Antitrust Law Daily Wrap Up, ADVERTISING—SDCal: Consumer’s False Advertising, Unfair Competition Claims Against Dietary Supplement Marketer Not Sufficiently Stated, (Oct 31, 2012)

By E. Darius Sturmer, J.D.

The manufacturer and marketer of a dietary supplement product purporting to be a powerful stimulant and appetite suppressor was entitled to dismissal of a consumer’s claims that the company—SEI Pharmaceuticals, Inc.—violated California’s false advertising laws, unfair competition laws, and Consumer Legal Remedies Act, the federal district court in San Diego has decided (Velasco v. SEI Pharmaceuticals, Inc., October 28, 2012, Hayes, W.). The consumer failed to plead his claims of false advertisement and unlawful misrepresentations with the required specificity under Federal Rules of Civil Procedure 8(a) and 9(b), the court found.

According to the complaint, the product at issue—MethylHex 4,2—contains a synthetic form of Dimethylamylamine (“DMAA”) that is both illegal and dangerous, and the company has advertised misleadingly and falsely by failing to mention the risks associated with it. Because the claims were based on allegations of fraudulent omissions and misrepresentations committed by SEI, the court noted, Rule 9(b) pleading requirements applied to the claims.

The complaint did not satisfy the Rule 9(b) standard. The plaintiffs failed to state the time, place, and specific content of the false representations or to plead facts explaining why the statement was false when it was made, the court said. Further, the plaintiff neglected to specifically identify “the who, what, where, and how of the misconduct” charged and did not state with particularity the circumstances constituting fraud or mistake. Absent this particular information, SEI did not receive proper notice of the claims or the grounds for the claims alleged in the complaint, the court concluded.

The case is No. 12cv1060 WQH (MDD).

Amir D. Benakote (Kirtland & Packard LLP) for Anthony Velasco. Paul William Smigliani (Munro Smigliani & Jordan) for SEI Pharmaceuticals, Inc.

Cases: Advertising StateUnfairTradePractices ConsumerProtection CaliforniaNews