a twist on substantiation claims in consumer protection cases

In re Bayer Heathcare and Merial Ltd. Flea Control Prods., --- F.3d ----, 2014 WL 2209024 (6^th Cir. May 29, 2014)

In this multidistrict litigation, the district court dismissed the claims after limited discovery, and the court of appeals affirmed. 

Defendants claimed that their flea control products dispersed over pets’ bodies via the skin/hair after being applied to one area.  To streamline the case, the district court framed it as turning on a single issue—whether these claims were substantiated.  Defendants had the initial burden of producing studies to substantiate the claims, and then plaintiffs would have to show that the studies were unreliable, inaccurate, or incomplete.  The plaintiffs agreed to this case management plan, but then sought discovery on additional issues.  The district court denied most of those request and granted summary judgment to defendants.

Defendants submitted several studies, including a peer-reviewed study which applied Bayer’s product on dogs, and tested dog hair and skin samples for distribution of the product’s active ingredient and a doctoral dissertation that topically applied Merial’s product on dogs, and tested dog hair samples for distribution of the product’s active ingredient.  Plaintiffs submitted their own studies.  The district court concluded that defendants had a good faith basis for their claims; the parties failed to reach settlement and defendants weren’t interested in commissioning a neutral study as the district court suggested.  The district court then allowed discovery into consumer complaints, on the theory that evidence that the companies had received a large volume of consumer complaints would call into question Bayer and Merial’s good faith reliance on their studies.  After that came the summary judgment ruling. 

The court of appeals first affirmed reliance on the case management plan, which treated the case as having only one dispositive issue, and its associated discovery limits, to which the plaintiffs agreed. “[A]lthough they gave up discovery and some of the claims in the case, they got something in return. They no longer shouldered the initial burden of disproving the defendants’ advertisements; the defendants instead shouldered the initial burden of substantiating them.”

Then the court of appeals agreed that defendants met their burden, and plaintiffs didn’t successfully refute their studies.  Plaintiffs argued that their studies showed the presence of the products in animals’ bloodstreams, “which when considered in isolation might suggest that the products spread internally rather than by translocation.”  But the study also detected active ingredients in the pets’ hair twenty-four hours after application. Plaintiffs’ study asserted that its protocol was superior to the protocol used in Bayer and Merial’s studies, but it did not attack the basis of Bayer and Merial’s studies.  At best, this was a conflict, but that didn’t meet plaintiffs’ burden of showing that defendants couldn’t rely on their own studies in their advertising.  More than mere assertion that defendants’ studies weren’t as good was required.  “By requiring the plaintiffs to submit studies that demonstrated why Bayer and Merial’s studies did not provide a good faith basis for their claims, the district court was able to avoid a ‘battle of the experts’ and the attendant costs, which was another objective of the case management plan.”

Plaintiffs argued that the truth of the claims was at issue, but “if veracity was the central issue in the case, one would expect the plaintiffs to bear the initial burden of showing that Bayer and Merial’s claims are false.” Instead, the central issue was whether the plaintiffs could cast doubt on Bayer and Merial’s good faith basis for their advertising claims through expert studies.  “The plaintiffs’ studies did not attack the basis of Bayer and Merial’s studies; they merely asserted an opposing conclusion.”   

Comment: I would think that expert analysis of the defendants’ studies, not (or not just) conflicting studies would be required; otherwise there is, as the court of appeals says, just a disagreement, not an explanation of which is better.  The court's discussion of the plaintiffs' burden suggests that this is true, even though some of its language could be read as requiring plaintiffs to submit studies of their own.  Since plaintiffs failed to show that Bayer and Merial’s studies were unreliable, inaccurate, or incomplete, summary judgment was appropriate.

The court of appeals also rejected the plaintiffs’ argument that the defendants’ studies were never subjected to Daubert analysis because this argument was raised for the first time on appeal.