Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Issue preclusion partially granted in ‘Joint Juice’ case, (May 15, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

Jury findings in companion previous case asserting New York law causes of action served as basis for collateral estoppel on some issues.

In litigation over false advertising and misleading labeling of a line of health supplement drinks, a federal district court judge in San Francisco, California has partially granted a motion by an Illinois law-based class action plaintiff to preclude relitigating some issues determined by a jury in a related case invoking New York laws and affirmed on appeal. Collateral estoppel was granted on the issues of a deceptive act or practice and a course of conduct in trade or commerce, with limited issue preclusion on the issue of the measure of harm caused. Collateral estoppel was denied on the issues of intent and causation. The defendant drink manufacturer was also estopped from asserting a First Amendment commercial speech rights defense. In closing, the judge noted that in this decade-long litigation, the parties "have amassed more than sufficient points of information with which to negotiate an end to these actions" and urged them to do so (Dent v. Premier Nutrition Corp., No. 3:16-cv-06721-RS (N.D. Cal. May. 2, 2025)).

Background. Scientific studies have questioned the actual efficacy of glucosamine and chondroitin as remedies for arthritis and related ailments. The Premier Nutrition Corp. (Premier) manufactured and marketed several varieties of a dietary supplement drink called Joint Juice® that contain glucosamine and chondroitin. Several putative class action lawsuits were filed against Premier, alleging that Premier's promotion and labeling of its Joint Juice® product line was false and misleading. After certification of a national class was denied, nine separate class action lawsuits were filed by the same counsel in the Northern District of California, each with a class representative from a different state asserting causes of action under the respective state's common law and statutes.

One of those lawsuits, which asserted causes of action under New York's state consumer laws [Montera v. Premier Nutrition Corporation, case No. 3:16-cv-06980 (N.D. Cal.)], was selected as a bellwether case. The Montera plaintiff prevailed in a district court jury trial, and district court’s judgment was affirmed on appeal on all issues except the calculation of expenses and attorney fees. The Montera case is effectively a win for affected New York consumers (although Premier's counsel has petitioned the U.S. Supreme Court for certiorari on the issue of whether the Ninth Circuit should have requested New York's Court of Appeals to certify questions of New York law [Montera v. Premier. Nutrition Corp., 111 F.4th 1018 (9th Cir. 2024), petition for cert. filed (U.S., March 17, 2025 (No. 24-999)]).

After the Montera case was affirmed by the Ninth Circuit, the remaining cases were reactivated. Per an agreement of counsel, Premier selected, to continue the combined litigation, the case brought by Sandra Dent on behalf of the class asserting claims under Illinois law. Dent's counsel moved to preclude the relitigation of issues decided against Premier in the Montera case. Premier's counsel opposed the motion.

Issue preclusion-deceptive act or practice. The court granted Dent's motion to preclude argument on the issue of deceptive act or practice. New York's standard under its relevant consumer laws [N.Y. Gen. Bus. L. §§ 349 and 350] is the act or practice's likelihood "to mislead a reasonable consumer acting reasonably under the circumstances," and the Montera jury was instructed accordingly. The Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) [815 ILCS 505/1 et seq.] entails the same standard.

Issue preclusion-intent. The court denied Dent's motion to preclude argument on the issue of Premier's intent behind its marketing and labeling practices. Under ICFA, "intent means the defendant intended for plaintiff to rely on the alleged deceptive act or practice." The Montera jury did not consider the issue of intent, so the intent issue was not identical and the Montera verdict could therefore not be used to preclude arguments regarding the intent issue.

Issue preclusion-conduct in trade or commerce. The court granted Dent's motion to preclude argument on the issue of whether Premier's practices were done in the course of conduct in trade or commerce. Here, Premier did not dispute that its advertising and labeling a practice in trade or commerce, and the New York and Illinois statutes each have a conduct in trade or commerce requisite.

Issue preclusion-causation. The court denied Dent's motion to preclude argument on the issue of causation. Here, Dent conceded that she and similarly situated consumers would need to prove individual causation. As strong as her evidence of material factors that caused harm appears at this point, these were not demonstrated in the Montera case. Similarly, the measure of harm factor as instructed to the Montera jury was dissimilar to what Dent needs to prove; her motion to preclude was granted only to the extent of number of units sold, purchase price, and punitive damages.

The Case is No. 3:16-cv-06721-RS.

Judge: Seeborg, R.

Attorneys: Timothy G. Blood (Blood Hurst & O'Reardon, LLP) for Sandra Dent. Aaron Van Oort (Faegre Drinker Biddle & Reath LLP) for Premier Nutrition Corp.

Companies: Premier Nutrition Corp.

Cases: Advertising StateUnfairTradePractices CaliforniaNews