Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Claim against HGH supplement seller alleged only lack of substantiation, (Nov 7, 2014)

By Greg Hammond, J.D.

A consumer failed to state sufficient false advertising claims against a distributor and seller of the alleged human growth hormone (HGH) boosting supplement—Growth Factor-9. The federal district court in San Francisco granted the sellers’ motion to dismiss, finding that the consumer’s allegations only amounted to substantiation claims, which are not subject to a private right of action under the California Unfair Competition Law and Consumer Legal Remedies Act (Engel v. Novex Biotech LLC, November 6, 2014, James, M.).

Novex Biotech, LLC distributes, markets, and sells Growth Factor-9, and GNC Corp. promoted, marketed, and sold the supplement to consumers nationwide. Consumer Julian Engel filed suit against both companies, alleging that he saw various advertisements that were reaffirmed on the product’s labels and in-store advertisements, including: (1) that the supplement provides a 682 percent mean increase in HGH levels; (2) that the supplement is clinically tested; and (3) that a recent clinical trial supports the growth hormone representations. Engel brought claims under California’s Unfair Competition Law and Consumer Legal Remedies Act, and both Novex and GNC moved to dismiss.

In support of their motion to dismiss, Novex and GNC argued that Engel brought only substantiation claims, for which there is no available private right of action. The court agreed with the companies, finding that Engel’s argument that the defendants misrepresented that their HGH benefit representation was supported by clinical testing when it was not, “perfectly describes a substantiation claim.”

Although the court granted the defendants’ motion to dismiss, it also allowed Engel to amend his complaint, noting that he must allege facts from which the court can conclude that the companies’ advertising representations were false. Specifically, the court noted that Engel could allege: (1) that one or more authorities actually studied or tested the formula Growth Factor-9 contains and found that it does not produce a 682 percent mean increase in HGH levels; (2) that Engel himself did not experience such an increase when using the product; or (3) that a study exists demonstrating that the 682 percent increase is categorically impossible to achieve in an over-the-counter pill.

The case number is 14-cv-03457-MEJ.

Attorneys: Manfred Patrick Muecke (Bonnett, Fairbourn, Friedman, & Balint, PC) for Julian Engel. Christopher B. Sullivan (Price Parkinson and Kerr) and Jeremy Noah Lateiner (Morgan Lewis and Bockius LLP) for Novex Biotech LLC and GNC Corp.

Companies: Novex Biotech LLC; GNC Corp.

Cases: Advertising StateUnfairTradePractices CaliforniaNews