“The claims on your product’s label lack substantiation” versus “the claims on your product’s label are false and misleading.” In jurisdictions like California, where only the second of these two allegations is actionable by private plaintiffs under state consumer protection laws, what standards do courts employ to distinguish the two? On August 23, 2017, Judge Bencivengo of the Southern District of California boldly weighed in on this question and granted summary judgment to Defendants NBTY, Inc. and Costco Wholesale Corporation, which manufactured and sold, respectively, TrueNature Gingko Biloba with Vinpocetine (“TrueNature Gingko”), the subject of a consumer fraud class action based on allegedly false and misleading labeling claims regarding the product’s ability to support alertness and memory and help with mental clarity. Korolshteyn v. Costco Wholesale Corp., No. 3:15-CV-709-CAB-RBB, 2017 WL 3622226, at *1 (S.D. Cal. Aug. 23, 2017).
Plaintiffs, a certified class of purchasers of TrueNature Gingko in California, asserted claims for violation of California’s unfair competition law (the “UCL”) and California’s Consumer Legal Remedies Act (“CLRA”). The parties’ arguments on summary judgment turned largely on what plaintiffs are required to prove to succeed on false advertising claims under the UCL and CLRA. Both statutes prohibit advertising which is actually false as well as advertising which is literally true but likely to mislead a reasonable consumer. Both statutes place the burden on the plaintiff to prove that defendant’s advertising is false or misleading. See id. at *2-3. Importantly, under California law, only prosecuting authorities, and not private plaintiffs, are authorized to demand substantiation for advertising claims. Id. at *3. For instance, under the federal Dietary Supplement Health and Education Act of 1994, which falls under the FDA’s enforcement authority, manufacturers of dietary supplements are required to have substantiation that the claim is truthful and not misleading (see, e.g., FDA Regulation Guidance). Private plaintiffs, however, cannot bring claims under California consumer protection laws for “lack of substantiation.”
As demonstrated by the body of case law on the issue, drawing the line between allegations of false or misleading, as opposed to merely unsubstantiated, advertising claims is not always straightforward. The specific question before the court was “how or whether a plaintiff can prove falsity when a defendant offers scientific evidence and admissible expert testimony supporting an advertising claim about the efficacy of the product in question.” 2017 WL 3622226, at *3. The court noted that there was no controlling Ninth Circuit authority on the issue and inconsistent application and interpretation of the law among other courts. Id.
Plaintiffs relied primary on Mullins v. Premier Nutrition Corp., 178 F. Supp. 3d 867 (N.D. Cal. 2016), where the court denied summary judgment and held that a plaintiff who alleges advertising claims are false and misleading has “two lines of attack”: prove that the claims are (1) “literally false if a reasonable jury concludes that all reasonable scientists agree, or (2) “misleading by showing that the vast weight of the competent evidence establishes that those health claims are false.” Id. at 894-95. Under the second line of attack, the existence of scientific studies substantiating defendant’s advertising claims does not defeat plaintiff’s claim if plaintiff can establish that those studies are “poorly designed, incredible, or represent the view of a minority of scientists.” Id. at 895. The court noted that other district courts have reached the opposite conclusion—holding that inconclusive, unsettled, and equivocal scientific evidence (i.e., studies both supporting and refuting the efficacy of a product) is not enough to prove—or even raise an issue of fact—on the issue of falsity. See Reed v. NBTY, Inc., No. EDCV 13-0142 JGB (OPx), 2014 WL 12284044, at *14 (C.D. Cal. Nov. 18, 2014); Sonner v. Schwabe N. Am., Inc., 2017 WL 474106, at *7, __ F. Supp. 3d __ (C.D. Cal. Feb. 2, 2017).
The court reasoned that the “common thread” in the various cases is that “when a defendant presents scientific studies supporting its advertising claim, a plaintiff must do more than present its own studies that do not support the advertising claim, thereby demonstrating that evidence is equivocal.” 2017 WL 3622226, at *5. To the extent Mullins reserved the question of whether evidence is equivocal for the jury, the court rejected it as an “outlier.” Id. It also rejected the suggestion in Mullins that labeling claims can be misleading or deceptive because there is insufficient evidence supporting them or because the contradictory evidence is stronger:
“In sum, when a plaintiff presents admissible expert testimony that scientific studies do not support an advertised claim, and a defendant presents admissible expert testimony that scientific studies support the advertised claim, the evidence is equivocal and all reasonable scientists do not agree…In such a circumstance summary judgment is appropriate. To hold otherwise would require a defendant to affirmatively prove the truth of, i.e., substantiate, its advertising claims to avoid liability for false advertising, which a private plaintiff is not allowed to require.” Id. at *6.
The court went on to deny plaintiffs’ motion to exclude two defense experts who opined that the scientific literature supported the claims regarding healthy brain function on the TrueNature Gingko label. Id. at *10-12. Based on the standard articulated above, because the court found that defendants offered admissible evidence of scientific studies supporting the label claims, it granted summary judgment. Id. at *13.
Judge Bencivengo’s opinion is significant for its clarity and decisiveness in an area plagued by ambiguity and inconsistency, and only time will tell whether and which courts follow suit. The holding in this case offers valuable predictability to defendants, who can proceed knowing that if they present admissible expert testimony in support of their labelling claims, counter-studies or arguments about the reliability or quality of defendants’ studies—which are inevitably offered by plaintiffs in nearly every case—will be insufficient to raise an issue of fact and defeat summary judgment. In jurisdictions like California where “lack of substantiation” claims are reserved for the regulatory authorities, this standard makes sense. Otherwise, the distinction between “the claims on your product’s label lack substantiation” and “the claims on your product’s label are false and misleading” lacks any practical difference.