Why do competitors get to challenge claims that consumers don’t?

I have a political economy explanation for this, but I don’t think that’s good enough.  Challenging a “tests prove” claim—explicit or implicit—in Lanham Act cases means showing that the tests don’t prove the proposition for which they are cited.  This is a standard path to explicit falsity, requiring no further evidence of deceptiveness.  But consumer protection cases often seem to ignore the point made by Lanham Act courts: when the defendant’s claim is “tests prove X,” showing that “tests don’t prove X” has falsified the defendant’s factual claim—and one very likely to be material, even if X might still be true for some other reason.  Defendants have proved more successful calling this a mere lack of substantiation claim when consumers are the plaintiffs.  That should not be the case.

Kwan v. SanMedica International, LLC, No. 14-cv-03287, 2014 WL 5494681 (N.D. Cal. Oct. 30, 2014) (magistrate judge)

Kwan sued SanMedica for its marketing of SeroVital, an over-the-counter supplement marketed to boost human growth hormone (“HGH”). Kwan identified these claims: (1) that SeroVital provides a 682% mean increase in HGH levels; (2) that SeroVital is clinically tested; and (3) that “peak growth hormone levels” are associated with “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution.”  She alleged that she relied on them to buy,  and that they violated the UCL/CLRA because in fact the clinical evidence didn’t support SanMedica’s claims.

Lack of substantiation isn’t a sufficient basis for a private claim under the UCL/CLRA (nor, I should note, is it under the Lanham Act, with the exception announced in the Mylanta Night Time Strength case in the 3d Circuit).  A claim is false if it has “actually been disproved,” “that is, if the plaintiff can point to evidence that directly conflicts with the claim.”  Merely lacking evidentiary support just makes it unsubstantiated.

Kwan alleged that (1) the only study supporting SanMedica’s representations did not test for “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution,” and (2) that study is so deeply flawed that it cannot serve as a reliable basis for SanMedica’s representations.

For the first claim, the ad didn’t claim that the clinical testing showed effects on “youthful skin integrity, lean musculature, elevated energy production, [and] adipose tissue distribution,” but merely said that peak growth hormone levels are associated with those benefits. So the fact that the study relied on in the ad didn’t test for those benefits was irrelevant.  (To misleadingness?)  For the second, that was just a lack of substantiation claim.  Other cases allowing similar claims to proceed involved affirmative evidence of falsity. 

Did this complaint allege any evidence that SanMedica’s claims were false?  Kwan alleged that the FTC had stated that no reliable evidence supported claims that non-prescription products have the same effect as prescription HGH; that the New England Journal of Medicine warned about the potential for misleading consumers; and that the FDA has stated that “it is unaware of any reliable evidence to support anti-aging claims for over-the-counter pills and sprays that supposedly contain HGH.” But none of that alleged falsity, especially since none of the authorities cited actually referred to SanMedica’s product.  (Why is that important if no such product will work?)  Also, most of the statements were old, from 11-20 years, and the court couldn’t tell whether they were made before SanMedica’s product came on the market, in which case they couldn’t refer to it.  (So if I make a new brand of milk, statements about the effects of dairy from before I enter the market can’t apply to me?)

However, Kwan could amend the complaint if she could in good faith allege facts affirmatively disproving SanMedica’s claims.  For example: she could alleged that someone actually studied or tested SanMedica’s formula and found that it didn’t produce a 682% mean increase in HGH levels, or that she herself did not experience such an increase when using the product, or that a study exists somewhere demonstrating that a 682% increase is categorically impossible to achieve in an over-the-counter pill.