Wednesday, July 13, 2016

Primary jurisdiction doesn't defeat supplement false advertising claim

Nutrition Distribution LLC v. Custom Nutraceuticals LLC, No. CV-16-00173, 2016 WL 3654277 (D. Ariz. Jul. 8, 2016)

The parties compete in the nutritional supplement market; defendant Custom sells Ostarine, a selective androgen receptor modulator (“SARM”) with effects similar to those of anabolic steroids.

Lanham Act claim: Distribution alleged that Custom labeled Ostarine products as “not for human consumption,” while simultaneously representing that Ostarine was a body-building drug and an “[e]asy to dose oral SARM.” Also, Custom allegedly failed to disclose that the World Anti-Doping Agency and the U.S. Anti-Doping Agency have banned the use of SARMs, while targeting competitive athletes.  Moreover, Custom allegedly represented that Ostarine has few side effects, when medical evidence suggests that it has potentially serious side effects.

Custom argued that the court should abstain from deciding these issues based on the primary jurisdiction doctrine. The court disagreed.  “The Court need not consult the FDA to determine whether it is false and misleading to label a product as ‘not for human consumption’ while touting the benefits of such consumption.”  Likewise, the materiality of the omission of the anti-doping agencies’ bans might not even implicate the FDA’s regulatory scheme; the FDCA doesn’t even prohibit all omissions that might be material to a consumer, but only those that are material “with respect to consequences which may result from the use of the article”:

Even assuming the FDA could require Defendants to disclose that their product has been banned by major sports agencies, the issue is not one that implicates the agency’s technical and policy expertise. Indeed, Plaintiff may have a superior understanding of how consumers of body building products would react to this information.

Not even the statements about side effects were beyond the court’s scope.  Though the FDA has primary jurisdiction to regulate statements about the side effects of drugs, Custom denied that Ostarine was a drug. “Having denied the FDA’s authority to regulate Ostarine as a drug, Defendants cannot invoke the same authority to avoid a suit under the Lanham Act.”  Though the FDA has the authority to determine whether Ostarine is safe enough to be sold in interstate commerce, this case was about whether Ostarine was as safe as Custom claimed, which didn’t require the court to opine on the technical and policy questions committed to the FDA.

RICO: no.

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