Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Cal.: Daily vitamin producer continues to face false representation claims, (Jan 4, 2016)

By Greg Hammond, J.D.

Two California consumers may proceed with claims that the producer of daily multivitamins falsely represented that its products are entirely or largely from whole food sources, when they are also derived from synthetic sources. Although the claims were limited to products the consumers actually purchased, the court concluded that the false advertising claims were not expressly or impliedly preempted by the Food, Drug and Cosmetic Act (FDC Act) and the plaintiffs pleaded their “whole foods” claims with sufficient particularity (Holt v. Foodstate, Inc., December 31, 2015, Lorenz, M.).

Foodstate, Inc. produces health supplements including the multivitamin products One Daily Multivitamin and Men’s One Daily. Two consumers claim that Foodstate violated California’s False Advertising Law, Sherman Law, and Unfair Competition Law by: (1) falsely representing that its products are entirely or largely from whole food sources, when they are also derived from synthetic sources; and (2) adding “magnesium stearate, calcium stearate, or any other stearate/stearic acid” that may be harmful and undesirable to consumers, but not listing those ingredients on its vitamin labels. Foodstate moved to dismiss.

Unpurchased products. The court first granted the motion to dismiss with regard to 107 additional products that the two consumers did not purchase. Specifically, the court found that, although there is some overlap of ingredients in some of the products, the consumers failed to show that there is substantial similarity among all of the 109 products. In addition, the packaging was found to be significantly different.

Preemption. The motion to dismiss, however, was denied on preemption grounds. The court determined that: (1) state law claims predicated on the basis that a product’s labels are either false or misleading are not expressly preempted by the FDC Act and (2) the preemption provisions added to the FDC Act by the Nutrition Labeling and Education Act include an express savings clause that rejects any implied preemption.

Sufficiency of pleadings. Next, the court determined that the consumers’ claims that the two products contain magnesium stearate, calcium stearate, or any other stearate or stearic acid failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b) because the statement, “or any other Stearate/Stearic Acid,” does not give requisite notice to Foodstate in order to defend claims against it. Nevertheless, the consumers’ claims that Foodstate misrepresented the whole food content of its products were pleaded with sufficient particularity, the court decided. The consumers alleged facts that the products do not contain vitamins and minerals strictly from whole food sources, that they were misinformed on multiple occasions, and that synthetic or processed nutrients were added to Foodstate’s products.

The case is No. 15cv78 L (JMA).

Attorneys: Abbas Kazerounian (Kazerounian Law Group, APC) for Kathleen Holt. Truc T. Do (Jones Day) for Foodstate, Inc.

Companies: Foodstate, Inc.

Cases: Advertising CaliforniaNews