competitor's allegations that no studies it knows support a claim suffice to allege falsity of "clinically studied"

Vital Proteins LLC v.  Ancient Brands, LLC, 2023 WL 157956, No. 22 C 02265 (N.D. Ill. Jan. 11, 2023)

The parties compete in the market for collagen peptides supplements. Vital alleged that Ancient made false and/or misleading statements on its product labels and advertising materials relating to the speed of action of several of its products and the ingredient composition of one of its products. The court rejected a motion to dismiss.

At this point, injury was sufficiently alleged by allegations that Ancient’s “false and misleading claims have a tendency to deceive and/or have deceived the relevant purchasing public” and “will cause or have caused harm to Vital[’s] business, reputation, goodwill, sales, and profits,” because they (a) lead retailers to provide Ancient with favorable placement on shelves and (b) induce consumers to pick Ancient’s products over Vital’s because they will consider Ancient’s products superior to Vital’s.

Ancient didn’t dispute that the parties directly competed. But it argued that causation was insufficiently pled because, if consumers were seeking Ancient’s putative benefits within 24 hours, they wouldn’t have bought Vital’s product in the absence of that claim by Ancient, because Vital doesn’t promise benefits within 24 hours. Such a standard would be “unnecessarily narrow. Rather, it is reasonable to infer that a consumer looking for the more effective supplement, without exclusive regard to the immediacy of its benefits, may conclude that Ancient’s products are generally superior to Vital’s because Ancient’s packaging and advertising states that its benefits are clinically shown to come as quickly as one day, whereas Vital’s do not, and this would result in lost sales for Vital.”

Vital’s argument that Ancient’s favorable placement in retailers was the result of deception, which prime placement then itself drove sales because consumers associate better shelf placement with a superior product, would likely not have been enough to provide standing under Lexmark. But Vital’s “implied superiority” theory of injury succeeded in conferring standing.

The challenged statements mostly involved speed and efficacy claims: “clinically studied ingredients to deliver results in as little as one day”/ “the only leading collagen protein brand on the market currently with a proprietary fermented collagen ingredient backed by human clinical studies, proven to provide real results as early as day one”; “head-to-toe results in as little as one day”; “Reduced exercise-induced joint discomfort as early as Day 1”; “Reduced collagen degradation with noticeable results in as little as 3 days.”

In addition, Vital alleged that, even if clinical studies provided factual support for these statements, “no studies support the broader host of benefits that are promoted and positioned on the labels and ads next to the one- or three-day results statements,” thus misleading consumers as to the scope of the studies. For example, one product positioned the “Clinically studies ingredients for results in as little as one day” language directly above the statement, “Supports a healthy immune system.” The “head-to-toe results” statement was also allegedly misleading on this theory.

Vital also challenged the labeling of the amount of collagen in one product as misleading: It had “10g” in large letters, the words “PER SERVING,” in smaller font directly under it, and then “COLLAGEN + PREBIOTIC FIBER,” in the same size as the per serving font. Vital alleged that consumers are likely to be misled into thinking a serving contains ten grams of collagen only.

images taken from online sellers; they seem to match the allegations

Explicit falsity: Vital alleged, essentially, “Vital isn’t aware of any clinical or peer-reviewed studies supporting Ancient’s claims, upon information and belief Ancient doesn’t have any, and the one study on which Ancient is likely relying to support the truth of its claims does not actually provide that support.” This sufficed to plead falsity at this stage. “[L]ittle more could be expected of a plaintiff in Vital’s position. What else could a competitor of a business making such statements about clinical studies supporting quick health benefits be able to plead with regard to their falsity?” Moreover, “it can be reasonably inferred from the complaint that Vital, as a longtime participant in the collagen peptides market, is more likely to be aware of such clinical studies—if they do indeed exist—than the average person or entity.”

Did the study referred to in the complaint actually show a decrease in joint pain or stiffness within a single day? “If that were the case—i.e., Ancient’s statements are substantiated—Vital would have essentially pleaded itself out of court on its explicit falsity claims.” While some excerpts indicated some joint pain and stiffness relief within one day, the study explicitly states those results were not statistically significant. The court agreed that this was insufficient to show truth: “If the relevant … results are not statistically significant, then the results don’t ‘show’ anything; there is no statistical basis to attribute those results to anything but randomness.”

What about “10g per serving”? It was plausible that the labeling was likely to mislead consumers into believing that they will receive a 10g serving of collagen. It was not “fanciful” or unreasonable “to read Ancient’s label as indicating that it provides 10 grams per serving of collagen and 10 grams per serving of probiotic fiber rather than 10 grams of a mixture containing an unknown quantity (except that the quantity is something less than 10 grams) of each of the two ingredients referenced.” The court noted that use of a “plus” sign rather than the word “and” only exacerbated the ambiguity. Although Ancient’s reasoning was not unreasonable, it was also not unreasonable to understand this label text “to trumpet a specific quantity (10 grams) of collagen—the product’s feature ingredient—rather than reading it in a manner that allows consumers to infer that it might contain very little collagen per serving.”