Thursday, June 15, 2017

Failure to plead with particularity dooms supplement false advertising claim

Nutrition Distribution, LLC v. New Health Ventures, LLC, 2017 WL 2547307, No. 16-cv-02338 (S.D. Cal. Jun. 13, 2017)

Nutrition Distribution sued New Health for false advertising of supplement products containing various “Selective Androgen Receptor Modulators (“SARMS”)” such as “Ostarine.” After New Health moved to dismiss, Nutrition Distribution filed a proposed amended complaint for false advertising (and RICO violations, of which no more will be said), based on New Health’s sale of products containing Dimethazine (“DMZ”).  Applying Rule 9(b), the court denied leave to amend on grounds of futility and dismissed the complaint.

The court first found that the proposed complaint wasn’t futile as barred by the primary jurisdiction doctrine.  The basic claim was that New Health’s failure to disclose DMZ’s health effects was misleading.  This claim doesn’t depend on whether DMZ is “safe” or not.  Instead, it is about misleading consumers through lack of disclosure; determining misleadingness doesn’t require the FDA’s technical and policy expertise (as Pom Wonderful indicated).

Nutrition Distribution also sufficiently pled that DMZ was a controlled substance because it is derived from, and structurally similar to, Methastorone—a chemical already deemed to be an anabolic steroid under federal law.  However, New Health’s alleged failure to disclose that DMZ is banned by anti-doping organizations was legally insufficient because it wasn’t an actionable omission. Under the Lanham Act, omissions are only actionable if they render affirmative statements false or misleading, and Nutrition Distribution didn’t identify any such statements, only claims that New Health’s product was “hands down the strongest anabolic Pre-Workout on the market today!” and “an extremely potent, high-intensity, high-stimulant and highly anabolic pre-workout concoction.”

Likewise, pleading that New Health  “purposely made false and misleading descriptions of fact concerning the nature, characteristics and qualities of its DMZ products by ... failing to disclose their status as controlled substances and failing to disclose the overwhelming clinical evidence that such products pose extreme health risks” was insufficient to plead a misleading advertisement with particularity.  The same was true with the initial complaint.

No comments:

Post a Comment