Antitrust Law Daily Wrap Up, ADVERTISING—D.N.J.: Bayer may be liable for “bloated” probiotics claims, (Nov 12, 2014)

By Jody Coultas, J.D.

Digestive health supplement consumers stated California and Illinois consumer protection law claims against Bayer Healthcare, LLC for misrepresenting the health benefits of its products, the federal district court in Newark has held. However, the court dismissed the consumers’ New Jersey Consumer Fraud Act (NJCFA) claims (In re Bayer Phillips Colon Health Probiotic Sales Practices Litigation, November 6, 2014, Linares, J.).

On the product label and in other advertising, Bayer represented that its Phillips’ Colon Health Probiotic Caps and Phillips’ Colon Health Probiotic + Fiber products contained “3 strains of good bacteria to promote overall digestive health,” and helped “defend against occasional: constipation, diarrhea, [and] gas and bloating.” The claims were allegedly supported by “scientific evidence” that the “probiotic” bacteria in Phillips’ Colon Health supported your “digestive system” and “immune system.”

Consumers alleging that Bayer deceptively misrepresented the health benefits of its products cited a number of studies concluding that there was no cause and effect relationship between the consumption of the three bacteria in Phillips Colon Health and the maintenance of defenses against pathogenic bacteria.

Bayer was granted dismissal of the NJCFA based on a choice of law analysis, according to the court. New Jersey's “most significant relationship” test required the court to look at where the plaintiff acted in reliance upon the defendants' representations; where the plaintiff received the representations; where the defendant made the representations; where the parties were domiciled, maintained a residence, were incorporated, and had a place of business; and where the transaction took place.

Although the representations emanated from Bayer’s headquarters in New Jersey, the other factors weighed in favor of the states in which the consumers lived and purchased the products. Applying the NJCFA would deter wrongful conduct within the state. If the NJCFA were not applied to certain out-of-state consumers, a company based in New Jersey could potentially defraud those consumers but escape the imposition of punitive damages. However, New Jersey’s deterrent interest should not be elevated over other states’ compensatory interests. Therefore, the states where the consumers purchased the products had the most significant relationship to the claims.

The court held that the consumers stated California and Illinois claims against Bayer for allegedly misrepresenting the health benefits of its Phillips’ Colon Health products. The consumers alleged sufficient facts from several scientific sources which, if accepted as true, would show that the advertising claims were false or misleading. Specifically, the complaint cited reports by the European Food Safety Authority that concluded there was no cause and effect relationship between the consumption of the three bacteria in Phillips Colon Health and the maintenance of defenses against pathogenic bacteria.

The case is No. 11-3017 (JLL).

Attorneys: James E. Cecchi (Carella Byrne Cecchi Olstein Brody & Agnello, PC) for Dino Rikos. Lorna A. Dotro (Coughlin Duffy LLP) for Bayer Healthcare, LLC.

Companies: Bayer Healthcare, LLC

Cases: Advertising NewJerseyNews