challenging defendant's clinical proof claim is falsity, not lack of substantiation

Woodard v. Labrada, 2021 WL 4499184, No. EDCV 16-189 JGB (SPx) (C.D. Cal. Aug. 31, 2021)

Woodard brought the usual California claims and some others, including NY claims, against Labrada for its weight loss products. Some tidbits:

Labrada argues that Woodard was bringing a prohibited “lack of substantiation” claim. “In the false advertising context, a claim lacks substantiation when it is premised on the absence of evidence or inconclusive evidence; a claim is provably false when evidence contradicts or conflicts with the claim.” This was the latter.

Each Labrada label claim had asterisks leading to “references” purporting to establish the validity of each claim.

When a defendant “puts the clinical proof for its product at issue,” and the clinical proof does not support the claims about the product, the claims are best characterized as false rather than unsubstantiated. In other words, a defendant’s scientifically unsupported representation is false if the defendant asserts it is supported by scientific proof.

That was the situation here for Labrada’s claims: “increases fat burning,” “curb[s] appetite and food intake,” “reduce[s] body weight,” “helps support significant fat loss,” and serves as a “fat loss aid.” Yet one of the studies cited by the label has been disproven and retracted. Plaintiff’s expert further opined that many of the referenced studies were methodologically flawed and didn’t produce results consistent with the claims on the labels. One label recommended a smaller dosage than the dosage utilized in the referenced studies. He concluded that “any statements that the specific papers cited on the product labels support the efficacy statements made are, in my opinion, false and misleading.” This created a triable issue on falsity.

In addition, plaintiff’s expert identified studies “that could lead a reasonable trier of fact to find that the weight loss claims on the labels are false,” such as a study that concluded that one ingredient “failed to produce significant weight loss and fat mass loss beyond that observed with [a] placebo.” Another recent study similarly concluded that “the current evidence is insufficient to recommend green coffee as an adjuvant within weight management therapy.” Although other studies had conclusions that arguably supported the ingredients’ efficacy for weight loss, plaintiff’s expert distinguished those studies throughout his report for failing to include placebo groups, utilizing small sample sizes, and suffering from other methodological issues that biased the results. Anyway, the conflict meant there was a triable issue of falsity.

Labrada argued that the plaintiffs needed scientific studies that its product specifically, and not the purported active ingredient, lacked efficacy to show falsity. That’s a no. Defendants admitted that the sole active ingredient was a proprietary version of the tested green coffee ingredients. Scientific studies demonstrating their lack of efficacy were therefore sufficient to create a triable issue.

What about individual defendant Mr. Labrada? In California, “[d]irectors or officers of a corporation do not incur personal liability for torts of the corporation merely by reason of their official position, unless they participate in the wrong or authorize or direct that it be done.” Plaintiffs failed to raise a triable issue as to Mr. Labrada’s personal liability for the company’s alleged tortious conduct. Though there was evidence of Mr. Labrada’s personal participation in the marketing, sale, and advertisement of the Labrada Products, there was no evidence that Woodard suffered personal harm or property damage as a result of the allegedly false label claims, as required by California law.

However, as to Mr. Labrada’s personal liability for Woodard’s false advertising claims under the FAL, CLRA, and UCL, summary judgment wasn’t warranted. Personal liability could apply “based on [a defendant’s] personal participation in the unlawful practices and unbridled control over the practices[.]” Plaintiffs showed a triable issue of prarticipation and control. The company’s COO testified that Mr. Labrada was “responsible for the marketing and advertising”; he changed promotional language on both product labels and was one of several people responsible for the inclusion of the referenced studies on the labels. Mr. Labrada confirmed that he “oversaw the marketing and advertising” at the company and had final review of advertising materials. This was sufficient, though a joint venture theory of liability failed because an employee isn’t in a joint venture with the employer.