Class Action False Advertising Suits Continue to Inflict Pain on the Dietary Supplement Industry
Creative and aggressive plaintiffs’ lawyers are forever on the hunt for new theories under which to bring potentially lucrative class action lawsuits utilizing plaintiff-friendly state consumer protection statutes (with California being the most favored forum). The dietary supplement industry has been in the plaintiffs bar’s cross-hairs for more than a decade now. As the case law has evolved and developed, supplement companies have had notable success fighting these suits. Just last week, Judge Miller in the Southern District of California tossed a proposed class action against Germ-X maker Vi-Jon Inc. accusing it of mislabeling its hand sanitizer, finding that the consumer “only pled a conjectural and hypothetical injury” (a copy of Judge Miller’s decision can be found here), and the Ninth Circuit has made it clear that where a consumer challenges an advertisement as false or deceptive the plaintiff must demonstrate that there is scientific evidence showing that the product does not provide the claimed benefit. Nevertheless, class action false advertising lawsuits continue to cost the supplement industry billions of dollars.
Case in point, last week Reckitt Benckiser LLC agreed to pay $53 million to settle claims that it deceptively marketed a glucosamine supplement in what the plaintiffs are describing as “the largest dietary supplement class action settlement ever reached.”
The Plaintiffs claimed that they and others were induced to buy “Move Fee Advanced,” a glucosamine supplement, based on claims made in advertisements and on the packaging that the product treats joint pain and stiffness. Plaintiffs filed suit in the Northern District of California alleging that Reckitt Benckiser violated California’s CLRA, UCL, FAL, and New York General Business Law section 349 and 350 by advertising Move Free Advanced as providing joint health benefits that it does not provide. The parties engaged in four years of extensive discovery culminating in a heavily contested class certification motion. In their motion, Plaintiffs submitted evidence showing that more than a dozen independent studies since the late 1990s found no improvement in pain, mobility or quality of life for patients treated with glucosamine or chondroitin, separately or in combination. In response, Reckitt Benckiser argued that there were too many individual factors to certify a class or set class damages, including how individuals interpreted the advertising, how dissatisfied individuals were with the product, or how effective the product was on individual customers’ particular medical conditions.
Judge Vince Chhabria disagreed, and certified both a California and New York class of buyers of Reckitt’s “Move Free Advanced” supplement, finding that “plaintiffs have submitted evidence that Reckitt Benckiser labeled their ‘Move Free’ glucosamine and chondroitin-based supplements with claims suggesting that the supplements would improve joint functioning, but the scientific studies show that the ingredients in the supplements do not actually improve joint functioning.”
After the class was certified, Reckitt Benckiser moved for summary judgment on the grounds that all of Plaintiffs’ claims were preempted by the Food Drug & Cosmetic Act, that Plaintiffs could not prove that the Move Free Advanced’s advertising was false and that Plaintiffs’ full refund theory failed because Move Free Advanced was not a completely worthless product. Judge Chhabria again disagreed and denied Reckitt Benckiser’s motion, finding that there were material facts at issue that precluded granting summary judgment.
Following several mediation sessions, the parties reached a proposed settlement that will provide class members with cash refunds for up to three purchases of Move Free Advanced for a total of $66 without the need for proof of purchase. Alternatively, consumers could spend up to $225 on certain Reckitt Benckiser products. Consumers with proof of their purchases will receive refunds for all of their purchases. If the settlement is approved, plaintiffs’ counsel will be paid up to $12.5 million in attorneys’ fees plus court costs.
Given the potentially lucrative fee awards, false advertising class actions will continue to be a significant risk facing the dietary supplement industry. The plaintiffs’ bar closely watches government regulatory activity and companies should anticipate and be prepared to defend against copycat claims.
Fortunately, there are a number of steps that can help shield dietary supplement companies from these types of lawsuit. Beyond ensuring compliance with relevant FDA regulations, companies should review product label and marketing materials to ensure that any claims that they make are not misleading and have adequate scientific support. They should also evaluate whether either their product labeling or advertising makes any implied claims or message that if challenged, could not be substantiated.