Transformativeness doesn't require commentary on original

Cariou v. Prince, No. 11-1197-cv (2d Cir. April 25, 2013)

The court of appeals reversed the grant of summary judgment to photographer Patrick Cariou, and ordered the entry of summary judgment in favor of well-known appropriation artist Richard Prince as to 25 out of 30 works, leaving the district court to analyze 5 for fair use on remand.

Cariou published Yes Rasta, “a book of [20] classical portraits and landscape photographs that he took over the course of six years spent living among Rastafarians in Jamaica.” He testified that the book was “extreme classical photography [and] portraiture,” and that he did not “want that book to look pop culture at all.” The book did not sell out of its initial printing of 7000, and fell out of print; almost 5800 copies were sold, almost 60% at a price below suggested retail of $60.  The publisher paid him just over $8000. Except for a handful of private sales to acquaintances, he never sold or licensed individual photos.

Prince altered and incorporated several of Cariou’s photographs into a series of paintings and collages, called Canal Zone, later exhibited at New York’s Gagosian Gallery. Gagosian sold an exhibition catalog that contained reproductions of Prince’s paintings and images from Prince’s workshop. The district court’s injunction, among other things, ordered the defendants to deliver to Cariou all unsold infringing works so that he could destroy them if he wanted (though on appeal he disavowed any such intention).

The court of appeals concluded that fair use did not require Prince to comment on Cariou, the photos, or aspects of popular culture closely associated with Cariou or the photos.

Prince is a “leading exponent” of the genre of appropriation art, “taking photographs and other images that others have produced and incorporating them into paintings and collages that he then presents, in a different context, as his own.”

In the Canal Zone show, Prince altered Cariou’s photographs “significantly,” “by among other things painting ‘lozenges’ over their subjects’ facial features and using only portions of some of the images.”  You can see all thirty challenged works, along with the Cariou photos incorporated into them, on the court’s website.  The portions of the photos used, and the amount of each Prince work they constituted, varied significantly.  In some, such as James Brown Disco Ball, Prince used headshots from Cariou on top of other appropriated images on top of a painted canvas, almost entirely obscuring Cariou’s work.  Prince’s work was also much larger.

In other works, “Cariou’s original work is readily apparent: Prince did little more than paint blue lozenges over the subject’s eyes and mouth, and paste a picture of a guitar over the subject’s body.” The catalog published by the Gagosian gallery included all the Canal Zone artworks, including some not displayed in the Gagosian show, and also included photos showing Cariou’s photos in Prince’s studio.

Before the Gagosian show, a gallery owner, Cristiane Celle, contacted Cariou and asked if he’d be interested in discussing an exhibit in New York, expressing interest in Cariou’s pictures of surfers.  They met and discussed a possible exhibit, including prints from Yes Rasta, but didn’t select a date, photos, or any other details. At some point during the Canal Zone show, Celle learned that Cariou’s photographs were “in the show with Richard Prince.” She called him, and when he didn’t respond, she mistakenly concluded that he was “doing something with Richard Prince . . . . [Maybe] he’s not pursuing me because he’s doing something better, bigger with this person. . . . [H]e didn’t want to tell the French girl I’m not doing it with you, you know, because we had started a relation and that would have been bad.”  Celle decided not to put on a “Rasta show” because it had been “done already,” but remained interested in exhibiting his surfer prints.

On appeal, the majority concluded that fair use could be resolved for 25 of the paintings on summary judgment.  “[T]he fair use determination is an open-ended and context-sensitive inquiry.” The court quoted Judge Leval’s influential article stating that “if [the original work] is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings – this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society.”  

The district court mistakenly required Prince’s use to “comment on, relate to the historical context of, or critically refer back to the original works.”  Certainly this is true for many types of fair use, such as satire and parody.  However, there was no requirement of commentary on the original or its author for transformativeness, and a work may be a fair use even if it serves a purpose other than “criticism, comment, news reporting, teaching, scholarship, and research” as identified in the statutory preamble.  Instead, what is required is alteration of the original with new expression, meaning, or message.

The majority’s “observation of Prince’s artworks themselves” convinced it of the transformative nature of 25 of them.  They “manifest[ed] an entirely different aesthetic from Cariou’s photographs.”  Cariou offered “serene and deliberately composed portraits and landscape photographs depict[ing] the natural beauty of Rastafarians and their surrounding environs,” while Prince’s “crude and jarring works” were “hectic and provocative.”  While Cariou’s black and white photos were printed in a standard-sized photo book, Prince created “collages on canvas that incorporate color, feature distorted human and other forms and settings, and measure between ten and nearly a hundred times the size of the photographs.”  Overall, the “composition, presentation, scale, color palette, and media are fundamentally different and new compared to the photographs, as is the expressive nature of Prince’s work.”

Moreover, Prince’s deposition testimony demonstrated his “drastically different approach and aesthetic.” He testified that he “[doesn’t] have any really interest in what [another artist’s] original intent is because . . . what I do is I completely try to change it into something that’s completely different. . . . I’m trying to make a kind of fantastic, absolutely hip, up to date, contemporary take on the music scene.”  His artworks related to a planned “post-apocalyptic screenplay” emphasizing themes of sexual equality, highlighting “the three relationships in the world, which are men and women, men and men, and women and women,” and portraying “a contemporary take on the music scene.”  

The district court focused on Prince’s testimony that he “do[es]n’t really have a message,” that he was not “trying to create anything with a new meaning or a new message,” and that he “do[es]n’t have any . . . interest in [Cariou’s] original intent.”  But that didn’t prevent the court from considering how Prince’s works may reasonably be perceived, which is the appropriate measure.  (I have argued as much!)  Prince didn’t need to claim his works were satire or parody.  “[W]e do not analyze satire or parody differently from any other transformative use.”

While it’s not surprising when an alleged infringer goes to great lengths to explain and defend his use, the fact that Prince didn’t do so here wasn’t dispositive.  “What is critical is how the work in question appears to the reasonable observer, not simply what an artist might say about a particular piece or body of work. Prince’s work could be transformative even without commenting on Cariou’s work or on culture, and even without Prince’s stated intention to do so.”  Thus, the focus was primarily on the artworks themselves.  The court saw 25 of them as transformative as a matter of law, requiring no further factfinding.  (Citing Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687 (7th Cir. 2012), which affirmed a finding of fair use on a motion to dismiss given the clarity of the transformation, there a parody.)

Not all cosmetic changes to photos are fair use.  As previously held, a derivative work that presents the same material in a new form, such as a book of synopses of TV shows, isn’t transformative.  (Is it adaptive?)  But 25 of the images had a “fundamentally different aesthetic.”  That being so, it didn’t much matter that they were unquestionably commercial (ed. note: copyright has a funky definition of commercial speech). 

Turning next to the effect on the market, it further demonstrated the significant differences between the works. The district court relied on Celle’s decision not to host a Yes Rasta show once she learned of the Canal Zone show and held that Prince damaged actual and potential markets for Cariou’s original work and for derivative work licenses.  But factor four doesn’t “focus principally on the question of damage to Cariou’s derivative market.” The concern is not suppression or destruction of the market for the original or derivatives, but rather usurpation of the market. Moreover, the market for derivative uses includes only those that creators of original works in general would develop/license.  This can occur when an infringer’s target audience and the nature of the infringing content is the same as the original, as with a book of Seinfeld trivia.  But the more transformative the use, the less likelihood of market substitution.

So here.  Celle didn’t decide against a Yes Rasta show because it had already been done, but because she mistakenly believed that Cariou had collaborated with Prince at the Gagosian show.  Prince didn’t usurp the market for the photos.  His audience was very different from Cariou’s, and there was no evidence that Prince’s work usurped either primary or derivative markets for Prince’s works.  Nothing in the record suggested that Cariou would license secondary uses “in the vein of” Prince’s work.  Nor did the record suggest that Prince’s works had any impact on the marketing of the photos. Cariou didn’t aggressively market his work anyway, and Prince’s work “appeals to an entirely different sort of collector”—the wealthy and the famous.  Prince sold works for millions of dollars, while Cariou didn’t, and nothing in the record suggested that anyone would avoid Cariou’s work “as a result of the market space that Prince’s work has taken up.”  Thus, the effect on the market weighed in Prince’s favor.

Given transformativeness, the creativity of Cariou’s work wasn’t important. However, the proportion of the original used (factor three), differed across works.  Some of Prince’s works used the Cariou photos “in whole or substantial part,” and in some works such as Charlie Company Prince didn’t alter the source photo very much.  In others, such as Djuana Barnes, Natalie Barney, Renee Vivien and Romaine Brooks take over the Guanahani, the entire photo was used but also “heavily obscured and altered” so that it was “barely recognizable.”  Copying the entire work doesn’t always weigh against fair use; the extent of permissible copying varies with the purpose and character of the use.

 

Charlie Company and original Cariou photo:

 

 

Djuana Barnes and Cariou photo:

 

The district court determined that Prince took substantially more than necessary.  “We are not clear as to how the district court could arrive at such a conclusion.”  (We’d first have to know what was necessary in art.)  Anyway, the law doesn’t require a secondary artist to take “no more than is necessary.”  The secondary use can conjure up at least enough of the original to fulfill its transformative purpose; use of key portions of Cariou’s photos was, in 25 instances, okay because Prince transformed them into something new and different, making factor three weigh heavily in Prince’s favor.

However, five works—Graduation, Meditation, Canal Zone (2008), Canal Zone (2007), and Charlie Company—weren’t sufficiently different from the photos for the court to be confident that they were transformative as a matter of law.  “Although the minimal alterations that Prince made in those instances moved the work in a different direction from Cariou’s classical portraiture and landscape photos, we can not say with certainty at this point whether those artworks present a “‘new expression, meaning, or message.’” True, there were “key differences” in things like tint and focus, as well as the lozenges over subjects’ eyes and mouth that made each “appear anonymous, rather than as the strong individual who appears in the original.”

Graduation and Cariou photo:

In Graduation, the lozenges combined with the enlarged hands and electric guitar to create the impression that the subject wasn’t quite human, compared to Cariou’s “human being in his natural habitat, looking intently ahead.” Cariou presented “someone comfortably at home in nature,” while Graduation “combines divergent elements to create a sense of discomfort.” But the court wasn’t certain enough to rule definitively, and it felt the same way about the other four.  Each was different from, but “still similar in key aesthetic ways,” to Cariou’s photographs.  For example, in Canal Zone (2008), Prince put the subject, with lozenges and guitar, on a collaged background, creating the cumulative effect of “the subject in a habitat replete with lush greenery, not dissimilar from many of Cariou’s Yes Rasta photographs”:

 

Charlie Company prominently displayed four substantially unaltered copies of a Cariou photo, which was aesthetically similar to the photo because it maintained the pastoral background and individual focal point of the original.  “While the lozenges, repetition of the images, and addition of the nude female unarguably change the tenor of the piece, it is unclear whether these alterations amount to a sufficient transformation of the original work of art such that the new work is transformative.” 

The district court was in the best position to make the initial determination of whether the relatively minimal alterations were fair uses, including whether they were transformative.  (What standard is the district court to use?  It sure seems like a new meaning or message may reasonably be perceived.  Aren’t circuit court judges reasonable as a matter of law?)

Judge Wallace (9^th Cir., by designation) concurred in part and dissented in part, arguing that the majority mostly got the law right but should have left all the application thereof to the district court on remand.  Plus, he would have allowed the court to consider Prince’s statements, since the court has relied on creators’ statements before, e.g., Blanch v. Koons and Castle Rock (the Seinfeld case).  Brownmark, the case on which the majority relied, was so clear a case that no further evidence other than a “fleeting glance” at the two works was required.  Judge Wallace didn’t believe that the transformativeness here could so readily be determined.  He wanted evidence other than “our own artistic perceptions of the original and secondary works.”  While he disclaimed expertise in art, he couldn’t see how the majority could “confidently” distinguish between the 25 works it blessed and the 5 it didn’t.  Quoting Campbell quoting Bleistein, “[I]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of [a work], outside of the narrowest and most obvious limits.’”  (It’s not clear to me that sending it back to the district court, also embodied by a person trained to the law, solves this problem!  But he thinks there might be other evidence that might matter—though what?  Surveys?)

no preemption for ordinary falsity claim about FDA-regulated product

Won Kyung Hwang v. Ohso Clean, Inc., 2013 WL 1632697 (N.D. Cal.)

Hwang sued on behalf of consumers who bought CleanWell sanitizing products, alleging California consumer protection claims and violation of the Magnuson Moss Act.  Until relatively recently, Hwang alleged, the labels of defendants’ foaming hand sanitizer, hand sanitizer spray, hand sanitizing wipes, and antibacterial foaming hand soap products prominently and falsely represented that they: (1) “[k]ill[ ] 99.9% of germs naturally,” (2) “kill 99.99% of germs including MRSA, Salmonella, Staph, and E.coli,” (3) “kill 99.9% of the harmful germs that can make you sick,” and (4) “Sanitize hands when you can't wash with soap and water.”

Defendants argued that the claims were preempted under the FDCA.  The governing law is that a state law claim will survive if it doesn’t depend entirely on a violation of the FDCA but rather is premised on conduct that would give rise to liability under traditional common law principles. “Thus, consumer fraud claims based on statements that are alleged to be literally false, as a factual matter, have generally been found to be permissible under the FDCA.”

Pom Wonderful LLC v. CocaCola Company, 679 F.3d 1170 (9th Cir. 2012), didn’t aid defendants’ position.  Pom isn’t really a preemption case but rather a primary jurisdiction case, in which the court of appeals held that, to the extent that the regulations about juice names on labels were unclear, it was for the FDA to fix the problems.  Pom was a Lanham Act case, and preserved the possibility of state law claims on remand.  Where FDA provisions require no original judicial interpretation, application of Pom isn’t appropriate. 

Here, no statutory or regulatory provision expressly preempted the claims, and there was no implied preemption because Hwang’s claims weren’t based on the FDCA but rather on parallel state laws that mirror the relevant FDCA sections.  The only specific regulations cited by defendants were a Tentative Final Monograph, which were never adopted.  The court was merely required to make a factual determination as to whether the challenged statements were false.

As for primary jurisdiction, “where a claim is within the purview of the FDA's regulatory authority and the determination requires the expertise of the FDA, the court should not decide the question before the FDA has had an opportunity to address it.”  Here, the FDA has the authority to regulate the labeling and testing of defendant’s products, but the Tentative Final Monograph proposing specific regulations was never enacted.  Even assuming (not in evidence) that the FDA had plans for further regulations, Pom didn’t require deferring to the FDA when state consumer protection law claims were based on factual falsity, “at least where, as here, there are no regulations suggesting the FDA has adopted a contrary position.”  The FDA’s expertise wasn’t required as to what renders a statement misleading, because incorrect factual statements are by definition false and misleading.  Pom didn’t get rid of the many cases permitting state law and Lanham Act claims based on falsity.

The court rejected challenges to the sufficiency of the pleading: Hwang identified the key statements and alleged that they weren’t true.  Defendants argued that she failed to plead materiality, but that wasn’t a question suitable for a motion to dismiss.  She alleged that she relied on the statements to make her purchase.  “Given that the purpose of Defendants' Sanitizing Products is to kill germs and the statements allegedly overstate the effectiveness of the products in achieving that objective, these allegations are at least plausible and therefore satisfy the pleading standards of Iqbal and Twombly.”  The statements were directed to “what is undisputedly the primary purpose of the products at issue, namely, to kill germs, giving rise to a plausible inference that a reasonable consumer would consider them material.”

Further, the court rejected the argument that the class claims failed to the extent the class includes members who may not have seen the statements or weren’t deceived.  This was the wrong stage at which to address class claims.  The procedural posture also prevented the court from ruling that a nationwide class couldn’t be certified as to Hwang’s California claims under Mazza v. American Honda Motor Co., Inc., 666 F.3d 581 (9th Cir. 2012), which, the court held, didn’t establish a bright-line rule rejecting all nationwide classes under California consumer protection statutes.  Choice of law analysis is more appropriate at the certification stage.

Similarly, the court declined to strike damages claims and class allegations under Rule 12(f), since they weren’t included in the meaning of “any insufficient defense or any redundant, immaterial, impertinent or scandalous matter.”   It also allowed her to amend her CLRA claim to add a damages claim once the required 30-day notice period had passed.

Prince v. Cariou

I haven't had time to go through the full ruling, but given the widespread dissemination of the photos as (necessarily) part of explaining the court's ruling, and now in the US Reports, it has to be noted how much less control Patrick Cariou has over his images, even the unaltered ones, than he did before this began.  Whether this is tragedy or irony is up to you.

Pictures of fruit support misleadingness claim for nutrients not derived from fruit

Bronson v. Johnson & Johnson, Inc., 2013 WL 1629191 (N.D. Cal.)

The plaintiffs sued under California law alleging that Splenda Essentials with Antioxidants, Splenda Essentials with Fiber, and Splenda Essentials with B Vitamins were deceptively advertised. They objected to the name “Essentials”; the label on Splenda with Fiber, which includes the statement “1 gram of fiber in each packet” and “healthy fiber” placed next to a photo of fruit and whole-grain cereal; the label on Splenda with Antioxidants, which includes the statement “20% of the daily value of antioxidant vitamins C and E, like those found in fruits and vegetables” placed near a picture of berries; and the label on Splenda Essentials with B Vitamins, which includes the statement “helps support a healthy metabolism.”  The court partially granted J&J’s motion to dismiss.

Plaintiffs alleged that Splenda Essentials costs 25% more than regular Splenda, and that they paid this extra based on J&J’s misrepresentations.  The versions with antioxidants and B vitamins were discontinued, but that didn’t affect plaintiffs’ claims for damages.

The plaintiffs claimed that they bought the products in reliance on the labels, but didn’t allege that they relied on any website or print marketing, so they didn’t have standing for anything but  claims based on the labels.  Though they aren’t required to plead exposure with an unrealistic degree of specificity under In re Tobacco II, that case dealt with an extensive and longterm ad campaign, whereas the campaign here began in 2012.

Preemption: As for Splenda Essentials with Antioxidants, the statement that the product contains “20% of the daily value of antioxidant vitamins C and E” was an express nutrient content claim. The regulations allow nutrient content claims for antioxidants when: (1) an RDI (recommended daily intake) has been established for each of the nutrients; (2) the nutrients that are the subject of the claim have recognized antioxidant activity; (3) the level of each nutrient is at least 10% of the RDI for vitamins; and (4) the names of each nutrient are included on the label. Any additional requirements would be preempted.  The label here met each requirement. Because the FDA doesn’t require a distinction between synthetically derived antioxidants and those derived from fruit, claims that the label was misleading for failing to do so were preempted.

However, there was no preemption with regard to the statement “like those found in fruits and vegetables” placed next to a photograph of antioxidant rich foods like strawberries, raspberries, blueberries, and blackberries.  J&J argued that “the FDA affirmatively prohibits manufacturers from labeling products in any manner that suggests that ‘a natural vitamin in a food is superior to an added or synthetic vitamin.’”  But plaintiffs weren’t arguing that the label led consumers to think that vitamins in fruit were better.  Instead, they argued that J&J misleadingly suggested that the product’s antioxidants were actually derived from fruits and vegetables, or that they produce the same health benefits as fruits and vegetables.

Turning to Splenda Essentials with Fiber, plaintiffs alleged that the label was misleading because J&J didn’t differentiate between the health benefits of fiber found in whole grains, etc., versus refined fiber.  But that claim was preempted since the FDCA and NLEA specifically addressed the labeling of dietary fiber on a package.  The FDA rejected a proposal to distinguish between intact plant fiber and synthetically manufactured fiber.  Federal law required no more than what J&J did.

For Splenda Essentials with B Vitamins, plaintiffs challenged the statement that it would “help support a healthy metabolism.” J&J argued that this was a structure/function claim specifically permitted by FDA regulations, but preemption for structure/function claims was limited to dietary supplements, not food.  J&J argued that the preemption provisions should be read broadly since the DSHEA’s goal was to bring dietary supplement labeling in line with food labeling.  But the specific language of the preemption provision applied to dietary supplements, not food, and preemption statutes are to be construed narrowly.  Nor was the claim impliedly preempted; J&J didn’t show that these claims would upend a carefully calculated scheme. The FDA hasn’t promulgated nuanced regulatory guidelines on food structure/function statements.  Even if structure/function claims are permitted by the FDA, FDA regulations bar misleading statements, and plaintiffs alleged misleadingness.

J&J argued that plaintiffs were bringing a mere lack of substantiation claim, and the court agreed in part.  “A claim can survive a lack of substantiation challenge by, for example, alleging studies showing that a defendant's statement is false. In contrast, a plaintiff's reliance on a lack of scientific evidence or inconclusive, rather than contradictory, evidence is not sufficient to state a claim.” With respect to B vitamins and fiber, plaintiffs alleged only lack of substantiation--“no reliable studies have shown” that Splenda Essentials with B Vitamins promotes weight loss, that “there is no scientific consensus that refined fibers function like intact fibers”,  and that “research is inconclusive about the physiological benefits of refined, processed fiber.”  They didn’t cite any source stating that B vitamins don’t contribute to weight loss or that the effect of refined fiber is actually different than intact fiber. However, plaintiffs did allege falsity with respect to some claims, “which further confirms that Plaintiffs' claims lacking such allegations rest on mere lack of substantiation theories.” They couldn’t rely on FTC substantiation standards for health claims, since private citizens under California law can’t bring lack of substantiation claims.

However, their claims based on Splenda Essentials with Antioxidants were “adequately, if tenuously, pled.”  The allegations that the label misleadingly suggested that the antioxidants in the product, vitamins C and E, were derived from fruits and vegetables, when they are actually ascorbic acid and synthetically created vitamin E, survived.  And they alleged the existence of at least one source stating that the vast majority of antioxidant benefits from fruit come from the entire fruit, and not just the vitamin C.  This properly alleged misleadingness as to the source of the vitamins and as to whether Splenda’s benefits were the same as benefits from fruit. 

The court noted that federal law expressly permitted certain statements.  It was therefore unclear how much a court could rely on preempted statements when considering what a reasonable consumer would think of the whole label.  Still, because the Antioxidants label might be misleading to a reasonable consumer regardless of the preempted statements, the court didn’t need to resolve the question.

The statement “20% of the daily value of antioxidant vitamins C & E, like those found in fruits and vegetables,” when viewed in the context of the photos of multiple berries, could create the misleading impression that the vitamins “are derived from fruit or provide [ ] the same benefits as real fruit, even though they do not provide any notable health benefits.” A reasonable consumer could think that the antioxidants were derived from berries, rather than ascorbic acid and synthetically created vitamins, and might also incorrectly believe that Splenda Essentials has the same health benefits as consuming real fruit.

However, putting “Essentials” in the name wasn’t misleading, despite plaintiffs’ arguments that it “cue[d] customers to think this product is a necessity” and suggested that the nutrients included are necessary to be healthy.  “Essentials” was mere puffery.

Because the consumer law claims survived, so did the breach of implied warranty of merchantability claim.

reading list: FTC guidelines for fitness claims?

Heather M. Mandelkehr, When toning shoes strengthen nothing more than likelihood of lawsuit: why the Federal Trade Commission needs guidelines regarding proper substantiation of fitness advertisements, 20 Jeffrey S. Moorad Sports L.J. 297-346 (2013).

FDLI conference: top cases

Food & Drug Law Institute Annual Conference

Top 20 Cases in Food & Drug Law in 2012 and Cases to Watch in 2013

Bill Janssen, Charleston School of Law: Weddle v. Bayer AG

Weddle, former college football player/San Diego Chargers player.  Aug. 2009 copromotion between Bayer and a sports publication, Athlon: jointly marketing a football yearbook and Alka-Seltzer.  Companion packaging includes an image of Weddel (photoshopped without his permission; his number 32 is visible).   Sued for misappropriation of likeness.  Typical defenses—innocent infringement, First Amendment, newsworthiness.  Weddel moved to strike affirmative defenses under Iqbal/Twombly.  Does Twiqbal apply to defenses?  Generations of federal pleaders have pled sparse/spartan, nonfactual affirmative defenses, notifying plaintiff of the category of the defense defendants are asserting.  Eliminating all the legal conclusions, they don’t allege surviving facts!  (Although one could argue, I suppose, that given the allegations of the complaint, the legal conclusions are backed up by facts.) 

Initially defendants attempt to enhance some of the factual bases for the affirmative defenses, but not the First Amendment defense: purely a legal claim.  Will the defendants have the legal right to introduce evidence about a First Amendment defense?  There is no circuit-level authority on pleading general/affirmative defenses.  There is a horrific split among district courts throughout the 9^th Circuit.  Judge examines text & function of the two rules.  Rules are textually different.  Rule 8(c)(1): defenders must “affirmatively state any avoidance or affirmative defense,” while claimants must plead a “claim showing that the pleader is entitled to relief.”  That language points against applying Twiqbal. Defending parties and pleaders are not similarly situated—defenders have less time; other concerns.  Twiqbal ought not to apply.  In a quick docket jurisdiction, leave to amend may be hard to come by.

On one side: fairness. It’s only fair to treat all federal pleaders the same.  Plausiblity isn’t the same as possibility, and plausibility saves costs, time, and discovery. Over the years, though, the courts grow to conclude that there are important differences.   Defenders only get 21 days; only defenders must counterplead; unasserted affirmative defenses are deemed waived; defenders gather info reactively; judicial culling usually not necessary for factless affirmative defenses; discovery is already opened; risk of inducing extortionate settlements is low; won’t delay.  Original trend was 50/50 but courts are now trending to not apply Twiqbal.

But: J&J Sports Productions sues a bunch of establishments for misappropriating its signal.  Four cases: E.D. Cal: Twiqbal does apply to affirmative defenses; boilerplate affirmative defenses stricken for lack of plausibility.  Arizona: Twiqbal doesn’t apply. Indiana: Twiqbal doesn’t apply, but boilerplate affirmative defenses are stricken for lack of “fair notice.”  So three variants today exist.  One view: plausibility required; another: simple notice of the type of affirmative defense: third, “enough facts to impart contextual comprehensibility”—good luck with that.

This is a problem for federal litigators, and not one being well highlighted.  Could have significant consequences—emerging majority exists but is very fractured. The split is not national, not circuit-level, not district-level, but chambers-level.  Waiver risk in unasserted/underasserted affirmative defenses, which can be case-dispositive with new boundary-pressing defenses given new life by recent litigation developments.  This is a discretionary ruling; judges have wide discretion and examined on appeal for harmless error; it’d be an interlocutory appeal anyway if there isn’t a settlement or defendant victory on other grounds, so this will be around for years.

Resolving Twiqbal’s applicability has potentially case dispositive implications, especially for a re-enlivened First Amendment defense.  The only current solution is research at the chambers level.

Case to watch for 2013: how broadly Buckman preemption ought to apply in 9^th Circuit; court held that it didn’t apply if the foundation of the claim was linked to a statement that finds its basis in state law.  Stengel: Arizona case alleging that FDA didn’t receive all it was supposed to receive and thus wrongfully approved/wrongfully allowed a product to stay on the market. Common law claim for failure to warn. Panel originally applied Buckman preemption. En banc, 9^th Circuit unanimously reversed.  Joined a bunch of other circuits; split with 8^th; good candidate for SCt review.

Allison Zieve, Director, Public Citizen Litigation Group/Director, FDLI Board

Bartlett v. Mutual: generic equivalent of product that poses risk of extremely serious side effect: lost 60-65% of her skin deteriorated or burned off; had to be put in a coma for months; tube fed for a year; permanently disfigured and legally blind; many serious consequences.  She sued Mutual under NH product liability law on a theory of design defect: magnitude of risk outweighed benefit to public.  Jury returned a verdict for Bartlett.  Of course, none of this is relevant to the issue before the SCt.

Latest in a line of FDA preemption cases about state law product liability.  There is no federal product liability law, so if state law is preempted, there’s no way to seek compensation and no potential liability for manufacturer. Mutual moved for JMOL arguing preemption, because Hatch-Waxman required it to use the same design as the brand name equivalent.  One element: the role of the labeling in the product defect case—under NH law, manufacturer can use label to ameliorate danger by providing a warning that makes the danger manageable.  In Mutual, company didn’t assert that defense at trial, and the jury was instructed that the standard was whether the product was unreasonably dangerous.  So one question is whether the label ought to matter, and whether design claims are preempted in the same way that label claims are because federal law requires the design of the product to be the same as the brand.  The First Circuit said that one could comply with both federal and state law by not marketing the product—federal law doesn’t require the marketing of the product.  Congress didn’t intend to make the FDA the sole means of ensuring safety and effectiveness.

SCt granted cert and FDA filed amicus.  Supreme Court has disagreed with FDA on preemption in recent cases (in both directions), unusually for cases about implied preemption. FDA says the question is close but comes down on pro-preemption unless design claims are based on new scientifically significant evidence that would have rendered the product misbranded under federal law.  She doesn’t think this exception would have any practical effect.  Prediction: court will decide for both prescription generics and brand names, but the OTC statutory analysis is different.

Note that the costs of injury will be the same; the difference is who pays.  Traditionally allocation of responsibility has been left to state courts, but that’s been shifted as a result of preemption.

Short case to watch: Mississipi ex rel Hood v. AU—whether a state parens patriae case is removable under CAFA.  Conflict is over whether it’s a mass action that can be removed; 5^th Circuit has said yes but others have said no. Of interest to food & drug folks because AGs sue them a lot.

Margaret Foster Riley, U Va. Law: US v. Regenerative Sciences LLC, 878 F. Supp. 2d 248 (D.D.C. 2012)

Deceptively simple case, like the healthcare cases.  Probably your reaction to the outcome depends more on first principles than on the law or the facts.  This case looks really easy but is likely not. Through litigants’ tenacity we may actually get profound changes in law.

Regenerative Sciences operates only in Colorado.  Its product/treatment Regennex consists of autologous stem cells from bone marrow expanded in a nutrient solution including growth factors from pateint’s blood, isolated using an enzyme, inspected in a Colorado lab, combined with at least one drug product and other additives, placed in syringes and injected into the patient to treat orthopedic conditions and injuries.  (Claims trade secret over what’s actually in it.)  Either creating a product or expanding it into a treatment and putting it back into the patient.

Issues: Is Regennex a drug subject to FDA regulation or is its use the practice of medicine outside FDA purview?  (Does it change the biological characteristics/change use in the body when reimplanted?  FDA says by expanding cells, growing them, and adding other products, you’ve moved out of the lower standard for regulation and into the tier of creating a new product.  Bone marrow transplants are ok to the FDA.) Does it involve more than “minimal manipulation” making it subject to more stringent approval requirements?  Since RS operates only in Colorado, does FDA’s Commerce Clause based authority extend to its activity?  (I can’t see how the healthcare cases change this, because this is affirmative commercial activity instead of inactivity, but then I’m traditional.)

Court says: Regennex is a drug and a biological product w/in the meaning of the FDCA.  It qualifies as “more than minimally manipulated” and that makes it subject to the FDCA’s approval requirements. Because Regennex includes drug components shipped in interstate commerce, the interstate commerce requirement was met.  Going forward, it might not be hard to make the components in Colorado, so what then?

RS has appealed.

Issues: Stem cell politics. Are autologous stem cells (taking it out of a person and putting it back in)/“regenerative medicine” different?  FDA says autologous stem cells aren’t different and her opinion is that we don’t know how they work, so we need to think a lot more about safety etc. Is the minimal manipulation standard for FDCA coverage too restrictive?  Stem cell tourism—companies moving abroad, with fewer protections for patients--and the future of industry.

She also discussed Myriad as a case to watch and made a point that she didn’t put this way but I will: Sotomayor was excoriated in commentary for using an analogy to cookie components, whereas Roberts completely got away with a baseball analogy, and she made the point that she’d used a cake analogy once in class and this made the law school’s “revue” for four years running.  While the takeaway she gave was “don’t use cooking analogies,” perhaps a more pointed takeaway would be that male-oriented/sports analogies pass unnoticed while analogies to more feminized endeavors get picked apart as ludicrous. 

Lisa Heinzerling, Georgetown: Pom Wonderful v. Coca-Cola

“100% juice blend to help nourish your brain”: Product name Pomegranate Blueberry (small print: flavored blend of five juices).  Vignette: picture of the fruits, including a pomegranate, apple, raspberries, and blueberries.  Pom alleged that this was misleading because pomegranates were .3% of beverage and blueberries were .2% of the product.  Many consumers would be surprised to find the small amounts of the product represented by the fruits in the name.  Two federal regulatory regimes competing for space in the same general area: FDCA and Lanham Act.  How will they coexist?  Not federal-state preemption.

In 1976, half of our food supply was regulated by food identity standards.  Here, the issue is whether Coca-Cola engaged in false advertising under the Lanham Act; food identity standards come into play because FDA has a regulation on multiple-juice beverages. The name was fine under that regulation.  Thus, the 9^th Circuit said, the FDA had engaged in comprehensive label regulation for multiple juice beverages, so the Lanham Act had to give way.

Odd features: no close analysis of the exact regulatory language; no finding of irreconcilable conflict; no recognition that the Lanham Act came after the FDCA and would ordinarily prevail. 9^th Circuit analysis is just not careful. It has a certain sense but is casual.  Indeed, in a number of cases, the 9^th Circuit doesn’t seem to know what the FDA did—“as far as we can tell,” and “apparently,” which is odd since you can see what the FDA did in the Federal Register in 1993. 

On the merits, one could say the 9^th Circuit got it wrong—refers to “comprehensive regulation,” but Pom Wonderful points out in its cert petition that the FDA lacks the resources to go after all the food mislabeling out there.  FDA regulation is a floor, but doesn’t give authority to go out & deceive consumers.  Pom’s position: be comfortable with multiple regulatory regimes.

A number of district courts have taken this decision to mean not just that the Lanham Act should give way but also that state laws should.  (Ed. note: though others haven’t; I’ve got another upcoming case that reads Pom Wonderful narrowly.)

Case to watch: Pom Wonderful’s challenge to the FTC’s enforcement action.  (Regulations for thee but not for me!  Pom’s claim against Coca-Cola seems strong to me, though its defense against the FTC is unconvincing.)

Various points of discussion; Zieve made the point that the FDA is gunshy now after cases after Caronia and Western States; shockingly, courts aren’t that sympathetic to the public safety mission. 

supplier's state can exercise personal jurisdiction over reverse passing off claim

Sarah's Hat Boxes, L.L.C. v. Patch Me Up, L.L.C., 2013 WL 1563557 (D.N.H.), 2013 DNH 058

SHB sued defendants for violating the Lanham Act and the New Hampshire Consumer Protection Act, as well as tortious interference, alleging that they stole business from SHB by making false claims on their website about the source, quality, and patent status of the hat boxes listed for sale.

Since 2006, SHB’s hat boxes have been designed, made, and shipped from its office in New Hampshire, though most sales are made online.  Patch Me Up (PMU) began operating in 2000.  It sells spa products and began buying SHB’s hat boxes in 2009 to use them as packaging for the spa products.  L’Artisane Box is a division of PMU that sells hat boxes online.  The principal place of business for both is California, where the individual defendants reside.

PMU bought hat boxes wholesale, telling SHB that it intended to use the boxes as packaging.  It bought about 900 boxes; at the bottom of 9 out of 11 invoices, SHB wrote that the buyer agreed to suit in New Hampshire in any contract-related dispute.  PMU asked SHB not to put its mark on the boxes, and instead SHB printed “Patch Me Up” on some boxes at PMU’s request.

PMU asked SHB for the name of its New Hampshire-based web designer, which SHB provided.  In 2012, PMU asked the designer to create a website for L'Artisane Box that would be identical to the SHB website; the designer refused and proposed an alternative design, which PMU rejected.  Later that year, SHB learned that PMU had revised its website to include a link to L’Artisane Box and a reference to hat boxes offered through that entity.  The L’Artisane Box website has many photos of hat boxes purchased from SHB.  The text accompanying the photos claimed that “Her [one individual defendant’s] decorative hatboxes are one-of-a-kind patented boxes, which have received wide recognition and acclaim.... They come with a signed and numbered certificate of authenticity.... We are the manufacturers and can give you the best price and shipping available, period.... We have been in the press, many magazines, radio, newspapers, and TV.”  The website also claimed that the hat boxes are “patented,” have “copyright design,” and “design patent[s] pending.” SHB alleged that these claims were false because the defendants had never designed a hat box, made a hat box, copyrighted or patented a hat box, or won any awards for hat boxes.

PMU and L’Artisane Box took a booth at the International Gift Show in San Francisco and placed SHB boxes prominently around the booth and didn’t display any other boxes.  SHB discovered that defendants were advertising SHB hat boxes as designed and made by L’Artisane Box, SHB demanded that they stop misrepresenting the origin of the boxes.  (From what I can tell by a quick look at the website, defendants add decorations to some of the boxes and could, under most applications of Dastar, legitimately claim to be the source and probably even the manufacturers of those, but it’s not immediately clear to me whether defendants make the challenged claims with respect to all the boxes and not just the altered ones.)

SHB further alleged that defendants offer hat boxes at prices below those charged by SHB, and intend to fill the orders with boxes not made by SHB even though the ads incorporate SHB boxes.  SHB also alleged that those other boxes would be inferior, not handmade, not made in the US, and not made with eco-friendly/nontoxic materials (as advertised).

SHB then alleged that several New Hampshire consumers attempted to purchase SHB-made boxes from L’Artisane Box, but defendants provided excuses for not fulfilling the orders—once because one box was allegedly discontinued and they were behind on orders on the other box, and once “citing trouble with production machinery.”

The court found personal jurisdiction over PMU (and its division L’Artisane Box), as well as over the named defendants because each had sufficient minimum contacts with New Hampshire. “The harm SHB alleges arose directly from the defendants' decision to contact SHB in New Hampshire to purchase hat boxes and to use SHB's hat boxes from New Hampshire to prepare the allegedly false marketing.”  Plus, even without the negotiations, purchase orders, and contact with the web designer, the L’Artisane Box website targeted New Hampshire residents and listed cities and towns in New Hampshire as places where it sells boxes; the court accepted SHB’s argument that listing these cities and towns was designed to make the L’Artisane Box website appear in New Hampshire consumers’ search results.

The court didn’t have to consider the boilerplate forum selection clause at the bottom of the invoices, because plaintiffs established purposeful availment regardless.  Defendants knew SHB was a New Hampshire corporation when they placed their orders and could have forseen being haled into court in the state.  Exercising jurisdiction also comported with “fair play and substantial justice.”  The burden of litigating in New Hampshire fell short of constitutional significance; litigating in California would pose an equal burden to SHB.  New Hampshire also had a reasonable interest in protecting its businesses.

The court then turned to whether SHB stated a claim under the Lanham Act.  Falsity/misleadingness, SHB’s knowledge of PMU’s intent to rebrand the boxes under PMU’s own label, and lack of distinctiveness were all factual issues that couldn’t be decided on the pleadings.  SHB argued that the false “patented” claim would mislead consumers into thinking that PMU was the only source of SHB hat boxes; though it knew that defendants were going to rebrand and resell the boxes, it didn’t consent to the way defendants advertised the boxes.  This was enough on a motion to dismiss. This also meant the state law consumer protection claims survived.

However, the tortious interference claim failed: SHB alleged that defendants’ intentional misrepresentations caused SHB to “lose customer orders and suffer damages because the public perceived that defendants were manufacturers of SHB's pictured boxes as well as the owner of copyrights, patents and awards on the boxes.” There was no allegation of existing or specific prospective contractual relationships with third parties.

Vegan alternative has standing against foie gras producer

Animal Legal Defense Fund v. HVFG LLC, 2013 WL 1563215 (N.D. Cal.)

ALDF alleged that Hudson Valley Foie Gras violated the Lanham Act and California’s UCL and FAL by marketing their foie gras as “the humane choice” without producing it humanely.  At 3 months old, Hudson Valley’s ducklings are allegedly moved into special feeding barns, where they’re restrained by the neck 2-3 times per day to be force-fed.  Corn mash is pumped directly into their stomachs, with amounts increasing slightly each day.  After about a month of this, at a time just before force-feeding typically becomes fatal, the ducks are slaughtered, though some die from the force-feeding before that.

The alleged cruel and inhumane aspects were that (1) injuries and illness commonly result from the force-feeding, “including ruptured esophagi, bone fractures, inhalation of food into the lungs, and bacterial infection,” (2) the force-feeding enlarges ducks’ livers, resulting in hepatic lipidosis, which causes liver failure as well as seizures and nervous system impairment, and (3) the extremely swollen liver may lead to difficulty breathing, severe pain from the liver's capsule stretching, and broken legs as a result of the excess body weight.  Foie gras ducks are not given veterinary care and thus may suffer up to four weeks until they die or are slaughtered.

In 2004, California banned force-feeding birds for the purpose of producing an enlarged liver, and also banned the sale in California of any products resulting force-feeding, but the law only took effect in 2012.  The delay was designed to allow California foie gras producers to find a humane way to produce the desired fatty liver, but no one was able to do so.  Thus, there are no longer any foie gras producers in California. However, out-of-state foie gras producers may market and ship their products to California. Hudson Valley is the largest foie gras producer in the United States and markets its foie gras as “the humane choice.”

Plaintiff Regal Vegan produces a non-meat, spreadable product called “Faux Gras” and sells it online as well as in Colorado and Washington, DC.  It alleged that its sales are harmed by Hudson Valley’s “humane” claim.  ALDF is a nonprofit focused on animal cruelty.

Hudson Valley challenged plaintiffs’ standing.  Article III injury occurs in a false advertising case if some consumers who bought the defendant’s product under a mistaken belief fostered by the defendant otherwise would have bought the plaintiff’s product.  Plaintiffs can show lost sales or “probable market behavior” by establishing a “chain of inferences” showing how defendant's false advertising could harm them.  Here, Regal Vegan presented surveys showing that animal welfare was important to consumers in choosing what food to buy; that consumers stop buying foods they believe are produced in an unethical way; that they will choose otherwise-identical “humane” products over those that are not humane; that meat substitutes like Regal Vegan's product have gained a significant market share; and that many meat-eaters who have reduced their meat intake choose meat substitutes instead.  Moreover, its product’s name is a play on “foie gras” and it aims to compete in the pâté market.  Faux Gras was specially formulated to satisfy a craving for pâtés.  Thus, Regal Vegan alleged sufficient facts to show that it competed with Hudson Valley for the same pool of potential customers: those interested in purchasing humanely produced pâtés.

Likewise, Regal Vegan alleged injury fairly traceable to Hudson Valley’s acts.  “[C]ausation follows from accepting that Regal Vegan and Hudson Valley may produce a competing product. In the market for humanely produced pâtés, a statement by one competitor that its product is ‘humane,’ if in fact it were not, would plausibly disadvantage its humane competitor.”  And redressability also followed.  Hudson Valley argued that even if it had to stop using “humane,” Regal Vegan would still suffer because foie gras would still be available and competing with Faux Gras.  But it would be able to compete more fairly in the market, which sufficed.

Hudson Valley then argued that plaintiffs lacked Lanham Act standing.  The court agreed: ALDF doesn’t compete with Hudson Valley to sell anything, and thus doesn’t compete for dollars from the same consumer group.  “A theoretical educational competition for the “hearts and minds” of consumers is insufficient to give ALDF Lanham Act standing.”

Regal Vegan, however, had Lanham Act standing, which requires commercial injury based on a misrepresentation as well as “competitive” injury. Direct competition leads to a presumption of commercial injury.  Hudson Valley argued that Regal Vegan wasn’t a direct competitor (why not?) but proof of direct competition isn’t necessary.  Regal Vegan alleged that the parties “compete in the same industry, food products, selling the same product, pâté, and vie for the same consumer dollars from the same target audience, purchasers who care about the humane treatment of animals raised for food production.”  

Regal Vegan cited Kournikova v. General Media Communications, 278 F. Supp. 2d 1111 (C.D. Cal. 2003), which held that an athlete could maintain a Lanham Act false advertising claim against a men’s magazine for printing nude photos falsely labeled as photos of her.  The court (applying the 9^th Circuit’s typically unusual standard) found that she could proceed even though athletes and magazines are in different industries; because she wasn’t just an athlete but also a sex symbol, both parties “compete[d] for the same dollars from the same target audience—namely men.” Hudson Valley cited Brosnan v. Tradeline Solutions, Inc., 681 F. Supp. 2d 1094 (N.D. Cal. 2010), which held that, though the parties were both in the credit repair industry, they provided different types of credit repair services and thus weren’t competitors.  Hudson Valley argued that, if Regal Vegan’s argument were accepted, peanut butter manufacturers would also be in competition with foie gras producers, since they too make a humane spread.

The court found the key difference to lie in the manufacturers’ “marketing posture”: “When one product is marketed to compete with another product whose advertisements may mislead consumers, then the first product's maker may be harmed.” While peanut butter is unlikely to be marketed as a foie gras alternative, Faux Gras is “plausibly an indirect competitor.” The relevant market could be more specific than “food products”—it could be “spreadable pâtés for consumers interested in animal welfare.” (Cf. Mark Lemley & Mark McKenna on defining markets in IP.)

Hudson Valley then argued that it wasn’t making a falsifiable claim, but rather a mere statement of opinion that no consumer would interpret as a statement of objective fact.  Regal Vegan alleged that the context of “the humane choice” in Hudson Valley’s ads gave the impression that there was independent authority and research determining that its process was humane.  “Humane” was a hard word to pin down, but Congress has twice defined “humane” in reference to the killing of different animals.  (See also Salon on the appeal of “humane” slaughter.) Though both statutes addressed slaughter, not life, they both focused on minimizing the pain to animals. The statutes taught that, in some contexts relating to food animals, Congress had found “humane” definable, and that a possible definition would involve treatment that doesn’t cause undue pain.  Thus, “the humane choice” might be falsifiable and reasonably interpreted as a statement of objective fact, at least at the motion to dismiss stage.

lack of substantiation not actionable by consumers

Johns v. Bayer Corp., 2013 WL 1498965 (S.D. Cal.)

The court engaged in an extremely detailed discussion of the scientific evidence here in resolving some of the parties’ Daubert challenges to the other side’s experts.  Plaintiffs alleged that Bayer made false and deceptive claims about prostate health benefits for One-a-Day Men's Health Formula and One-a-Day Men's 50+ Advantage. They argued that, despite mounting scientific evidence that the ingredients didn’t support prostate health and didn’t reduce the risk of prostate cancer, Bayer deceptively marketed the products as having such benefits, gaining an unfair advantage over other vitamin makers.  The key two claims were representations that the products supported overall prostate health and that “emerging research suggests selenium may reduce the risk of prostate cancer” (only made for the Men’s Health product).  The selenium claim was on the back of the product package, highlighted, bolded, and italicized.  Bayer ran many TV ads with the same or similar messages, e.g., “Did you know one in three men will face prostate issues? One in three, really? That's why One–A–Day Men's is a complete multivitamin ... with Lycopene, which ... Harvard studies suggest may help prostate health.”

Plaintiffs alleged that they read and relied on the claims on the product packaging, and saw and relied on TV ads making the prostate claims.

The parties each identified three experts and sought to exclude the other’s.  Because the court found that plaintiffs’ claims were wrongly based on lack of substantiation rather than proof of falsity or deception, summary judgment was warranted without any inquiry into the validity of plaintiffs’ damages calculations. 

Plaintiffs’ experts essentially opined that the prostate claims were unsubstantiated—not backed by credible scientific evidence—when Bayer made them, and that scientific evidence showed that selenium supplementation didn’t affect the incidence of prostate cancer. Bayer’s experts opined that scientific evidence existed to substantiate the claims during the class period. 

I won’t go through the arguments in detail, but among the tidbits: Bayer argued that some of the expert opinions were preempted by FDA guidance allowing Bayer to make these claims.  In 2003, the FDA approved a “qualified health claim” regarding selenium: “Selenium may reduce the risk of certain cancers. Some scientific evidence suggests that consumption of selenium may reduce the risk of certain forms of cancers. However, the FDA has determined that this evidence is limited and not conclusive.”  The court disagreed. While any allegations based on language exactly replicating this statement would be preempted, the FDA didn’t allow any claim specifically linking selenium to a reduced risk of prostate cancer.

Moreover, though Bayer was not required to substantiate its claims, objecting to an expert’s conclusion that the claims were unsubstantiated wasn’t a proper means to exclude testimony.

The FDA doesn’t recognize food intake studies as substantiation for cancer risk reduction claims; plaintiffs argued that Bayer’s experts therefore couldn’t rely on food intake studies, while Bayer argued that the World Cancer Research Fund and at least one study disagreed, and that it was only making structure/function claims, not cancer risk reduction claims. The court determined that plaintiffs’ objection went to weight rather than admissibility.

Testimony from plaintiffs’ marketing expert was also excluded, despite his extensive qualifications and the arguable reliability of his conclusions.  His report was ultimately just a chronology of Bayer’s marketing efforts focusing on prostate health as the “reason to believe” in the products, quoting third party market research and Bayer’s own internal documents.  The underlying evidence, if admissible, could come in at trial without an expert’s help.

The court then turned to Bayer’s motion for summary judgment.  Under California law, private parties may not bring lack of substantiation claims.  (This discussion finesses the question of establishment claims—statements that expressly or by implication indicate that scientific evidence supports the marketer’s specific claim.  Claims for supplements or other health-related products are almost inherently going to be establishment claims.  Lanham Act doctrine is that establishment claims can be proved false by showing that the evidence underlying the establishment claim doesn’t actually support it.  Why can’t you also show a violation of consumer protection laws when (1) reasonable consumers would receive a “tests prove” message, (2) tests don’t prove the statement at issue, and (3) reasonable consumers would attach weight to/rely on the presence of scientific proof?)

The reason for limiting substantiation claims to public authorities is to “prevent undue harassment of advertisers” and provide “the least burdensome method of obtaining substantiation for advertising claims.”

Initially, Bayer argued that the UCL and CLRA claims were preempted by the Nutrition Labeling and Education Act (NLEA), because the FDA drafted and approved the statement “selenium may reduce the risk of certain forms of cancer.”  Bayer argued that, logically, prostate cancer was just a specific form of cancer, and “some scientific evidence” was essentially synonymous with “emerging research,” so Bayer’s statement “emerging research suggests selenium may reduce the risk of prostate cancer” was squarely within the ambit of the FDA-approved language.  (Later, the FDA approved the following qualified health claim: “Two weak studies suggest that selenium intake may reduce the risk of prostate cancer. However, four stronger studies and three weak studies showed no reduction in risk. Based on these studies, FDA concludes that it is highly unlikely that selenium supplements reduce the risk of prostate cancer.”)

The court found no preemption.  “[T]he representations at issue clearly included additional language never approved or even considered by the FDA.” Even the older FDA-approved claim was “Selenium may reduce the risk of certain cancers. Some scientific evidence suggests that consumption of selenium may reduce the risk of certain forms of cancers. However, the FDA has determined that this evidence is limited and not conclusive.” This never specifically linked selenium to prostate cancer, whereas Bayer did, stating on the package, “Did you know that prostate cancer is the most frequently diagnosed cancer in men and that emerging research suggests Selenium may reduce the risk of prostate cancer? One–A–Day Men's Health Formula is a complete multivitamin plus key nutrients including Selenium to support a healthy prostate” and only then adding the FDA-approved statement.  “[I]t is clear that Bayer exceeded the bounds of the language authorized by the FDA.”  Under the UCL and CLRA, it’s the overall representations that matter.

However, Bayer did better with its substantiation argument.  Plaintiffs argued that they were really contending that the prostate statements were provably false/likely to deceive consumers.  Here, they contended, substantial evidence existed that the ingredients Bayer pointed to don’t support prostate health or reduce the risk of prostate cancer.  So this wasn’t a case where there was no evidence one way or the other, but rather a case where Bayer’s claims had been disproved.

At least with respect to zinc and vitamin E, Bayer had evidence allowing a structure/function claim for prostate health and plaintiffs didn’t present evidence that zinc and vitamin E don’t support prostate health, instead just trying to cast doubt on Bayer’s evidence.  As to lycopene and selenium, the court also found that there was evidence to support Bayer’s contentions and that plaintiffs were ultimately relying on a lack of substantiation theory. 

The court broke the timeline down based on the appearance of a major selenium study changing the landscape of scientific understanding over time.  (Interestingly, plaintiffs argued that Bayer internally disagreed with its lawyers’ attempts to discredit a major study, citing internal documents saying things like “[after this study,] Selenium ... looks like it not only has no effect on prostate health but as a supplement, it may do more harm in prostate cancer patients.” ) The court found that plaintiffs raised genuine concerns about substantiation after the study, but still couldn’t bring the claim.  Moreover, the court found that there was still a possibility that selenium supplements could reduce the risk of prostate cancer.  Thus, this wasn’t a case of per se falsity through complete lack of substantiation.  “[I]n the absence of affirmative evidence that scientific research did not support the Prostate Cancer Claim … , the strength of Bayer's evidence is irrelevant and Plaintiffs' claims are based on “lack of substantiation” rather than proof of falsity.”  The difference between a claim with no evidentiary support and a claim that has been disproved was dispositive.  Any substantiation determination would have to be made by the FDA.

Plaintiffs argued that they could still show deceptiveness.  The court disagreed.  “[C]ase law is less than clear as to what a private plaintiff needs to prove to successfully litigate a cause of action alleging misleading or deceptive practices,” and plaintiffs’ deceptiveness arguments were confusing.  The court understood them to be that Bayer’s representations were deceptive because they were unsubstantiated, but because Bayer’s representations weren’t provably false, private plaintiffs couldn’t bring that kind of claim.  (Again, note the finessing: which representations weren’t provably false?  The explicit health/cancer claims, or the implicit “scientific evidence supports our health/cancer claims”?)  The court contrasted this to a case in which plaintiffs explained how the representations at issue were deceptive and had proof of actual deception.