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Athletic Tape Maker Feels the Pain, Settles Misleading Advertising Suit

Seeking to "wrap up" a misleading advertising class action suit, a class of plaintiffs and athletic tape maker KT Health Holdings LLC and KT Health, LLC ("KT Tape)" have agreed to a proposed $1.75 million settlement. In a complaint filed in October 2015, the proposed class ("Plaintiffs"), led by Alexander Vuckovic ("Lead Plaintiff"), alleged that KT Tape's advertisements, photographs of athletes wearing KT Tape, and other marketing practices, created the false impression that its "kinesiology tape" product relieves pain and prevents injury during exercise, contentions that plaintiffs deemed "pseudoscience."  Two years after the original complaint was filed, and many strained muscles later, the parties await the judge's approval of the settlement terms and related class certification issues in an effort to finally put this matter on ice. (See Vuckovic v. KT Health Holdings, LLC, No. 15-13696 (D. Mass. Memorandum in Support May 25, 2017)).    

KT Tape differs from standard white cotton athletic tape (which is wound around areas of the body, such as sprained ankles) in that it relies on a concept known as "kinesiology taping" to microscopically lift the skin, thus alleviating pain and promoting drainage in the area. Those not familiar with it might recall the number of Olympic athletes last summer (including volleyball, water polo, and basketball players) that displayed colorful strips of athletic tape crisscrossed over aching shoulders, thighs, abs and arms in an effort to alleviate muscle strains and compete at the highest level. The tape is attached to the skin adhesively on the affected areas of the body, creating tension that is designed to relieve pain, offer support and alleviate lymphatic fluid buildup due to injury or over-use. According to KT Tape's website, the tape "lifts the skin, decompressing the layers of fascia, allowing for greater movement of lymphatic fluid which transports white blood cells throughout the body and removes waste products, cellular debris, and bacteria." All those sponsorships cost a pretty penny, and KT Tape is sold as a premium product, priced significantly higher than traditional athletic tape.

In short, the plaintiffs in their complaint alleged that KT Tape simply does not work as advertised and that consumers paid a premium for the tape because of those misleading statements. In fact, plaintiffs posit that KT Tape's creative marketing has helped to give rise to a new category of premium fitness products named "kinesiology tape," a term which plaintiffs have deemed "a scientific-sounding, made up word." (Vuckovic v. KT Health Holdings, LLC, No. 15-13696 (D. Mass. Second Amended Complaint July 7, 2017)). According to the complaint, KT Tape had represented that use of the tape could treat a variety of chronic minor sports conditions (e.g., tennis elbow, shin splints). Plaintiffs took issue with such assurances of pain relief as well as other claims about the product made on KT Tape's website. The plaintiffs also claim that the supposed restorative effects of kinesiology tape don't stick and that KT's claims that the tape relieves pain and prevents injury during exercise are "not supported by scientific evidence, and [are] not accepted by the medical community." More specifically, the Plaintiffs allege that KT Tape knew that claims about the product's health benefits were sufficiently material to lead people to purchase a product at a premium price that did not warrant pricing above traditional athletic tape. As such, the complaint asserted claims under Massachusetts law of unjust enrichment, untrue and misleading advertising, and violations of state consumer protection laws. 

In anticipation of a settlement, KT Tape sought coverage under its general liability insurance policy. The policy provided coverage for damages resulting from "bodily injury" or "property damage." Its insurer denied coverage and brought a separate action against KT Tape seeking a declaratory judgment of non-coverage. In March 2017, the court found that since the class allegations sought only economic remedies to redress economic harms and did not seek damages due to "bodily injury," there was no coverage for the class claims (the insurer was not disputing its duty to defend the minor claim by the Named Plaintiff of personal injury due to skin irritation caused by the application of KT Tape). (See The Cincinnati Insurance Co. v. KT Health Holdings, No. 16-11722 (D. Mass. Mar. 27, 2017)).

Several months after the coverage ruling, KT Tape hopped off the trainer's table and sat down at the settlement table. Under the proposed settlement, KT Tape would pay $1.75 million into a settlement fund, in addition to making certain changes to their packaging and marketing. Beyond paying attorney's fees and expenses, the settlement fund is intended to provide a cash refund of 50% of the retail price of KT Tape products purchased during the class period in Massachusetts, subject to adjustments as specified in the agreement. Under the terms, claimants can claim one package of KT Tape (without proof of purchase), and up to five packages with proof.  KT Tape also agreed to strip the phrases "it will keep you pain free," "prevents injury," and "provides 24-hour pain relief per application" from its packaging, and enlarge disclaimers on the package ("not clinically proven for all injuries") and to recast them in bold print, among other things.

After years of promising "pain relief," KT Tape is feeling the pain of a sizeable settlement that will also require changes to its marketing practices. Moreover, this Massachusetts-specific settlement could potentially expose KT Tape to further claims from consumers in other states. Outside the courtroom, at least from this weekend warrior's anecdotal observation of gym rats and budding triathletes wrapped in kinesiology tape, it seems that any purported issues with the effectiveness of the product have not lessened demand one strip.

© 2019 Proskauer Rose LLP.

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