Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ill.: Consumers’ deceptive marketing claims of nutritional supplement fail, (Feb 3, 2016)

By Linda O’Brien, J.D., LL.M.

Two consumers failed to allege sufficient facts to pursue claims against a nutritional supplement manufacturer for deceptively advertising and marketing its pharmaceutical product as lessening inflammation, the federal district court in Chicago has ruled (Baldwin v. Star Scientific, Inc., February 2, 2016, Pallmeyer, R.).

In January 2014, consumers Howard Baldwin and Jerry Van Norman filed suit against pharmaceutical product manufacturer Star Scientific, its subsidiary, Rock Creek Pharmaceuticals, and GNC Holdings for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) and Missouri Merchandising Practices Act (MMPA). Baldwin alleged that the advertising and marketing for Rock Creek’s nutritional supplement Anatabloc was deceptive in that it claimed the product would provide “anti-inflammatory support” and other medical benefits without any evidence that Anatabloc could in fact provide those benefits. The defendants moved to dismiss.

The court determined that the consumers’ ICFA and MMPA claims failed to satisfy the Federal Rule of Civil Procedure 9(b)’s heightened pleading standard for fraud. According to the court, the allegations of the complaint did not identify specific representations made by the defendants. As examples, Baldwin alleged that he viewed Star Scientific investor statements regarding Anatabloc’s ability to treat inflammation but did not identify any specific statement, the content of these statements, or when and where he read them. The complaint also alleged that Baldwin viewed Star Scientific’s website and television commercials advertising Anatabloc; however, he did not identify the particular content of the advertisements.

In two instances, the complaint provided the identity of the person making the alleged misrepresentation, the time, place, and content of the misrepresentation, and the method of communication of the misrepresentation—the Anatabloc packaging and a visit to a GNC store featuring posters marketing Anatabloc for “anti-inflammatory support.” The plaintiffs alleged that, contrary to that claim, the product “did not provide the relief promised” and generally “did not work.” The court noted that a mere conclusion that a product did not work was not presumed true and was insufficient to draw a reasonable inference that the defendants knew that the product did not provide “anti-inflammatory support” and committed fraud by advertising that it could.

Finally, to the extent the plaintiffs’ fraud claim was based on scientific evidence, the complaint identified at least three studies purporting to find that Anatabloc had positive effects on inflammation. The fact that the studies were paid for by Star Scientific did not by itself make the results false. In order to plausibly allege that the defendants’ statements were fraudulent, the plaintiffs were required to identify scientific studies showing that Anatabloc was ineffective at treating inflammation, which they failed to provide. Thus, the complaint was deficient and had to be dismissed, the court concluded.

The case is No. 1:14-cv-00588.

Attorneys: Elizabeth A. Fegan (Hagens Berman Sobol Shapiro LLP) for Howard T. Baldwin. Paul J. Walsen (K&L Gates LLP) for Star Scientific Inc., Rock Creek Pharmaceuticals, Inc., and NC Holdings, Inc.

Companies: Star Scientific Inc.; Rock Creek Pharmaceuticals, Inc.; NC Holdings, Inc.

Cases: Advertising StateUnfairTradePractices IllinoisNews