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From Health Law Daily, May 18, 2018

Dismissal of false labeling suit against Pharmavite’s dietary supplements reversed

By Robert B. Barnett Jr., J.D.

In a consumer’s putative class action asserting that Pharmavite, LLC’s Nature Made Vitamin E dietary supplements contained a false and misleading label about heart health, the Ninth Circuit has reversed a trial court’s dismissal of the case on the ground of Food, Drug, and Cosmetic Act (FDC Act) (21 U.S.C. §301 et seq.) preemption and imposition of more than $84,000 in costs. While it was true that the FDC Act preempts state disease claims, the Ninth Circuit said, this consumer’s complaint also raised a structure/function claim, which the FDC Act does not preempt. In addition, the trial court erred when, in denying the consumer’s motion for class certification, it concluded that it would need to inquire into the motives of each individual class member. And, finally, the trial court erred in awarding the costs of conducting a consumer survey because this was not the type of recoverable costs that the law contemplated (Bradach v. Pharmavite, LLC, May 17, 2018, per curiam).

Background. A consumer sued Pharmavite in California federal district court on the ground that the product’s label violated state law by falsely stating that the product "Helps Maintain a Healthy Heart." A key issue in the case was whether the complaint asserts a structure/function claim, which does not require FDA pre-approval, or a disease claim (that the product can treat or prevent a disease), which requires FDA pre-approval. The FDC Act, as amended by the Nutrition Labeling and Education Act (NLEA), expressly preempts state disease claims but not structure/function claims (21 U.S.C. §343-1(a)(5)). The district court ruled that the consumer lacked standing to assert his state law claims because, in his deposition testimony and responses to interrogatories, he said he believed that the label statement was a disease claim. The court also declined to certify the class, dismissed the case, and awarded Pharmavite $84,862 for costs for a consumer survey it commissioned. The consumer appealed to the Ninth Circuit.

Preemption. The record reveals, the Ninth Circuit said, that the consumer’s claim sounds in both structure/function and disease. The consumer believed that the supplement could both maintain his heart health and prevent heart disease. The claim, therefore, is not preempted to the extent that it seeks damages for allegedly false claims that the product could maintain his heart health. Furthermore, he had standing because he suffered an injury by buying a product that he otherwise would not have bought had he known the truth about the product. Dismissing the case for lack of standing, therefore, was error.

Class certification. The consumer’s class certification motion was denied because he was deemed not to be a member of the class because he lacked standing. Given that the Ninth Circuit has ruled that in fact he did have standing, the trial court’s ruling was in error. Also, the trial court ruled that the request for certification failed the elements for establishing a class because determining whether each class member’s claim was a structure/function claim or a disease claim would be too difficult. The standard in California for these types of claims, however, is whether members of the public are likely to be deceived. Courts are not required to inquire into individual class member motives. The Ninth Circuit, therefore, remanded to the lower court for reconsideration of the class certification request.

Costs. Fees are permitted, under 28 U.S.C. §1920(4), "only for the physical preparation and duplication of documents, not the intellectual effort involved in their production." In awarding fees, the trial court never considered §1920. If it had, it would not have allowed fees for the intellectual effort in producing the survey. As a result, the Ninth Circuit said, the trial court erred in allowing the recovery.

The cases are Nos. 16-56598 and 17-55064.

Attorneys: Nada Djordjevic (Bonnett, Fairbourn, Friedman & Balint, P.C.) for Noah Bradach. Bridget Ahmann (Faegre Baker Daniels LLP) and Juliet Arlene Markowitz (Tatro Tekosky Sadwick LLP) for Pharmavite, LLC.

Companies: Pharmavite, LLC

MainStory: TopStory FDCActNews SupplementNews LabelingNews AlaskaNews ArizonaNews CaliforniaNews HawaiiNews IdahoNews MontanaNews NevadaNews OregonNews WashingtonNews

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