republishing scientific study to prospective customers isn't protected opinion

Advance Dx, Inc. v. YourBio Health, Inc., --- F.Supp.3d ----, 2024 WL 4393314, No. 24-10595-WGY (D. Mass. Oct. 3, 2024)

Advance sued YourBio, which competes in the market for at-home medical device testing patients’ level of anti-Mullerian hormone, for false advertising, tortious interference, defamation/disparagement, unjust enrichment, and unfair trade practices under Massachusetts statutory law.

Advance makes a card used to collect a blood sample obtained from a patient’s lanced fingertip, while YourBio manufactures a device that is used to collect a blood sample by attaching to the back of a patient’s arm and piercing capillaries close to the skin’s surface with microneedles. In 2022, BioMed studied the parties’ products and conventional venipuncture. “After processing the data, BioMed imposed an internal control, calculated based on the Study’s data, to normalize Advance’s results to the venipuncture instead of using the recommended internal control provided in Advance’s guidelines.” It then published the study, concluding that YourBio’s testing device was more accurate, superior, and has stronger consumer preference than Advance’s. YourBio used PR Newswire to tout its superiority and also repeatedly promoted the study “to consumers, industry professionals, and third parties at trade shows and in YourBio’s marketing materials.” However, after it learned about the use of the simulated control, the testing lab “stated that any discordance noted in the Study may be due to BioMed’s failure to follow Advance’s instructions for the Card, and not due to any fault of the Card.”

YourBio argued that the study was a non-actionable scientific conclusion and statement of opinion and therefore could not be falsified. The court disagreed. Even under the rule of ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir. 2013), “we must take into account the statement’s context, including the medium in which the statement was published and the audience to which it was presented.” The medium here was republication by YourBio specifically to promote its devices. “Unlike a typical scientific journal, the medium in this case is not meant to communicate insights into matters of scientific debate, despite the fact that the Study may have been first published by BioMed for exclusively scientific reasons.” The audience was also not “purely scientific,” but rather targeted at customers/potential customers.

The court also found that Advance was not a public figure, so defamation required only negligence, although it did plead that YourBio was aware of the falsity. And damage could be presumed without evidence of economic loss because the statements were of the kind that would harm Advance’s business.

The same basic logic allowed the Lanham Act false advertising claims to proceed. (Advance didn’t say a lot about “interstate commerce,” but alleging that the false statements were published online sufficed.) Unfair trade practices under Chapter 93A MGL are treated the same way as Lanham Act false advertising claims, so they also survived.

Tortious interference and commercial/product disparagement claims likewise survived. Under Massachusetts law, “[p]roduct disparagement is similar to defamation but lacks a reputational harm element and makes greater demands as to the ‘falsity of the statement[s], fault of the defendant and proof of damage.’ ”  That didn’t make a difference here.

Unjust enrichment claims failed, however, because Advance didn’t plead it had the right to some benefit/money that YourBio received.

9th Circuit refuses to kick out claim over benzene in sunscreen on standing

Bowen v. Energizer Holdings, Inc., --- F.4th ----, 2024 WL 4352496, No. 23-55116 (9th Cir. Oct. 1, 2024)

Bowen sued Energizer for false advertising, alleging that its Banana Boat sunscreen was adulterated with dangerous levels of benzene, a carcinogen that scientists have determined can cause cancer.

Energizer moved to dismiss under Rule 12(b)(1), arguing that there was no Article III standing because Bowen’s allegations that small amounts of benzene in sunscreen are unsafe were false. The district court held that “[i]n light of the [FDA] guideline permitting 2 [parts per million] of benzene in sunscreen, [Bowen] does not allege facts that tend to show a non-speculative increased health risk or actual economic harm” arising from her purchase of Banana Boat products. This was a premature resolution of the merits issue. “Although a district court faced with a factual challenge to its exercise of jurisdiction may resolve disputed facts as to purely jurisdictional questions, it may not do so when those jurisdictional questions are intertwined with the merits of a claim. When the jurisdictional and merits issues are inseparable, the court must treat a factual attack on jurisdiction as a motion for summary judgment and construe disputed issues of fact in favor of the nonmoving party. Applying that standard here, Bowen has adequately established an injury in fact for purposes of Article III.” Remanded.

Bowen had one bottle of the sunscreen tested at a lab, revealing that it contained 0.29 parts per million (“ppm”) of benzene. A non-party pharmacy also allegedly tested various Banana Boat products and found that they too contained benzene, including a bottle with more than 0.1 ppm of benzene.

Bowen alleged that “[b]enzene is a carcinogen that can cause cancer in humans,” and that “the application of sunscreen specifically increases the absorption rate of benzene through the skin.” A Yale researcher, clinician, and professor of dermatology allegedly opined that “[t]here is not a safe level of benzene that can exist in sunscreen products,” given the large surface area of the human body and the amount of sunscreen needed to properly cover it. This contamination allegedly has led to public concern and voluntary recalls of Banana Boat products.  

Looking to documents produced or relied on by the FDA, the district court determined that they “impl[y] that manufacturers like Defendants may continue to release products that are adequately tested and contain less than 2 ppm of benzene.” It further held that Bowen’s “alleged economic harm”—i.e., that she paid more than she would have had she known that Banana Boat contained benzene—“is premised on the speculative notion that the presence of 0.29 ppm of benzene, or any potential presence of benzene, makes the sunscreen unsafe.”

Bowen’s allegations relating to standing weren’t “separable from the merits of the case,” but rather “intertwined with an element of the merits of the plaintiff’s claim,” such that the district court was required to “leave the resolution of material factual disputes to the trier of fact.”

When plaintiffs in a false advertising case “ ‘contend that [they] paid more for [a product] than they otherwise would have paid, or bought it when they otherwise would not have done so’ [because of a false claim or misleading omission] they have suffered an Article III injury in fact.” Whether the statements they relied on were materially false was also a merits issue. These allegations weren’t separable from the merits.

The district court thus “mistakenly required Bowen to show that Banana Boat was noncompliant with FDA guidelines in order to establish injury under an economic-harm theory.” Her alleged overpayment was the harm, not the safety/risk profile. In addition, to find 0.29 ppm benzene “safe” was to improperly weigh disputed evidence. The court of appeals pointed out that, even without considering Bowen’s countervailing evidence, the FDA hardly blessed the presence of benzene at any level in the relevant documents. Its guidance was that benzene “should not be employed in the manufacture of ... drug products because of their unacceptable toxicity or their deleterious environmental effect. However, if their use is unavoidable in order to produce a drug product with a significant therapeutic advance, then their levels should be restricted” to 2 ppm, “unless otherwise justified.” That “caveat-laden” guidance was hardly a safety endorsement. “Faced with two sunscreens in the skincare aisle of a pharmacy—one with benzene, the other with no benzene—it is perfectly reasonable that the consumer would avoid the product containing benzene, as Bowen alleges that she would have absent Defendants’ alleged false advertising.”