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From Health Law Daily, February 15, 2019

Preemption prohibits state law claims in consumer's dietary supplements action

By Vanessa M. Cross, J.D., LL.M.

A consumer protection action was brought by four individuals – residents of Florida, Missouri, Tennessee, and Wisconsin – seeking to represent a nationwide class of consumers who purchased glucosamine dietary supplements from Wal-Mart Stores, Inc. (Wal-Mart).

A federal district court in Missouri granted, in part, Wal-Mart's motion to dismiss, but granted the consumers leave to amend all claims except Florida and Missouri state law claims for deceptive labeling. The court held that, pursuant to Fed. R Civ. P. 12(b)(6), the consumers did not state a plausible Magnuson-Moss Warranty Act (MMWA) claim to survive Wal-Mart's motion to dismiss. State-law claims were preempted to the extent they seek to impose liability based on Wal-Mart's allegedly misleading label for the glucosamine supplements (Parker v. Wal-Mart Stores, Inc., February 12, 2019, Ross, J.).

Background. After purchasing glucosamine dietary supplements at Wal-Mart, consumers asserted its label lists glucosamine sulfate as an ingredient "when in fact the supplements contain glucoasamine hydrochloride and potassium sulfate, less expensive ingredients with no proven efficacy" in treating their joint pain. The consumers further asserted that Wal-Mart had knowledge of the ineffectiveness of glucosamine hydrocholoride for the treatment of osteoarthritis and should have known that its representations regarding the supplements it sold were false or deceptive. As a result, they sought monetary damages as well as declaratory and injunctive relief under seven claims, including breach of warranties and unjust enrichment, among others. In its motion to dismiss, Wal-Mart argued that these claims were all subject to dismissal because they were preempted by federal law or fail on their merits. Wal-Mart added that the consumers lack standing to seek equitable relief.

Preemption. Wal-Mart argued that plaintiffs' state-law claims are preempted by federal law. Specifically, the labeling of dietary supplements is governed by the Nutrition Labeling and Education Act (P.L. 101-585) (NLEA) provision of the federal Food, Drug, and Cosmetic Act (FDC Act). The FDC Act classifies dietary supplements as "food," defined as "articles for food or drink for man or other animals." State laws are preempted where they neither directly nor indirectly establish nutrition labeling of food requirements identical to the NLEA or to the extent they attempt to add additional requirements beyond those required by the NLEA.

Upon holding the preemption applied to the consumers' claims, the court premised each of the allegations on NLEA standards and granted Wal-Mart's motion to dismiss for failure to allege a necessary element. The court held that the consumers failed to assert the FDC Act's scientific-testing standard that the food at issue does not meet the labeling requirements when subjected to the twelve-sample FDCA protocol.

Breach of warranty. The court dismissed the breach-of-warranty claim under the MMWA without prejudice. It held that the consumers failed to provide Wal-Mart its statutory opportunity to address the alleged defect as required under the MMWA to address the alleged defect. The court rejected the argument that Wal-Mart's alleged knowledge of the defect at the time of the sale relieved it of the opportunity to cure. Each of the state laws raised all imposed an implied warranty of merchantability that goods are "fit for the ordinary purposes" for which they are used. The district court dismissed, without prejudice, each of the state law claims for breach of warranty for failure to allege that Wal-Mart's glucosamine supplements are unfit for human consumption.

Unjust enrichment. The consumers argued that a recovery of damages were warranted under each of their respective states' law on a theory of unjust enrichment. Wal-Mart argued that the Florida action for unjust enrichment should be dismissed because its state law prohibits unjust enrichment claims when a plaintiff has an adequate remedy at law. The court rejected this argument, adopting the Eleventh Circuit's ruling in State Farm Mut. Auto Ins. Co. v. Physicians Injury Care Ctr., Inc. (11th Cir. 2011), which provides that while "[i]t is generally true that equitable remedies are not available under Florida law when adequate legal remedies exist that rule does not apply to unjust enrichment claims."

Deceptive labeling. The consumers alleged that under Florida and Missouri law Wal-Mart's supplements were deceptively labeled. The district court dismissed, with prejudice, these claims based on Wal-Mart's argument that it did not receive the pre-suit notice required under both Florida and Missouri law. The consumers conceded that they failed to provide the required notice.

Injunctive and declaratory relief. Wal-Mart argued that the request for injunctive and declaratory relief should be dismissed because the consumers face no risk of future injury, asserting the argument that constitutional standing requires that parties be subject to "actual or imminent injury" to a legally protected interest. The court rejected this argument, reasoning that the consumers discovered an alleged "unlawful practice does not make the packaging less misleading, nor mean that the practice is not ongoing."

The case is No. 4:18-CV-00465.

Attorneys: Eric S. Johnson (Simmons and Hanly, LLC) for Cynthia Parker. Ann E. Sternhell-Blackwell (Bryan Cave LLP) for Wal-Mart Stores, Inc.

Companies: Wal-Mart Stores, Inc.

MainStory: TopStory CaseDecisions FDCActNews SupplementNews LabelingNews SafetyNews MissouriNews

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