Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Cal.: Consumer inadequately pleads standing in Elations health supplement case, (Aug 6, 2014)

By Greg Hammond, J.D.

A consumer of Elations Company, LLC’s health supplements, which allegedly improve joint health, has insufficiently pleaded standing to bring false advertising claims under California’s Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL). In granting Elations’ motion to dismiss, the federal district court in San Diego determined that the consumer failed to allege that he relied on any representations on Elations’ website, online materials, or the company’s commercials (Murray v. The Elations Company, LLC, August 4, 2014, Bashant, C.).

Background. William Murray, Jr. purchased glucosamine- and chondroitin-based health supplements from Elations, which purportedly provides consumers with health benefits focused on improving joint health, flexibility, lubrication, and mobility. Murray alleged that he used Elation’s health supplements for roughly two years and relied on the product’s labels, but never experienced the intended, advertised benefits. Consequently, Murray filed suit against Elations, alleging that there is no competent scientific evidence that taking glucosamine and chondroitin can provide the advertised joint-health and cartilage benefits. He asserted—in part—violations of the CLRA and the UCL, and Elations moved to dismiss.

UCL and CLRA claims. In support of its motion to dismiss, Elations argued that Murray’s UCL and CLRA claims do not plausibly plead that the statements in the company’s advertising are false. Specifically, Elations argued that Murray failed to link the results of scientific studies he cited in his complaint to confirm that representations made on Elations product labels were false and misleading with the company’s advertisements. The court partially agreed with Elations, finding that Murray failed to allege facts to support the conclusion that Elations does not deliver the benefits of healthier joints, reducing pain, or improving joint comfort and flexibility to consumers. However, it did find that Murray stated sufficient facts to support the conclusion that Elations’ representations regarding the renewal of joint cartilage are false and misleading.

Standing. To establish standing under the UCL, Murray was required to: (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, and (2) show that the economic injury was the result of, or caused by, the unfair business practice or false advertising. However, Murray was unable to show that his injury was caused by Elations’ allegedly false advertising. Specifically, the court reasoned that, although he plausibly alleged that various statements on Elations’ website and television commercials were false and misleading, he failed to allege that he was exposed to and relied on the company’s website, commercials, or any other long-term advertising campaign. Consequently his UCL and CLRA claims were dismissed, and he was granted leave to amend.

The case number is 13-cv-02357-BAS(WVG).

Attorneys: James Richard Patterson (Patterson Law Group, APC) for William Murray, Jr. Paul Lyman Seeley (Sheppard, Mullin, Richter & Hampton LLP) for The Elations Co., LLC.

Companies: The Elations Co., LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews