Antitrust Law Daily Wrap Up, ADVERTISING—9th Cir.: Bodybuilding supplement maker adequately supported Lanham Act claim, (Apr 15, 2016)

By Greg Hammond, J.D.

The Food, Drug & Cosmetic (FDC) Act does not generally preclude Lanham Act claims for false labeling of food, the U.S. Court of Appeals in San Francisco has stated. Finding that a supplement maker’s Lanham Act false advertising claims were therefore not precluded by the FDC Act and that the supplement maker adequately raised issues of material fact with regard to falsity, materiality, and injury—arising from a competitor’s alleged false advertising—the appellate court reversed and remanded a district court’s order dismissing the Lanham Act claims (ThermoLife International, LLC v. Gaspari Nutrition, Inc., April 14, 2016, Per Curiam).

ThermoLife International, LLC and Gaspari Nutrition, Inc. (GNI) compete in the market for dietary supplement products related to bodybuilding. ThermoLife alleged that GNI engaged in false advertising by marketing and selling its testosterone boosters as “safe,” “natural,” “legal,” and in compliance with the FDC Act. The district court granted summary judgment in favor of GNI on the grounds that the FDC Act precluded or preempted all but one of ThermoLife’s claims, and that ThermoLife could not establish the elements of falsity, materiality, and injury.

FDC Act preclusion. The appellate court first noted that the district court did not have the benefit of the Supreme Court’s decision in Pom Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014), which squarely controls the issue in this case. Pom Wonderful established that the FDC Act generally does not preclude Lanham Act claims for false labeling of food. The appellate court therefore concluded that neither the FDC Act nor the Lanham Act expressly bars ThermoLife’s claims.

Lanham Act claims. Next, the appellate court concluded that there were triable issues of material fact with regard to falsity, materiality, and injury on all six Lanham Act claims. Numerous emails indicating GNI was aware its products were not compliant with the Dietary Supplement Health and Education Act of 1994 (an amendment to the FDC Act), an expert’s recall evidence concerning the safety of GNI’s products, and GNI’s statements that Novedex is “natural” and its ingredients are “naturally occurring and are found in natural foodstuffs,” created triable issues of falsity.

ThermoLife also pointed to GNI’s survey results, an expert’s survey results and Internet message board posts, all of which indicated that the safety, legality and natural ingredients of GNI’s products were—to varying degrees—important factors in consumer purchasing decisions. This, according to the appellate court, established a triable issue of materiality.

Lastly, the appellate court concluded that there is a triable issue on injury because: (1) GNI did not dispute it directly competed with ThermoLife in the market for testosterone booster products; and (2) GNI’s literally false statements necessarily misled consumers. ThermoLife consequently established a presumption of commercial injury.

The case is No. 14-15180.

Attorneys: Gregory Blain Collins (Kercsmar & Feltus PLLC) for ThermoLife International, LLC. Robert Itri (Millagan Lawless, PC) for Gaspari Nutrition Inc.

Companies: ThermoLife International, LLC; Gaspari Nutrition Inc.

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