Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—NDCal: Purchaser of Weight Loss Supplement Dexatrim Failed to Plead She Was Misled, (Nov 9, 2012)

By William Zale, J.D.

A purchaser of a Chattem’s Dexatrim weight loss dietary supplement—allegedly labeled as “safe” while containing the dangerous chemical hexavalent chromium—failed to state claims that she was misled under California consumer laws because she did not plead with particularity (1) what level of hexavalent chromium made the product unsafe and (2) reliance on Chattem’s packaging or advertising, the federal district court in San Francisco has ruled (Arroyo v. Chattem, Inc., November 6, 2012, Breyer, C.).

Because the purchaser had already been given a chance to amend her class action complaint, which included claims under the California Unfair Competition Law and Consumers Legal Remedies Act, the court dismissed the case with prejudice.

Because the allegations touched upon all elements of common law fraud, the court applied the requirements of pleading with particularity under Rule 9(c) of the Federal Rules of Civil Procedure. The purchaser alleged that Chattem marketed its Dexatrim products as “safe, healthy, and appropriate for consumption,” despite knowing that they were tainted with hexavalent chromium. She alleged that Chattem actively concealed this information with the intent to induce consumer sales, that she reasonably relied on the misrepresentations of product safety, and that she suffered economic harm from the purchases that resulted.

The allegations failed to satisfy the element of materiality because the purchaser did not plead with the required particularity what level of hexavalent chromium makes Dexatrim Max Complex 7 unsafe, the court held. Many foods and drugs on the market are not one hundred percent safe, and general allegations that a product’s safety is less than one hundred percent do not give rise to a lawsuit for fraud, the court observed.

As to reliance, the purchaser quoted from the packaging and described some of the circumstances surrounding her purchase, but she did not allege that she read the packaging prior to purchasing the product, the court noted. While she described material present in sections of Chattem’s website, nowhere did she allege when, where, or how she was exposed to or accessed this promotion, advertising, or marketing prior to purchase. While alleging that the Centers for Disease Control, Occupational Safety and Health Administration, and the California Office of Environmental Health Hazard Assessment find hexavalent chromium unsafe, nowhere did she allege that she knew about the dangers of hexavalent chromium from these or any other sources prior to purchase.

At oral argument, the purchaser’s attorney conceded that she did not know anything about hexavalent chromium’s dangers prior to purchasing the product, the court said. The purchaser could not show that—even had she read the label—she relied on the absence of hexavalent chromium on it in making her decision to purchase Dexatrim, the court concluded.

The case is No. C 12-2129 CRB.

Benjamin Michael Lopatin (Law Offices of Howard W. Rubinstein, P.A.) for Joanne Arroyo. Michael Kevin Underhill (Shook Hardy & Bacon LLP) for Chattem, Inc.

Cases: Advertising ConsumerProtection StateUnfairTradePractices CaliforniaNews