Dietary supplement class actions in focus: Recent overlap with traditional FDA enforcement

This article provides an overview of class action lawsuits targeting the dietary supplement industry. Recent trends indicate that companies should look beyond regulatory compliance and consider how a “reasonable consumer” would interpret claims in labeling, even claims that comply with FDA requirements. There are also important steps companies can take to prevent these lawsuits, as well as defenses that courts seem increasingly willing to accept. By staying aware of the class action landscape and taking a proactive, holistic approach to labeling, dietary supplement companies will be well prepared and well positioned to fight back.
 
Consumer class actions continue to be a significant risk facing the dietary supplement industry. And as companies try to adapt labeling and marketing practices to stay ahead of that risk, plaintiffs similarly evolve and are quick to come up with novel theories. With labels becoming more streamlined and avoiding obvious “red flag” terms such as “natural,” plaintiffs have started digging deeper for claims that are potentially false or misleading. An interesting theme has emerged from that practice – many allegations are moving into the enforcement space historically occupied by the US Food and Drug Administration (FDA). Although these theories have existed in some shape for a few years, cases in the last year or so indicate they may be moving to center stage. Fortunately, many of these allegations can be avoided by careful attention to FDA regulations and proactive compliance, which includes looking beyond technical compliance and considering how a “reasonable consumer” would view label claims. In addition, courts have been more receptive to a number of legal defenses when a case involves nuanced questions of FDA compliance.
 
FDA compliance and the ‘reasonable consumer’ standard
All 50 states in the US have their own consumer protection laws that prohibit various unfair business and sales practices, including false advertising. Although the laws’ scope and language vary from state to state, the intent is universal: companies cannot use misleading or deceptive advertising or business practices to sell their products. These laws serve as the primary basis for consumer class actions, and nearly all dietary supplement lawsuits today allege a product is somehow advertised in a misleading or deceptive way. A traditional case alleges that a consumer saw an advertising claim, relied on that claim when deciding to purchase a product, and ultimately was injured because the claim was somehow deceptive or misleading.
 
A claim’s meaning is often subjective and can vary from person to person. To cope with this ambiguity, nearly all states use the “reasonable consumer” standard. In California, which is the most frequent forum for dietary supplement class action lawsuits, a claim is likely to deceive when “it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.”¹ New York is another frequent forum, and its courts consider a claim to be misleading “if a reasonable consumer acting reasonably under the circumstances would likely be misled.”² Importantly, the reasonable consumer standard is an objective standard and does not hinge on whether or not the consumer bringing the lawsuit was misled. This assessment is based on what the average consumer would likely take away from a claim, and not “more than a mere possibility that the advertisement might conceivably be misunderstood by some few customers viewing it in an unreasonable manner.”³ It is also important to note that advertisers are responsible for all express and reasonably implied claims.
 
Most dietary supplement class action lawsuits focus solely on whether the “reasonable consumer” is deceived by a claim. And FDA compliance has usually played only a small role, if any, in examining what a reasonable consumer understood a claim to mean. But, as consumer class action theories evolve with changing claims, allegations more frequently intentionally (and sometimes unintentionally) implicate regulatory requirements and policy. Consequently, regulatory compliance is increasingly vital with both defending class actions and proactively managing risk.
 
In some cases, compliance can be a complete bar to a false advertising allegation – there are legal preemption rules that prevent courts from reaching conclusions that contradict FDA requirements or add requirements to FDA’s rules. But recent trends have shown courts may be more willing to examine whether otherwise technically compliant products and claims could nevertheless potentially deceive a reasonable consumer. This can arise in situations in which the context surrounding the claim may change its meaning, or a consumer understands a claim to mean something different than what FDA does. As the line between potentially false advertising class actions and regulatory compliance blurs even further, it is becoming more imperative not only to examine all claims for FDA compliance, but also to consider their context and consumers’ understanding of the claims.
 
State law claims involving FD&C Act violations
Another important trend in these class actions includes those that directly attack compliance violations. Historically, most consumer class actions have been premised solely on deception, and compliance has worked in the background as an argument, or even as a complete defense, that the claim is not deceptive. But now allegations have started delving into the realm of policing violations traditionally left to the FDA. Thus, where noncompliance risk assessments may previously have concerned only FDA enforcement risk, it is now, more than ever, crucial to consider class action risk as well.
 

At first glance, many might assume it is not feasible for class actions to target nuanced regulatory compliance issues. It is well settled that consumers cannot privately enforce Food Drug and Cosmetic (FD&C) Act violations.⁴ Congress gave FDA sole authority to police FD&C Act violations, and consumers have no right to step into FDA’s shoes and bring lawsuits based solely on FD&C Act violations. In addition, FDA compliance provisions can be so detailed and complex it seems highly improbable the average consumer would know enough to understand there is a violation.
 
But in some instances, it is possible for cases to bypass the “reasonable consumer” test and pursue class action lawsuits for technical FDA violations. Some states have unfair competition laws that can be premised on statutory violations, rather than a false or misleading advertising claim. For example, California’s Unfair Competition Law provides consumers a cause of action for almost any regulatory violation, even if the regulation does not expressly permit consumer enforcement.⁵ Recently, plaintiffs’ attorneys have begun to take advantage of those types of laws (commonly called “hooking” statutes), as they allow consumers to “hook” a regulatory violation from one law into becoming an “unlawful” practice they can sue over, even if the underlying violation does not provide them the ability to directly enforce the violation.
 

Importantly, these hooking laws are not carte blanche rights to pursue every regulatory violation. Because the FD&C Act does not authorize private enforcement, courts have almost universally rejected attempts to use a FD&C Act violation as the “unlawful” conduct hook.⁶ Instead, consumer class actions point to state-based food and drug laws as the regulatory violation, because nearly all states have their own “mini” FD&C Acts that include many of the same prohibitions as federal law. Consequently, plaintiffs have asserted their cases are based on the state food and drug law violations, rather than federal law, and some courts have permitted those cases to proceed. Although that may seem like splitting hairs to some, legally, it makes quite the difference. Thus, consumers can frequently pursue class actions against companies for technical FDA noncompliance, without fear of grappling with how “reasonable consumers” are somehow deceived by a nuanced statutory violation.
 

However, consumers have faced a tougher battle when their theories are based on interpretations of FDA rules and policy. When there is not a clear statutory violation based on state law, there may be stronger arguments that a claim is private enforcement of the FD&C Act and therefore nonactionable. And even if a claim is deemed to not be private enforcement, when it directly implicates FD&C Act compliance, it is often more susceptible to other defenses, such as preemption and/or primary jurisdiction. Generally, preemption exists when a consumer class action is seeking to enforce a standard different than, or in addition to, FD&C Act requirements. Relatedly, primary jurisdiction is a policy doctrine that exists when FDA, rather than the court, is in the best position to make a compliance determination. Preemption stops a suit from proceeding further, whereas primary jurisdiction may only pause a suit while the court awaits FDA guidance.
 
As consumer class action lawsuits foray deeper and deeper into FDA regulation, defenses such as private enforcement, preemption, and primary jurisdiction have become more critical. And to be sure, there are also still numerous other procedural defenses available, such as lack of standing and reliance. It is telling that, in recent years, courts have been more willing to side with companies on these arguments – which stands in stark contrast to the dietary supplement litigation landscape a few years ago.
 
Recent class actions implicating FD&C Act compliance
Although FDA compliance analyses have certainly factored in some way in most dietary supplement class actions, recent trends show compliance questions are becoming more fundamental to a case’s viability, defense, and potential outcome. Below are overviews of four traditional FDA compliance areas that have seen spikes in litigation. Although some involve areas in which conventional food products are typically the target, dietary supplements are also vulnerable to these lawsuits – especially as suits against the supplement industry continue to rise.
 
Nutrient content claims
The nuanced realm of nutrient content claims is one area of FDA regulation that has provided frequent fodder for consumer class actions. These suits can be particularly vexing because there are often few arguments surrounding compliance – a claim either does, or does not, comply with FDA regulations.
 
Common targets include claims that fail to meet FDA requirements for bearing the claim, use of undefined nutrient content claims, such as “loaded” or “low carb,” and omission of mandatory disclosures or warnings. It is sometimes confusing how these noncompliant acts somehow deceive reasonable consumers. Arguably, the average person in the grocery aisle is unaware that an “excellent source” of vitamin C requires at least 20% daily value.⁷ This is where the hooking statutes, discussed above, play a crucial role. Because there is a supposed statutory violation, the lawsuits technically have a basis to proceed without examining whether a reasonable consumer is actually deceived by the claim. However, those allegations can be riddled with other procedural issues that have an impact on their viability. To bring a class action lawsuit, plaintiffs must also satisfy numerous procedural standards, for example, that they actually relied on the claim at issue. This can be tricky with compliance issues, particularly when the allegation involves a disclaimer that was omitted. For example, a recent case challenged the claim “no added sugar” because it lacked the mandatory disclosure that it was not a low-calorie food. While that might have been true, the court still dismissed the action because the plaintiff did not adequately allege how the calorie content influenced her purchasing decision.⁸
 
But even if a claim is technically compliant with FDA requirements, it is still vital to assess whether it is otherwise somehow not truthful or is misleading. This came to a head in a recent Ninth Circuit Court of Appeals case concerning the claim “0g Trans Fat per serving.”⁹ In that case, the product may have had a small amount of trans fat, but under FDA’s rounding rules, the Nutrition Facts listing was required to declare “0g Trans Fat.”¹⁰ Even though the regulations required the declaration elsewhere on the label to match the Nutrition Facts, the court found the challenge to “0g Trans Fat per serving” was not preempted.¹¹ A key part of the court’s reasoning was that, although FDA required the Trans Fat declaration in the Nutrition Facts, it did not require a “0g” claim anywhere else on the label.¹² Thus, it seems that voluntary use of nutrition claims, even if they are technically compliant, must still be independently examined under consumer deception standards to assess whether there is a potentially deceptive claim.
 
Anecdotally, these technical lawsuits seem to be on the rise. However, the trend is difficult to track because most cases start with private, presuit demand letters. And although there are numerous filed lawsuits with these types of allegations, the majority never see their day in court. The issue around whether a nutrient content claim meets FDA requirements is usually cut-and-dried, and although there are procedural defenses available, for the most part, they are case and fact specific.
 
Litigation can be costly, and many companies opt to settle claims confidentially before a suit is filed publicly to avoid the time, expense, and headache. The good news is that these types of suits can be easily avoided by diligent reviews for regulatory compliance.
 
Flavor and coloring claims
One of the fastest growing areas of litigation surrounds “flavor” designations. In the last year alone, dozens upon dozens of lawsuits were filed alleging that the absence of flavor language is deceptive to consumers. The regulations specify that when a product does not contain enough of a commonly expected ingredient to independently characterize the flavor, and instead uses natural and/or artificial flavors, certain qualifying language is required by the flavor designation such as “flavored,” “naturally flavored,” or “artificially flavored,” among others, to signal there are additional flavor ingredients in the product.¹³
 
The correct flavor language qualifier is often a lengthy and head-spinning analysis, and arguably well beyond the average consumer’s understanding and best left to the FDA. But what is perhaps more easily understood by consumers is simply whether the word “flavored” is there at all. Therefore, these lawsuits have targeted products that lack an expected characterizing ingredient and simply have natural and/or artificial flavors, but do not include any flavor qualifying language. For example, the most common targets are products described as “vanilla” without any qualifying flavor language, but do not actually contain any vanilla beans.¹⁴ Most of those cases are in their infancy, and it is therefore not clear whether courts will leave that technical compliance issue to the FDA or permit the class actions to proceed. Given that the focus is not necessarily technical compliance, and more on the absence of a supposedly expected ingredient, it does seem likely courts may find consumers could be deceived and permit the cases to move forward.
 
Similarly, there have been cases targeting claims such as “natural flavors” and “no artificial flavors.” Perhaps, unsurprisingly, these claims are allegedly deceptive owing to the presence of an artificial or nonnatural flavor. The challenges tend to target “synthetic” ingredients that may impart a taste or flavor. Companies have generally responded that an ingredient’s intended function is not for flavor and that labeling it as such contradicts FDA regulations. A frequent example is malic acid, which can impart a tart taste but can also be used for preservative purposes.¹⁵ Courts have generally let those cases proceed to determine what the true purpose of the ingredient is and whether it affects taste.
 
A related claim that is starting to face scrutiny is “no artificial colors.” Although the court cases are sparse, pre-suit demand letters have challenged the claim. FDA policy is that any ingredient – regardless of source – results in an artificially colored product.¹⁶ Plaintiffs’ attorneys have used this policy to argue the claim is deceptive when any color ingredient is used, even if it derived from a plant or natural source, such as beet juice. Fortunately, FDA has stated in the rulemaking history that it does not believe some plant-based or spice-derived colors are “per se” artificial.¹⁷ A quick internet search shows consumers seem to readily understand “artificial colors” to refer to FD&C colors, meaning they could reasonably expect a product with that claim to simply have no FD&C colors. As such, although these cases are starting to crop up, they may not be as frequent as the flavor challenge cases, because there are more robust defenses available. And, although the targets of these flavor and coloring lawsuits have traditionally been conventional food products, companies that make protein powders and nutrition bars – or other supplements with flavor or coloring added – may find themselves facing similar actions.
 
Ingredient permissibility
Other class action targets include the use of ingredients that are subject to ongoing FDA review. A timely example is FDA’s current position on cannabidiol (CBD) and the recent wave of lawsuits alleging CBD products are illegally labeled and marketed as dietary supplements or food.¹⁸ Although FDA’s current position is that CBD is not a permissible dietary supplement or food ingredient, a growing number of cases have been dismissed or stayed based on primary jurisdiction and preemption arguments given the agency’s ongoing and active review of this ingredient.
 
FDA’s position on CBD has been widely publicized in various agency statements and cited in numerous Warning Letters.¹⁹ However, these are not final agency actions pursuant to its own internal guidance,²⁰ and, further, FDA’s statements have made clear that the agency is actively reviewing use of CBD in dietary supplements and food.²¹ That has led at least one court to stay a lawsuit pursuant to the primary jurisdiction doctrine, because the plaintiffs’ claims regarding falsely labeled CBD products implicate the agency’s expertise with respect to a regulated product, as well as the need for uniform, consistent guidance from the agency.²² In addition, although plaintiffs in these lawsuits allege violations of state consumer deceptive and unlawful practices acts, the claims are arguably private enforcement of the FD&C Act because FDA’s position is based on statutory provisions found only in the Act. And, as discussed above, plaintiffs cannot sidestep FDA’s exclusive authority to enforce the FD&C Act.
 
In an older but notable case, a California class action premised on alleged noncompliance with FDA’s new dietary ingredient notification requirement was dismissed after the court found that private citizens have no legal right to allege such a violation.²³ The plaintiff had attempted to link the claim to state consumer protection and adulteration statutes, rather than to the FD&C Act. However, the court found those arguments unpersuasive and determined that the plaintiff was alleging only a violation of the FD&C Act, because the alleged failure to submit a notification did not violate any state law.²⁴ The court therefore dismissed the claim because it constituted private enforcement of the FD&C Act.
 
Structure/function claims
Numerous recent false advertising claims have encroached, perhaps unintentionally, on FDA regulation of permissible structure/function claims. Although it is not new that these claims are challenged as false or misleading, recent cases have more clearly delineated that consumers must have actual evidence of falsity to pursue such claims. For example, a plaintiff must demonstrate there is scientific evidence showing the product does not provide the claimed structure/function benefit. In one such case, the Ninth Circuit dismissed a class action alleging that a dietary supplement marketer falsely advertised the weight-management, energy, and wellness benefits of its supplement products.²⁵ The court found that “anecdotal evidence” based on the plaintiffs’ own experience with the products was “insufficient to create an inference for falsity.”²⁶ The court likewise rejected a study offered by the plaintiffs, finding it was irrelevant both to the plaintiffs’ circumstances and the products at issue in the case.²⁷
 

As plaintiffs work to meet the threshold for falsity, the allegations have implicated FDA’s standard in the FD&C Act for substantiating structure/function claims, leading courts to determine that such allegations are preempted. In a somewhat recent case, hailed as a victory for the dietary supplement industry, the Ninth Circuit struck down a plaintiff’s attempt to impose a higher evidentiary standard for structure/function claims under California law.²⁸ The plaintiff alleged that the claims “support cardiovascular health,” “promote heart health,” and other, similar statements violated California’s false advertising laws because the supplements do not prevent cardiovascular disease – in other words, the plaintiff essentially asked the court to require drug-level evidence to support the claims.
 

In this case, the plaintiff sought to impose a level of substantiation under state law that was not identical to the standard under Section 403(r)(6) of the FD&C Act. However, the court recognized that the Act expressly preempts any state law for food labeling that is not identical to its requirements. The plaintiff, as the court succinctly stated, “disagrees with the federal statutory scheme for dietary supplements, but we cannot accept his invitation to upend it.”²⁹ This decision follows a nearly identical holding a few years earlier in the First Circuit Court of Appeals.³⁰ It is extremely promising to see two appellate courts reach the same conclusion and it bodes well to dissuade future allegations based on similar theories.
 
Conclusion
Fortunately, there are a number of steps that can help shield dietary supplement companies from these types of lawsuits. Beyond ensuring compliance with relevant FDA regulations, the “reasonable consumer” standard will continue to serve an important function by preventing lawsuits that defy plausibility. Companies should review product label and marketing materials from the vantage point of this “reasonable consumer” and look beyond regulatory compliance to determine the overall message of claims in labeling. It is imperative to determine whether there are any implied claims or message that, if challenged, could not be substantiated even if the claim is technically compliant with FDA requirements.
 

In summary, companies must approach compliance from both an FDA enforcement perspective and a consumer class action perspective and they should consider all possible interpretations of the product labeling as a whole. For challenges involving matters on which FDA has not made a final determination, such as ingredients under review by FDA or those for which the FD&C Act has clear standards in place, companies may be able to fight back and successfully use primary jurisdiction and preemption arguments.
 
Abbreviations
CBD, cannabidiol; FDA, Food and Drug Administration; FD&C, Food Drug and Cosmetic [Act].

References

1. Lavie v. Procter & Gamble Co, 105 Cal. App. 4th 496, 508 (2003).

2. Cohen v. JP Morgan Chase & Co, 498 F.3d 111, 126 (2nd Cir. 2007).

3. Op cit 1.

4. 21 U.S.C. § 337(a) (“all such proceedings for the enforcement, or to restrain violations, of [the FD&C Act] shall be by and in the name of the United States.”).

5. California Business and Professions Code §§ 17200 et seq.

6. Perez v. Nidek Co, 657 F. Supp. 2d 1156 (S.D. Cal. 2009) (aff’d 711 F.3d 1109, 1120 (9th Cir. 2013)).

7. 21 C.F.R. § 101.54(b).

8. Shaeffer v. Califia Farms LLC, 44 Cal. App. 5th 1125 (2020).

9. Hawkins v. Kroger Co, 906 F.3d 763 (9th Cir. 2018).

10. Ibid. 9 at 767.

11. Ibid. 9 at 772.

12. Ibid. 9 at 772.

13. 21 C.F.R. § 101.22(i).

14. See Civello et al v. Conopco Inc, Case No. 20-cv-1173 (S.D.N.Y.); see also Webber et al v. McDonald’s Corp, Case No. 20-cv-2058 (S.D.N.Y.).

15. See, e.g., Branca v. Bai Brands LLC, 2019 U.S. Dist. LEXIS 37105 (S.D. Cal. 2018); Hilsley v. Ocean Spray Cranberries Inc, 2018 U.S. Dist. LEXIS 185859 (S.D. Cal. 2019); Allred v. Frito-Lay N. Am. Inc, 2019 U.S. Dist. LEXIS 35281 (S.D. Cal 2019).

16. Food and Drug Administration. CPG Sec 587.100: Label Declaration of Certification-Exempt Color Additives November 2005. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/cpg-sec-587100-label-declaration-certification-exempt-color-additives. Last updated 24 August 2018. Accessed 17 April 2020.

17. Food Labeling; Spices Flavorings, Colorings, and Chemical Preservatives, 38 Fed. Reg. 20718, 20719-20 (Aug. 2, 1973) (“[t]he Commissioner agrees that substances such as beet juice, paprika, turmeric, and saffron are not artificial colors per se.”).

18. See, e.g., McCarthy v. Elixinol, LLC, Case No. 5:19-cv-07948 (N.D. Cal).

19. Food and Drug Administration. Warning Letter [to] Koi CBD LLC, 22 November 2019. https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/koi-cbd-llc-593391-11222019. Last updated 25 November 2019. Access 17 April 2020.

20. Food and Drug Administration. Regulatory Procedures Manual. Chapter 4-1-1: Warning Letter Procedures, Revision 06, March 2020. FDA Website. https://www.fda.gov/media/71878/download. Access 17 April 2020.

21. Report to the U.S. House Committee on Appropriations and the U.S. Senate Committee on Appropriations: Cannabidiol (CBD) Report in Response to Further Consolidated Appropriations Act 2020. FDA. March 6 2020.

22. Snyder et al v. Green Roads of Florida LLC, Case No. 0:19-cv-62342 (S.D. Fla.). In Snyder, the plaintiffs alleged that the defendant misrepresented the amount of CBD contained in various CBD products.

23. Dabish v. MusclePharm Corp, 2016 U.S. Dist. LEXIS 191885 at 15 (S.D. Cal 2016).

24. ibid.

25. Tubbs v. AdvoCare Int’l LP, 785 F. App’x 396 (9th Cir. 2019).

26. Ibid. at 396.

27. Ibid. at 397.

28. Dachauer v. NBTY Inc, 913 F.3d 844 (2019).

29. Ibid. 28 at 848.

30. Kaufman v. CVS Caremark Corp, 836 F.3d 88 (1st Cir. 2016).

 
About the authors
Rend Al-Mondhiry, JD, is a partner at Amin Talati Wasserman LLP, where she advises dietary supplement, food, cosmetic, and over-the-counter drug companies on a broad range of FDA and Federal Trade Commission (FTC) regulatory and compliance matters. Al-Mondhiry earned her law degree from the Dickinson School of Law, Pennsylvania State University, and is admitted in District of Columbia, Pennsylvania, and New Jersey. She can be contacted at Rend@amintalati.com.

 
Jennifer M. Adams, JD, is an associate attorney at Amin Talati Wasserman LLP. She advises dietary supplement, food, cosmetic, and over-the-counter drug companies on a wide variety of FDA and FTC compliance matters, as well as advocating on their behalf with respect to challenges from FDA, FTC, state attorneys general, and consumer class actions. Adams has a food science background and is admitted in Illinois and California. She can be contacted at Jennifer@amintalati.com.

 
Cite as: Al-Mondhiry R, Adams JM. Dietary supplement class actions in focus: Recent overlap with traditional FDA enforcement. Regulatory Focus. June 2020. Regulatory Affairs Professional Society.