false advertising claim needs to talk about asterisks to plead with particularity

Anthony v. Pharmavite, 2019 WL 109446, No. 18-cv-02636-EMC (N.D. Cal. Jan. 4, 2019)

Despite generally favorable substantive rulings for plaintiffs, the court dismisses the complaint for false advertising of a nutrition supplement for failure to plead with particularity under Rule 9(b), specifically for failing to discuss the asterisks on the claims at issue.

Pharmavite represents that its biotin supplements “may help support healthy hair, skin and nails.” Each health benefit representation on a label includes either an asterisk and obelisk (*†) or two obelisks (†‡), which I will shorthand as asterisks. The relevant references are to a disclaimer on the back of a label that says: “Biotin may help support healthy hair, skin, and nails in those that are biotin deficient”  or “May help support healthy hair, skin and nails in those deficient in biotin.”  This is allegedly misleading because “most people obtain more than enough biotin from their daily diets, so biotin supplements are unneeded, superfluous, and will provide no health benefits. Only a minuscule percentage of individuals with biotin deficiencies could potentially benefit from biotin supplements.” Allegedly, “[o]nce there is sufficient biotin in the body, any additional supplements are superfluous and the body ultimately excretes them.” The only benefits would come to people with  “exceedingly rare conditions that cause ... biotin deficiencies—less than [0.00138] percent of the population.”

Whether a reasonable consumer would be misled by the labeling could not be resolved as a matter of law, given the prominence of the claim to “help support healthy hair, skin and nails.” “A reasonable consumer, representing a significant portion of the population, could understand this representation to mean that there is a possibility that he/she will experience benefits to his/her hair, skin, and nails from using the Biotin Products.”  [It is extremely unlikely that “may” moderates this much if at all.]  As alleged, the vast majority of the population can’t benefit, so “for virtually all consumers, the term ‘may’ overstates the chances of obtaining any benefit.” Qualifying words like “may” may be relevant to the reasonable consumer’s understanding [cases cited, but not consumer research—plaintiffs might be well advised to plead that “may” doesn’t matter!] but that could still be misleading. “A reasonable consumer could understand ‘may’ to mean a reasonable possibility or a reasonable probability, rather than merely a vanishingly small possibility on the order of 0.00138 percent.” 

As for the deficiency disclaimers, there was a question of fact about whether a reasonable consumer would notice it and continue on to the disclaimer. The Ninth Circuit has rejected the premise that “reasonable consumers should be expected to look beyond misleading representations on the front of the box to discover the truth from the ... small print on the side of the box.”  There was a separate question about whether the substance of the disclaimer was any use. “For instance, the disclaimer does not state that the Biotin Products would not benefit those who are not biotin deficient. Nor does it explain that exceedingly few people are in fact biotin deficient. A reasonable consumer, experiencing hair, skin or nail problems, might plausibly believe he or she has a biotin deficiency or would otherwise benefit from the product.” [Cf. the old Geritol case, where Geritol advertised that it could alleviate fatigue caused by iron deficiency—much more clearly making the relevant disclosure than here.  This was nonetheless misleading because most fatigue wasn’t caused by iron deficiency, so many consumers were buying a product that wouldn’t help them with the problem for which they sought relief, given that Geritol’s ads targeted the general, fatigued population.] Thus, the disclaimer was not so unambiguous and express that a reasonable consumer couldn’t be deceived as a matter of law.

However, the complaint still flunked 9(b) because it didn’t discuss whether plaintiffs saw the asterisk; whether they read the corresponding disclaimer; and if they did read it, how the disclaimer affected their purchasing decision. It didn’t mention the asterisk or disclaimer at all. Dismissed without prejudice.

The injunctive relief claim was dismissed with prejudice because plaintiffs didn’t allege an imminent or actual threat of future harm absent an injunction. The claim was “predicated on the premise that, as a matter of scientific fact, biotin supplements ‘are unneeded, superfluous, and will not provide any benefits’ to anyone without a biotin deficiency.” Thus, plaintiffs wouldn’t desire to purchase such supplements in the future if truthfully advertised.