industry group's safety/risk/legality claims were plausibly false or misleading

Pharmacychecker.Com, LLC v. National Ass’n of Boards of Pharmacy, 2021 WL 1199363, -- F. Supp. 3d --, No. 19-CV-7577 (KMK) (S.D.N.Y. Mar. 30, 2021)

Plaintiff “offers an accreditation program for pharmacies and provides drug price comparison information.” Unlike its competitors, it does this for pharmacies worldwide and US online pharmacies. It does not itself sell or import prescription drugs, but personal imports may sometimes be permitted. It  alleged that defendants unlawfully conspired to restrain trade in violation of the Sherman Act and that NABP engaged in false advertising in violation of the Lanham Act.

NABP is an association of state boards of pharmacy and competes with plaintiff in the pharmacy accreditation market through its Verified Internet Pharmacy Practice Sites (VIPPS) program, its “.pharmacy” Verified Websites program, and its Internet Drug Outlet Identification Program. The other defendants allegedly competed in various ways and coordinated to shut plaintiff out of the market, including by getting Bing to show users “a red caution shield and a warning box when clicking on search results for pages from Plaintiff’s website and blog, causing Plaintiff to lose 76% of its web traffic from Bing.” I will not address the antitrust claims.

Lanham Act claims against NABP:  “NABP’s website claims that sites on its Not Recommended List are unsafe and illegal, including Plaintiff’s website and blog.” This is allegedly false or misleading.

Safety and risk statements: NABP says (1) that its Not Recommended Sites list “includes websites that ‘are known to be unsafe’ or that ‘may: Dispense prescription medicine without a prescription; Dispense foreign or unapproved medicine; or Refer/link patients to sites that facilitate the dispensing of prescription medications in violation of state or federal law or NABP standards.’ ” (2) “[o]rdering drugs from these websites put you and your family at risk.” (3) “[t]he following sites are all known to be unsafe.” (4) “[u]sing websites on the NRL to purchase drugs may put you or your loved ones at risk.”

Though courts are divided on whether safety/risk statements are opinion, “serious” safety concerns may be more than opinion if they are “expressing an objective risk of serious consequences that fairly implies a basis for that statement.” So here: these statements “appear to have a factual basis” by saying, e.g., that the sites on the NRL are “known to be unsafe.” Plaintiff also plausibly alleged misleadingness.

Illegality: The relevant statements were (1) “ ‘[a]void [t]hese [w]ebsites’ [on the Not Recommended Sites list] because they ‘appear to be out of compliance with state and federal laws or NABP patient safety and pharmacy practice standards.’ ” (2) “websites on the list ... are ‘acting illegally or do not follow best practices.’ ” “Since both statements are disjunctive, if one element of each statement is true, they cannot be literally false.” However, plaintiff didn’t allege that the statements were literally false as to best practices for one of its sites (PharmacyChecker.com). But it did plausibly allege that “NABP’s statements about PharmacyCheckerBlog.com are literally false, because it is a policy advocacy blog that does not even arguably meet any criteria that NABP lists on the Not Recommended Sites list.” Conflating plaintiff with illegal sites was plausibly misleading, especially as NABP allegedly earlier said of plaintiff: “clearly they serve a purpose, and they help consumers, and we serve a different purpose, or maybe just slightly different.” This inconsistency justified a plausible inference of deliberate deception. Indeed, it was plausible that this was egregious conduct, since “the record does not suggest that such deception is common in the industry.”

Was this sufficiently alleged to be commercial speech? Yes. First, NABP’s statements were plausibly ads, in that they included “Buy safely” with a link to a list of NABP affiliates. Second, they therefore referred to specific products. Third, plaintiff alleged that competition with it in the market for pharmacy accreditation provided an economic motivation for NABP’s speech. Plaintiff was not required to allege that NABP’s speech led to a specific transaction.