Publications
Brand Protection & Advertising

Stay ADvised: What's New This Week, January 13

By Marc Roth, Nancy J. Felsten, and Robert J. Driscoll
01.15.20
Print this page

Articles

NYC District Court Enjoins Supplement Sellers Following DOJ Complaint

A New York federal district court has approved a consent decree permanently enjoining manufacturers of a dietary supplement from distributing adulterated and misbranded versions of their product. The order settles a Department of Justice (DOJ) complaint alleging violations of the Federal Food, Drug and Cosmetic Act (Act).

The DOJ’s complaint was filed at the FDA’s request in November of 2019. It alleged that ABH Nature’s Products, Inc.; ABH Pharma, Inc.; StockNutra.com, Inc. (collectively, ABH), and their principal Mohammed Jahirul Islam sold adulterated and misbranded supplements to the public.

According to the allegations, ABH manufactured and distributed dietary supplements and marketed them to treat a plethora of health ailments, including heart disease, cancer and HIV/AIDS. This constituted a sale of unapproved and misbranded “new drugs”— drugs sold for a purpose not approved by the FDA—in violation of the Act, argued the DOJ.

“[T]he FDA had not approved those products for such purported uses, nor were there any published adequate and well-controlled investigations showing that such products are generally recognized as safe and effective for any use,” noted the DOJ in its press release announcing the injunction, placing the supplements squarely in the category of misbranded drugs.

The complaint further accused ABH of failing to meet Good Manufacturing Practice regulations promulgated by the FDA, often resulting in products with substandard purity, strength, and composition, and charged that the company lacked a proper system for reviewing and investigating customer complaints.

The injunction requires the company to destroy all the misbranded supplements within 15 days from entry of the consent decree. The defendants are further barred from manufacturing or distributing dietary supplements until they implement certain safety measures, including hiring an independent inspector of their facility to certify that ABH is abiding by “good manufacturing practices.” The injunction additionally obligates ABH to hire an expert to review and certify that supplements are labeled lawfully going forward.

Key Takeaways

Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs, succinctly summarized the relevant lesson for companies in the supplement space: “Manufacturers of products labeled as dietary supplements have an obligation to evaluate the safety and labeling to ensure their products are manufactured correctly to meet all federal requirements and are not misleading to consumers,” she said. “Americans expect and deserve products that meet appropriate standards, and the FDA remains committed to taking action against companies and owners who place the health of American consumers at risk,” she added. In other words, the FDA will pursue companies that sell mislabeled supplements, including by enlisting the help of the DOJ.

NARB Backs NAD on Health and Environmental Claims

The National Advertising Review Board (NARB) upheld a recommendation of the National Advertising Division (NAD) that a manufacturer of spirulina tablets discontinue making certain unsupported health and environmental claims about its product.

ENERGYbits sells supplements called Spirulina Algae, tablets made almost exclusively with spirulina algae, a currently trendy ingredient touted as a superfood among health food enthusiasts.

The company appeared on NAD’s radar as part of the organization’s routine monitoring program of national advertising. After contacting the company and reviewing its claims and purported substantiation, NAD ultimately concluded the claims were unsupported. The advertiser appealed the decision to the NARB.

The first claim at issue implied that consuming the tablets would help repair the ozone layer. “Want to help repair the ozone layer? Eat our algae tabs!” ENERGYbits’ ads declared. NAD concluded that this claim was unsupported and the NARB agreed. “At best,” NAD determined, the claim “vastly overstates any possible environmental benefit and is not properly supported.” The NARB upheld NAD’s recommendation that the company discontinue this claim.

Health claims about the product were problematic as well, found the NARB. ENERGYbits’ marketing claimed that its spirulina tablet “helps improve mental focus,” “helps reduce brain fog,” “helps improve skin, hair, nails, bones, and eye health,” and “helps improve mood.” These claims were unsupported, concluded NAD, and the NARB again agreed.

ENERGYbits had provided no studies in support of this claim, and since “the only acceptable evidence” in support of these types of health claims would be “well-controlled human clinical studies,” ENERGYbits could not argue that these claims were supported.

Key Takeaways

As we see often here, appeals from NAD to the NARB usually involve a detailed analysis of specific aspects of evidence proffered by advertisers in support of a claim and a determination of whether it adequately supports the claim. Here, it appears the advertiser did not provide any supporting evidence for its claims. The lesson for advertisers here is NAD 101: at the very least, provide NAD and NARB with “well controlled human clinical studies” if seeking to substantiate a health claim.

Further, this matter is another example of today’s landscape of enforcement actions against companies marketing health supplements. Whether it be NAD pursuing supplement marketers via its routine monitoring work, as here, the FDA and DOJ targeting supplement marketers over Food Drug & Cosmetic Act violations, or the many FTC enforcement actions we’ve seen in this area, companies should take note. While the health supplement market is huge, so is the enforcement effort against companies seeking to take advantage of consumer demand for these products. The same goes for companies advertising consumer goods as healthful and natural, as the next several matters below illustrate.

Diet Dr Pepper Not Deceptively Advertising Weight Loss, Finds 9th Circuit

What’s in a name? The 9th Circuit Court of Appeals has affirmed a lower court ruling that the maker of Diet Dr Pepper did not engage in deceptive advertising in violation of California law by using the word “diet” in the product’s name and marketing.

In a unanimous decision, the three-judge appeals panel held that the use of the word “diet” to describe the reduced-calorie drink was not deceptive marketing since the reasonable consumer would not interpret the word “diet” in a brand name to imply a promise of any weight loss or health benefits.

Plaintiff Shana Becerra of Santa Rosa, California, filed the proposed class action suit in October 2017, alleging that the maker of Dr Pepper violated the California False Advertising law and other California consumer laws. Becerra’s complaint alleged that the “prominent” appearance of the word “diet” on the soft drink would lead consumers to “reasonably believe that the product will assist in weight loss, or at least healthy weight management, for example, by not causing weight gain.”

Becerra claimed that she had purchased and consumed Diet Dr Pepper for over 13 years under the impression that the drink would help her manage her weight because of the use of the word “diet” in the name. Adding insult to injury, she claimed that the sugar alternative contained in the drink – the artificial sweetener aspartame – actually caused her to gain weight.

The district court granted Dr Pepper’s motion to dismiss, finding that “no reasonable consumer would assume that Diet Dr Pepper’s use of the term ‘diet’ in a soft drink’s brand name promises weight loss or healthy weight management” and that plaintiff had failed to properly allege that the aspartame contained in Diet Dr Pepper caused her weight gain.

In addition to siding with the lower court, the 9th Circuit also noted the word “diet” is intended as a “relative” comparison to the full-calorie regular drink. Reasonable consumers would understand the word “diet” to be a “relative claim about the calorie or sugar content of the product.”

The appeals panel found unavailing plaintiff’s arguments citing the dictionary definition of the word “diet” and online articles in support of her contention that diet connotes weight loss. It also noted that Diet Dr Pepper ads cited by plaintiff “make no reference to weight loss or other health benefits” and that the ads merely market the diet drink as tasting more like “regular” Dr Pepper.

Key Takeaways

While some courts have held that particular words in product names can suggest, either expressly or by implication, that the product has certain performance attributes, this case and similar cases in the 9th Circuit put to rest the notion that using the word “diet” in marketing soft drinks means weight loss. The 2nd Circuit has upheld similar dismissals in cases against Dr Pepper, Coca-Cola and Pepsi.

Class Action Suit Filed Against Trader Joe’s Over Cane Juice in Corn Flakes

A proposed class action suit has been filed against Trader Joe’s accusing the popular supermarket chain of deceiving consumers about the nature of the ingredients in its Organic Corn Flakes product.

The suit, filed by plaintiff Jennifer Lopez-Barnett, alleges that Trader Joe’s misleads consumers when marketing its Organic Corn Flakes by disguising sugar as “evaporated cane juice” in the ingredients list.

By using the name “evaporated cane juice,” a synonym for sugar, rather than the word “sugar” on the ingredients list, plaintiffs allege that Trader Joe’s is misleading consumers into thinking that the ingredient is not sugar but rather a fruit juice, with all the healthful connotations generally associated with juice.

Plaintiffs claim the misleading nature of this marketing is amplified because Trader Joe’s advertises the cereal as a healthy option, including by touting other healthy features of the cereal such as that it is fat free, an excellent source of B vitamins, and contains two grams of sugar. Further, the front panel of the cereal package features pictures of fresh fruit. Trader Joe’s reputation as a supermarket for healthy foods also adds to the impression that “evaporated cane juice” is a healthy fruit juice and not another word for sugar.

“By declaring ‘sugar’ by a term which fails to truthfully and non-deceptively describe the source, function and qualities of the ingredient, reasonable consumers are deceived into purchasing a product with added sugar as its second most predominant ingredient,” argue plaintiffs. “This results in the impression that the Products are a better nutritional choice than other comparable products which truthfully and non-deceptively identify ‘sugar’ as their second most predominant ingredient,” adds the complaint.

Worse, plaintiffs allege that since the misleading statements have contributed to consumers’ positive perception of the product as healthy, they have led consumers to pay a premium price for the corn flakes predicated on this misleading information.

The complaint seeks injunctive relief to compel Trade Joe’s to change the allegedly misleading ingredient name, as well as damages and costs.

Key Takeaways

This case is not the first time Trader Joe’s has been accused of deceiving consumers about the healthfulness of its products. No fewer than seven lawsuits – all alleging some type of deceptive marketing – claim the company’s products are healthier than they actually are were filed in 2019 alone.

Class Action Filed Against Tom’s of Maine Over "Natural" Claims

Trader Joe’s is not the only company being targeted for allegedly claiming its products are not quite as natural as they appear. A proposed class action lawsuit in Massachusetts alleges that marketing for Tom’s of Maine (Tom’s) toothpaste as “natural” is deceptive.

The complaint, filed in Massachusetts District Court, accuses Tom’s and its parent Colgate-Palmolive for engaging in “deceptive, falsely, and misleadingly” marketing to promote their toothpaste and deodorant as natural when the products actually contain a number of ingredients that do not meet that description. The complaint alleges violations of the state’s unfair and deceptive practices laws.

Plaintiff Angela Munsell purchased Tom’s Cinnamon Clove and Sweet Mint toothpaste and Tom’s deodorant at what she alleges is a premium price, due to the perception generated by the defendants’ marketing that the toothpaste and deodorant are natural.

In her complaint, Munsell claims that defendants marketed the products as natural to capitalize on the large market for natural goods, which plaintiffs claim is worth over three billion dollars and steadily growing. The allegations accuse Tom’s of a “widespread marketing strategy” calculated to convince customers that Tom’s is natural when it is not.

For example, the company allegedly spent millions of dollars marketing Tom’s, including on social media, television and on internet ads. Product labels also all feature the word “natural” prominently, allege plaintiffs.

Yet the products contain artificial and chemically processed ingredients, alleges the complaint, including “glycerin, glyceryl laurate, propelyne glycol, ascorbic acid, and aluminum chlorohydrate.”

The result of this deceptive marketing, according to the allegations, is that plaintiff and other similarly situated individuals were misled into paying a premium for a product based on deceptive marketing representations.

Plaintiff seek damages for affected class members—from Massachusetts and Rhode Island—who purchased Tom’s products, and appropriate equitable relief.

For its part, the defendants’ public stance on these and similar allegations is that its products are and have been natural since the company started out 1970, and that in the absence of any definitive regulatory definition of the term by the Federal Trade Commission or the Food and Drug Administration, its practices are perfectly legal.

Key Takeaways

This action continues the trend of lawsuits targeting companies that market their products as natural, which are based largely on the high value placed on – and premium prices charged for – these products. And this isn’t Tom’s first rodeo on these issues as it has been sued before—and has settled—several cases asserting the same types of false advertising claims.

Related Articles