA had acted since the warning letter in April 2012, and no evidence that future action was likely.  Nor did SEI identify an available procedure for the parties to seek an administrative ruling from the FDA about this matter if the court got rid of the case. Thus, the court declined to apply the primary jurisdiction doctrine.

Separately, SEI argued that the class allegations should be dismissed or struck because whether the class members read and relied on the package statements required individual analysis and wasn’t suitable for class treatment. Though the parties disputed whether reliance could be presumed on a classwide basis in a case of this type (spoiler: yes), this was not an appropriate issue to resolve on a motion to dismiss or strike class allegations, but rather on a motion for class certification.

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