LITIGATION

Personal Care Products

In a blow to the trending “pink tax” theory of liability in consumer class actions, in May, the Eighth Circuit ruled that various personal care product manufacturers and retailers did not violate Missouri’s anti-discrimination laws by charging more for products marketed towards women as compared to allegedly identical products that were either marketed towards men or utilized gender-neutral marketing. The Court found that the plaintiff “mistakes gender-based marketing for gender discrimination” and, in the process, ignores numerous differences between the products that account for the higher price tag. There has been a handful of similar “pink tax” cases filed over the last year or two, but this is the first appellate court to rule on the issue.

In another victory for industry, the Southern District of California dismissed a putative class action complaint filed against Edgewell Personal Care Company alleging that its Wet Ones wipes don’t kill 99.99% of germs as advertised. The complaint pointed to the products’ active ingredient, benzalkonium chloride, and alleged that it was not able to destroy a number of disease-causing microbes, including bacteria spores and certain viruses, that make up far more than 0.01% of germs. The court ruled that many of the germs identified in the complaint are sexually transmitted, food-borne, or otherwise not expected to be found on people’s hands and, therefore, reasonable consumers would not expect the wipes to be effective against those diseases. The court also dismissed claims challenging the products’ “hypoallergenic” and “gentle” marketing claims. While the plaintiff alleged that the product contained some ingredients that are “known allergens or skin irritants,” the court ruled that a reasonable consumer would not interpret “hypoallergenic” and “gentle” to mean that the hand wipes were entirely free of allergens or skin irritants.

In terms of new class action filings, May and June saw a continuation of previously-reported trends:

• Gum Repair: One class action was filed against The Proctor & Gamble Co. challenging gum repair claims made in connection with certain toothpaste products.
• Sunscreen: Two class actions were filed challenging “mineral-based” sunscreen marketing claims on the grounds that the products (Blue Lizard and CVS brand) actually contain less desirable chemical ingredients that can cause skin irritation and allergic reactions. Two other class actions were filed alleging that Banana Boat and Neutrogena sunscreen products contain benzene, a human carcinogen, and therefore are unfit for their intended purpose.
• Oil Free: Two new class actions were filed challenging “oil free” representations relating to Sun Silk Crème and Clinique’s skincare products.
• Natural: Six new class actions were filed challenging “natural” and “organic” marketing claims relating to various hair products, dietary supplements, pet shampoos, and reusable menstrual hygiene products.
• Lidocaine: One new class action was filed against Sanofi US Corp. alleging that its aspercreme patches are deceptively marketed as providing “fast acting” and “max strength” pain relief when other patch products deliver more lidocaine to the affected areas, are more effective, and are approved by FDA for more purposes.
• Hand Sanitizer: Two new actions were filed alleging that certain hand sanitizer products are falsely marketed as killing 99.99% of germs when, in fact, alcohol-based sanitizers do not kill many types of viruses (one against Goja Industries re Purell hand sanitizer products and one against Target Corporation regarding its “up&up” sanitizer products).

Dietary Supplements

We previously reported that a number of CBD class actions have been stayed over the past year under the primary jurisdiction doctrine while the FDA considered potential new CBD regulations. (See posts dated January 10, 2020, June 5, 2020, June 20, 2020 and March 2021.) Breaking from this trend in May, the Central District of California ruled that a proposed class action alleging that Just Brands USA Inc. and other companies overstated the amount of CBD contained in their products could proceed without waiting for the FDA to promulgate new regulations. The court ruled that the proposed regulations were likely to involve the legality and safety of CBD products sold as medicine or dietary supplements, and that it was unlikely that the guidelines were unlikely to address the labeling issues raised in this action. Accordingly, the court found that it was competent to resolve the matter without waiting for the FDA to weigh in.

June also saw a number of new putative class action complaints filed involving allegedly misbranded dietary supplement products. Two such actions were filed in California federal court alleging that St. John's Wort products could treat depression, anxiety and other issues without side effects. These filings occurred a few months after the FDA sent a warning letter that the products were making unauthorized drug claims. Another putative class action was filed in the Eastern District of New York against Pure Nootropic LLC, alleging that its nootropics were advertised as boosting mental energy, but contained unapproved ingredients and did not deliver the promised benefits. A third action was filed in New Jersey state court against Trimark Holdings LLC, alleging that its Trizene product was falsely advertised as curing erectile dysfunction.

NAD

We highlight two recent cases in which NAD focused on details of claim substantiation.

NerveRenew

NAD recommended the discontinuation of three express claims made by Neuropathy Treatment Group (NTG) about its NerveRenew dietary supplement.

• “These special forms of vitamin B are effective, but 100% Stabilized R-Alpha Lipoic Acid (R-ALA) is our most important ingredient.”
• “It contains the most powerful and clinically studied forms of B vitamins, Stabilized R Alpha Lipoic Acid, anti-oxidants and herbal extracts. All the ingredients have been included in clinical studies and provide a synergistic effect when taken together.”
• “3X Greater Bioavailability.”

Two clinical studies assessed ALA’s (not R-ALA’s impact) impact on diabetic neuropathy, but a study for ALA cannot be used to support a claim for a product containing R-ALA—there is no evidence in the record that ALA and RALA are interchangeable. And these studies tested ALA in amounts greater than the amount found in NerveRenew. Even if the ALA is interchangeable with R-ALA in the product, studies which assess an ingredient dose in excess of what is found in the product will not be sufficiently reliable to support an efficacy claim for that product.

NAD recommended that the claim “It contains the most powerful and clinically studied forms of B vitamins, Stabilized R Alpha Lipoic Acid, anti-oxidants and herbal extracts” be discontinued because the advertiser did not provide evidence demonstrating that any of the product’s ingredients are the most powerful or clinically studied of their ingredient forms. Moreover, NTG provided clinical studies of only some ingredients in the product. For studies on an ingredient to support qualified claims, the studies must test the ingredient in amounts that are contained in the product and the test must involve the correct study population. The study must also include relevant endpoints, and elicit statistically significant and clinically meaningful results. Therefore, even though it is true that the ingredients have been included in clinical studies, if the studies are flawed, the claim could be misleading. Here, none of studies submitted on individual ingredients or a combination of ingredients assessed non-diabetic neuropathy or other types of nerve pain. Therefore, the studies do not support the challenged claim.

NAD recommended that the claim “All the ingredients have been included in clinical studies and provide a synergistic effect when taken together” be discontinued because there is no evidence in the record properly assessing all of the ingredients to determine they all confer the claimed nerve health benefits. Two studies assessed more than one of the ingredients found in the product, but neither was conducted with the appropriate population. They instead assessed individuals with diabetic neuropathy, and thus do not support claims directed to a different target audience.

Lastly, NAD also recommended that NTG discontinue the “3X Greater Bioavailability” claim. Bioavailability in dietary supplements concerns the proportion of the administered substance capable of being absorbed and available for cellular uptake, use, or storage. Superior absorption claims are health-related claims that must be supported by competent and reliable scientific evidence. NTG provided three clinical studies on the bioavailability of benfotiamine and other thiamin derivatives, but only one compared the bioavailability of benfotiamine and thiamin hydrochloride. That one study, however, only included Chinese male subjects—too narrow a population to relate to NerveRenew’s broader target population.

Crest Whitening Emulsion

NAD assessed Smile Direct Club LLC’s (SDC’s) challenge to claims made by The Procter & Gamble Company (P&G) about its Crest Whitening Emulsions. NAD found the following claims to be substantiated: (1) Crest Whitening Emulsions provides “better” or “100% whiter” results and “whitens better” than the ARC Pen; and (2) Emulsions whitens with “virtually no sensitivity.”

However, NAD cautioned P&G’s use of or recommended P&G discontinue the following claims: (1) Whitens “Faster”; (2) “Best In Class Results”; (3) “Virtually No Sensitivity”; (4) Stays on teeth “10x longer”; (5) “Starts working instantly” and “whiter smile in seconds”; (6) “stop stains before they set in”; and (7) “Unlike toothpastes and paint-on gels which dilute and wash away quickly, Crest Whitening Emulsions includes 5X active peroxide droplets suspended in a hydrating base to whiten teeth.”

In support of its “100% Whiter” and “Better” claims, P&G submitted an executive summary of a clinical trial that sought to assess tooth color changes with the use of Emulsions as compared to the ARC Pen. SDC argued that statistically significant changes in the study’s technical measurements may not actually correlate to visible differences in tooth whitening. However, NAD concluded P&G provided statistically significant evidence that evaluated the whitening benefits over the ARC Pen, and further demonstrated that the Emulsions’ whitening measurement translated to “noticeability.” Conversely, SDC failed to demonstrate that P&G’s measurements were flawed or that other bleaching shade guides were superior for measuring whitening. Thus P&G provided a reasonable basis for claims that Crest Whitening Emulsions provides “better” or “100% whiter” results and “whitens better,” than the ARC Pen.

NAD analyzed the “Faster” claim, determining that Emulsions achieves a whitening benefit at 15 days, while the ARC pen does not. Therefore Emulsions necessarily achieves “Faster” whitening. NAD also found that in context (“Better…Faster…100% Whiter”), consumers would not reasonably understand it as a message about the application and wear time of the product. However, it might convey such a message in other contexts. Because that message is not supported by evidence in the record, P&G should avoid conveying it to consumers. P&G’s “virtually no sensitivity” claim was sufficiently reliable because, through some subjects using Emulsions reported “oral irritation” or “treatment related tooth sensitivity,” P&G makes no claims regarding “oral irritation”—only tooth “sensitivity.” In so finding, NAD was mindful that P&G’s claim regarding tooth sensitivity is not absolute but, rather, qualified by the word, “virtually.”

NAD concluded that P&G should discontinue or modify its other claims for insufficient evidence. NAD recommended P&G discontinue its “Best in Class Results” claim because it found no evidence of a comparative measured “win” over P&G’s competitors with respect to a particular attribute. P&G provided no testing against any whitening products other than the ARC Whitening pen, and there is no evidence that the Emulsions are a “class unto themselves” consistent with consumers understanding of the “class” of tooth whitening applications. Neither the underlying clinical study results nor the fact that the product employs a new patented technology provides a reasonable basis for the superior whitening results message reasonably conveyed by a “Best in Class Results” claim. NAD deemed P&G’s basic, undated summary of a “substantivity” study to be insufficiently reliable to provide a reasonable basis for P&G’s “stays on 10x longer,” claim and recommended that this claim be discontinued. P&G summarized a study conducted on a hydrogen peroxide test strip to show its Emulsions’ instant impact to support its claims that Emulsions “starts working instantly,” and that consumers can achieve a noticeably “whiter smile in seconds.” But because there is no evidence that P&G’s demonstration replicates conditions in the human mouth or that the strip replicates tooth enamel surface, it does not establish that Emulsions “starts working instantly” or achieves “white smile[s] in seconds.”

NAD determined that consumers will reasonably interpret the “stops stains before they set in” claim not as a statement about Emulsions ability to remove existing staining, but as a claim that it can prevent future stains. P&G did not demonstrate that Emulsions acts as a barrier to stop or prevent new “stains” from setting in, as will be reasonably understood by consumers. Therefore, NAD recommended that P&G discontinue or modify its “stops stains before they set in” claim to more accurately reflect that Emulsions reverses existing staining and avoid any implication that Emulsions prevents “stains” from common teeth staining compounds from “setting in.”

Despite P&G’s claims that Emulsions “delivers 5x more active hydrogen peroxide compared to other whitening gels and pens,” both Emulsions and the ARC Pen appear to contain the same 3% hydrogen peroxide, with the hydrogen peroxide in Emulsions redistributed into “droplets” of higher concentration compared to the ARC Pen gel. Even if it is technically true that Emulsions contains five times more “active hydrogen peroxide,” NAD determined that consumers are likely to understand P&G’s claims to mean that Emulsions contains five times more overall hydrogen peroxide than competing products. Therefore, NAD recommended that P&G discontinue those claims. If the above claim is modified to make clear that this comparison is to the ARC Pen, then the “5x active peroxide droplets suspended in a hydrating base to whiten teeth,” claim would be supported.

FTC

Federal Trade Commission

The FTC announced a law enforcement action to halt deceptive health and efficacy claims in the growing market for cannabidiol (CBD) products. In the action, Arizona-based Kushly Industries LLC (Kushly) and the company’s sole officer, Cody Alt, agreed not to make false or unsupported claims or falsely claim that scientific evidence exists to back them up. The FTC alleges Kushly and Alt made false or unsubstantiated claims that their CBD products could effectively treat or cure conditions ranging from acne and psoriasis to more serious diseases, like cancer and multiple sclerosis. Respondents will pay the FTC more than $30,000 in consumer redress.

This is the seventh case the FTC has brought against CBD sellers for making unsupported health claims. According to the FTC’s complaint, the respondents have used these false or unsubstantiated claims to market or sell a range of products containing CBD, including gummies, softgel capsules, and topical ointments. They promoted their products on their website, kushly.com, and social media. The complaint alleges that Alt participated directly in promoting and advertising Kushly’s CBD products and has been featured in articles about the company and its CBD products.

The proposed administrative order covers any dietary supplement, drug, or food product that the respondents sell, including CBD products. It prohibits Kushly and Alt from making any representations about the health benefits, efficacy, safety or side effect of such products, unless the representations are true when they are made, are not misleading, and rely on competent scientific evidence. The order requires respondents to secure and keep any human clinical tests or studies used to substantiate their claims. The order also prohibits Kushly and Alt from misrepresenting that a covered product is clinically proven to treat, alleviate, or cure: chronic pain, multiple sclerosis, anxiety, depression, cancer, sleep disorders, hypertension, Parkinson’s disease, Alzheimer’s disease, acne, psoriasis, and eczema. Respondents may not misrepresent that scientific evidence exists to back up these claims. Finally, the order requires the respondents to pay the FTC $30,583.14—the amount consumers paid Kushly for products sold using deceptive marketing. The FTC finalized the settlement earlier this month.

Fertile Ground

The FTC joined the U.S. Food and Drug Administration (FDA) in sending warning letters to five companies that may be making false or unsubstantiated claims that their products can cure, treat, mitigate, or prevent infertility and other reproductive disorders in violation of the FTC Act, and that are unapproved and misbranded.

Continuing with the enforcement on allegedly fraudulent products, the FTC also announced a settlement with Dr. Steven Meis, the medical director of Golden Sunrise Nutraceutical involving allegations that he took part in deceptively advertising a $23,000 treatment plan as a scientifically proven way to treat COVID-19. Dr. Stephen Meis will be barred from making similar unsupported health claims in the future and will pay $103,420 to provide refunds to defrauded consumers.

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Thanks for reading. See you in August!

Summer Associate Elizabeth Hamner contributed to this update.

Let’s take a look….

NAD

NAD determined that certain advertising claims made by Zarbee’s, Inc. for its cough products sufficiently identify that honey is the source of the cough soothing benefit and would not reasonably mislead consumers as to the reason for the product’s cough soothing efficacy. However, NAD found that other claims, which could reasonably suggest that the cough soothing benefit was attributable to multiple ingredients, and recommended modification to clarify that the cough soothing benefit is attributable to the honey and not the combination of main ingredients. The efficacy of honey to soothe coughs was not at issue.

Supplement maker First Day Life, Inc., voluntarily discontinued a number of claims relating to its Daily Enrichment Vitamin, which were challenged by the Council for Responsible Nutrition. The challenged claims focused on nutritional deficiencies as the cause of a broad range of childhood behavior, including picky eating, distraction, tantrums, and hyperactivity. In addition to being a good reminder of the health claims substantiation requirements, i.e., competent and reliable scientific evidence, this case is notable because several of the claimed benefits were also tied to specific timeframes, e.g., improvement in 30 days or 45 days, which also requires substantiation.

Side-stepping from products used on the body to consumer health products used in the home, NAD examined claims made by NuWave, LLC, relative to its OxyPure Air Purifier product. Claims included:

• The claim on the advertiser’s website, “Remove airborne coronavirus by 99.999%*” with a bottom-of-the page disclaimer stating “*The University of Minnesota tested the OxyPure’s removal of the porcine respiratory coronavirus, a surrogate for SARS-CoV-2, the coronavirus that causes COVID-19”; and
• A YouTube video advertisement which touts the product as removing “virtually all indoor air pollutants” and notes, in relevant part, that “[a]sthma and allergies are at an all-time high. Sleeping problems are epidemic and carry their own health risks. Airborne pathogens, viruses, bacteria and mold are not far behind” (simultaneously showing a map of the world with the words “AIRBORNE VIRUSES” and lines originating from China to various cities around the world showing the spread of “airborne viruses”).

The advertiser agreed to modify its website advertising to state: “OxyPure is Calculated to Remove 99.999% of Coronavirus Surrogate from the Air in Areas up to 1,200 Square Feet in 6 Hours!* which is qualified by a clear and conspicuous disclosure directly underneath the claim, stating that “SARS-COV-2 was not used in the study conducted by the University of Minnesota for the efficacy of NuWave OxyPure.” The advertiser also agreed to reach out to its affiliate to modify the YouTube video to remove the frame that features the aforementioned map and the onscreen and audio reference to "airborne viruses" to avoid conveying the unsupported message that OxyPure Air Purifier is effective in killing 99.999% of COVID-19.

Also of interest was NAD’s challenge against New York Presbyterian Hospital relative to the Hospital’s pre-COVID advertising campaign. NAD challenged claims such as “Best survival rates of any U.S. hospital” and the use of testimonials that NAD was concerned conveyed that patients facing a serious prognosis will achieve a better outcome at New York Presbyterian than at other hospitals. The Hospital modified the campaign in response to the challenge and NAD ultimately administratively closed the matter given the pandemic-related extenuating circumstances. The case serves as an important reminder about the unique relationship between healthcare providers and patients and the power that such claims may have in the market, particularly in the context of a pandemic.

FTC

April was a very busy and gut-wrenching month for the FTC.

In a stunning blow to the FTC’s enforcement authority, the Supreme Court unanimously ruled in AMG Capital Management v. FTC that Section 13(b) of the FTC Act does not allow for the recovery of restitution, disgorgement, or any form of equitable monetary relief. Despite decades of final orders awarding, and settlements in which defendants agreed to pay, substantial monetary relief, Justice Breyer explained that the statute’s emphasis on whether a defendant “is violating, or is about to violate, any provision of law enforced by the” FTC reflects a focus on “relief that is prospective, not retrospective.” Accordingly, the Court found that Section 13(b) was designed to “stop[] seemingly unfair practices from taking place while the Commission determines their lawfulness,” not to compensate consumers for alleged economic harm. Courts and litigants across the country quickly reacted to the decision, with the Ninth Circuit vacating a preliminary injunction that had previously been entered to preserve the defendant’s assets to satisfy a potential award of monetary relief and defendants filings motions for judgment on the pleadings to dismiss the FTC’s claims for monetary relief. AMG is not the final word on the issue, though, and a number of legislative efforts are underway to restore the agency’s enforcement authority. While there appears to be support for legislative action on both sides of the aisle, Republicans are advocating for a more measured statute that would restore the FTC’s ability to obtain monetary relief while ensuring the due process rights of those affected, including the imposition of a statute of limitations and a specific direction that the statute only be applied to cases filed after its enactment instead of being applied retroactively to past and pending cases. We will continue to report on the judicial and legislative developments resulting from the AMG decision.

Despite all the turmoil, the FTC did take some action in other areas in April. As we reported earlier this month, the FTC filed its first case under the COVID-19 Consumer Protection Act, which gives the agency authority to seek civil penalties for deceptive COVID-related acts and practices. The new complaint alleges that, despite prior receipt of a letter warning of unsubstantiated COVID-19 efficacy claims, chiropractor Eric Anthony Nepute and his company Quickwork LLC deceptively marketed vitamin D and zinc products under the “Wellness Warrior” brand for the treatment, prevention, and cure of COVID-19.

The FTC also sent out 30 warning letters to companies regarding concerns about their COVID-related advertising claims. These letters were sent after the effective date of the COVID-19 Consumer Protection Act, and thus warn advertisers that anyone who makes deceptive claims about the treatment, cure, prevention or mitigation of COVID-19 is subject to civil penalties of up to $43,792 per violation. In response to these letters, it appears that all 30 companies have removed the claims that were identified as questionable. It is also important to note than in these letters a number of platforms including Facebook and Youtube were mentioned in the cc: field, indicating that some of the recipients’ deceptive claims had run on these platforms at some point. Despite the fact that these letters were sent to 30 companies directly, all advertisers should take note of this loud and clear warning from the FTC.

Shifting gears from COVID-related matters, the FTC’s settlement with BASF and DIEM Labs suggests that the FTC is holding firm to its position that post hoc analysis of clinical studies is not sufficient claim substantiation. The settlement concerns Hepaxa and Hepaxa PD, fish oil products marketed to treat Non-Alcoholic Fatty Liver Disease (NAFLD). The FTC alleged that BASF, the maker of the Hepaxa products; DIEM Labs, the exclusive US distributor of the products; and two DIEM Labs executives claimed without substantiation that Hepaxa reduces liver fat.

In general, advertisers must possess competent and reliable scientific evidence to substantiate health claims. With respect to Hepaxa, the FTC did not dispute that the defendants had conducted a “randomized, double-blind human clinical trial designed to evaluate whether Hepaxa . . . reduces liver fat in adults with NAFLD” or that they based their claims on results from the trial. The problem, according to the FTC, was that the clinical trial as constructed was unsuccessful. During the trial, 81 participants took Hepaxa and another 86 took an olive oil placebo. At the trial’s end, MRI data did not show a statistically significant reduction in liver fat for Hepaxa patients as compared to placebo patients. The FTC alleged that the defendants then engaged in a post hoc analysis to salvage the trial by identifying a subset of participants with some type of positive result. Ultimately, the defendants moved away from MRIs, grouped participants based on their Fatty Liver Index scores, and identified a statistically significant effect among participants with scores above 40—a subset containing five Hepaxa patients.

Because this case resulted in a settlement, it does not modify or create law. However, settlements are important markers of the FTC’s thinking, and the FTC’s four commissioners all voted to approve this settlement. It is notable, then, that the complaint contains the categorical assertion that results from post hoc analyses are “exploratory, at best” – an assertion that is notably absent from the FTC’s own Advertising Guide for the Dietary Supplement Industry. As this statement shows, the FTC expects claims based on trial results to reflect the scope and design of the study as initially planned as opposed to statistically significant data identified after the trial has ended.

Finally, while the FTC’s desire to hold individuals accountable for corporate violations of the FTC Act is no longer news, the allegations included in a complaint shed light on what conduct the FTC believes supports liability—and whom it is willing to hold liable. Here, the FTC sued DIEM Labs’ co-owner/CEO, but it also sued DIEM Labs’ Director of Sales, alleging that he was directly involved in identifying alternative analyses of the clinical trial, helped create advertising for Hepaxa, and claimed at conferences that Hepaxa successfully treats NAFLD. Individual liability can rest on control or authority to control corporate acts, as is commonly seen in allegations against owners or CEOs. But it can also rest on direct participation, and this settlement demonstrates the FTC’s willingness to sue key actors—not just CEOs or owners—for corporate violations of the FTC Act.

Class Action Decisions and Settlements

A class of California consumers alleging that CVS brand hand sanitizer failed to live up to its promise of killing 99.99% of germs was certified by a judge in the Central District of California. The plaintiff’s motion referenced the deposition of a purported microbial expert, who testified that the sanitizer does not kill 99.99% of the germs, and a purported marketing expert, who testified that consumer would find the claim material when deciding whether to purchase the product. The Court found that all of the requirements of Rule 23 had been met, and that the survey proposed by plaintiff’s damages expert was adequate for purposes of class certification. See Mier v. CVS Health. Ironically, this decision came nearly two months after a judge in the Southern District of California dismissed a similar complaint in Moreno v. Vi-Jon, Inc., which alleged that Vi-Jon’s hand sanitizer products did not kill 99.99% of germs.

A proposed settlement we reported on last month involving Bayer Healthcare and Beiersdorf’s Coppertone “mineral based” sunscreen products was denied preliminary approval by a judge in the Northern District of California. The Court found that the settlement, which provided for a $2.50 refund per unit purchased and injunctive relief, contained a number of flaws. First, the Court was concerned about the scope of the release provision. Contrary to Ninth Circuit precedent, which requires releases in a class action settlement to be limited to claims based on the identical factual predicate of the litigation, the proposed release extended to all claims that “were or could have been asserted in the Litigation.” The Court also found that the settlement inappropriately released unnamed subsidiaries, successors, and other parties that class members would not be able to identify. Second, the Court wanted to know more about the parties’ relationship with the cy pres beneficiary, Look Good Feel Better, and asked them to explain why there was no collusion or conflict of interest. Third, the Court questioned the parties’ request for $530,000 in class administration expenses and the plaintiffs’ request for attorneys’ fees in an amount equaling one-third of the total settlement fund. The Court required that any subsequent motion for preliminary approval explain why the Court should depart from the Ninth’s Circuit’s 25% benchmark for attorneys’ fees. Finally, the Court found that the proposed class notice and claim form were insufficient insofar as they failed to comply with the Northern District’s class action settlement guidelines. The Court denied the motion for preliminary approval without prejudice, and set a case management conference for the end of May.

New Class Action Filings/Trends

We saw a number of new “natural” filings in April. One such complaint was filed in the Western District of Pennsylvania alleging that JM Brands LLC’s Purezero “natural” shampoo products contained a number of components derived from synthetic means (such as emulsifiers and fragrances). The other complaints were all filed in New York State Court and include allegations that: (1) Raw Elements USA’s “natural” sunscreen and moisturizing products contain synthetic ingredients (including zinc oxide, tocopheryl acetate and sodium chloride); (2) Force Factor, LLC’s Somnapure Natural Sleep Aid contains non-natural synthetic ingredients; (3) Plant Health Inc.’s Highland Farms “natural” or “all natural” CBD gummies, moringa capsules and bath bombs contain synthetic ingredients (including citric acid, sodium citrate, potassium citrate, and sodium bicarbonate); and (4) The Country Butcher and Jones Natural Chews (dog snacks and bones) contain synthetic ingredients.

Following up on last month's trends, there were two new cases filed against The Proctor and Gamble Company in April challenging “activated charcoal” and “gum repair” claims with respect to its toothpaste products, and seven new complaints involving Elanco Animal Health Inc.’s Seresto flea and tick products.

See you next month

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National Advertising Division

NAD addressed some unique superiority and comparative claims in the OTC drug space in finding that Hisamitsu America, Inc., supported its duration claims that Salonpas Pain Relief Patch Large “works for up to 12 hours” and “provides relief for up to 12 hours.” However, NAD found that comparative claims such as “All OTC pain relievers, including Voltaren, have one thing in common. None are proven stronger or more effective against pain than Salonpas Pain Relief Patch Large” and “only pain reliever labeled to relieve mild to tougher, moderate pain” and “the strongest labeled OTC topical pain reliever” were not substantiated and recommended that they be discontinued. This is an interesting discussion of comparative advertising for two products approved by FDA where the claims at issue were outside of the FDA approvals. Anyone looking to understand how NAD navigates that jurisdictional issue will want to check out this decision.

NAD extended its already robust body of precedent involving teeth whitening claims with a decision finding that Colgate-Palmolive Company supported advertising claims that its Optic White Renewal Toothpaste has “unprecedented whitening power,” “contains 3% hydrogen peroxide,” and has “the most hydrogen peroxide in a whitening toothpaste.” However, NAD recommended that Colgate discontinue the claim that its product “removes 10 years of yellow stains.” Colgate is appealing that recommendation.

Colgate’s ad campaign for Optic White Renewal Toothpaste cleverly highlights several dubious fads from the last decade (jeggings and shake weights, anyone?). However, NAD’s concerns about Colgate’s substantiation for the “removes 10 years of yellow stains” claims included that Colgate failed to consider the results of the negative control as to two studies that NAD agreed were otherwise reliable. As to a third study, NAD expressed concern about its reliability relative to converting to a years of yellow staining calculation. Many companies in the beauty and personal care space are interested in making claims relating to years of impact for their products. This case provides insights on what to consider for those types of claims.

On the dietary supplement front, NAD revisited the issue of energy claims relative to Vitamin B12 in recommending that Goli Nutrition modify its “Vitamin B12 to help support energy production” claim to make it clear that Goli is referring to cellular energy and to avoid conveying the impression that consumers taking its apple cider vinegar gummies will feel a noticeable increase in energy or become more energetic.” NAD also recommended that Goli discontinue claims that folic acid supports skin health as unsubstantiated.

FDA

FDA announced two warning letters issued to makers of topical CBD products labeled as OTC drugs. Amidst a backdrop of facility inspections that revealed significant good manufacturing compliance concerns, the most important takeaways in this round of CBD enforcement are as follows: FDA does not think that CBD is an appropriate inactive ingredient in OTC drugs, a position that we do not believe the agency has previously articulated publicly. In addition, reaffirming a position that the agency has previously asserted, FDA really frowns on companies using terms such as “FDA registered” to implicitly suggest agency approval. Check out our blog post on these warning letters.

Litigation Developments

Staying with CBD, another CBD class action was stayed pending FDA action. This complaint in Dasilva v. Infinite Product Co. LLC (C.D. Cal.) alleges that the FDA had previously sent a letter to the defendant advising that a variety of its CBD products were “unapproved new drugs” and “misbranded drugs” in violation of the Food, Drug, and Cosmetics Act, and that consumers would not have purchased the defendant’s products if they were aware of the misleading labeling. The court joined a number of previous courts in granting the defendant’s motion to stay pursuant to the primary jurisdiction doctrine, finding that the FDA and Congress have separately expressed interest in regulating CBD and that it was unclear how the court could adjudicate the plaintiffs’ claims given the lack of clarity as to whether the products are drugs, dietary supplements or food products. Specifically, the court noted that any forthcoming legislation or regulation may apply retroactively and inform the court’s consideration of the merits of the dispute.

A judge in the Eastern District of New York granted in part and denied in part a motion to dismiss claims asserted against Bactolac Pharmaceutical, which manufactures the “All Day Energy Greens” supplement marketed and sold by co-defendant NaturMed, Inc. The complaint alleges that the supplement was not safe for human consumption because Bactolac failed to follow NaturMed’s contractual instructions by adding inferior ingredients. The court dismissed six breach of warranty and consumer protection claims, but ruled that the 15 remaining claims must proceed into discovery. The court also denied Bactolac’s motion to strike the plaintiffs’ request for punitive damages

Class Action Settlements

Reckitt Bensicker LLC agreed to settle two parallel class actions (one in California and one in Illinois) alleging that that it falsely advertised joint health benefits of its glucosamine dietary supplement “Move Free Advanced.” After four years of litigation, including a grant of class certification in June 2019 and denial of the defendant’s motion for summary judgment in March 2020, the defendant agreed to pay $53 million to a nationwide class of purchasers, which the plaintiffs characterized as “the largest dietary supplement class action settlement ever reached.” The settlement provides for a cash refund for up to three purchases for a total of $66 ($22 per purchase) or for up to $225 worth of a variety of consumer products of the class member’s choosing ($75 per purchase). Any funds that remain after all claims are processed will be distributed to the Orthopaedic Research Society in accordance with the cy pres doctrine. The settlement further provides that the named plaintiffs will receive up to $7,500 for their participation and that the defendant would not oppose class counsel’s application for attorneys’ fees so long as the application did not exceed $12.5 million. The plaintiffs’ motion for preliminary approval is pending.

Bayer Healthcare and Beiersdorf agreed to pay $2.25 million to settle a federal California class action alleging that their Coppertone “mineral based” sunscreen products deceived consumers into believing that the products contained only mineral active ingredients when, in fact, they contained chemical active ingredients. Class members who submit proof of purchase may receive $2.50 per unit purchased with no limitations. Consumers who do not submit proof of purchase may receive $2.50 per unit purchased up to a maximum of four units per household. The settlement further provides that the named plaintiffs can apply for service awards up to $5,000 each to be paid out of the settlement fund, that class counsel can apply for an award of attorneys’ fees not to exceed one-third of the total fund, and that the cost of notice and administration will also be paid from the fund at a maximum of $530,000 plus postage. Any remaining funds will be disbursed cy pres to the charitable organization Look Good Feel Better. The defendants also agreed to discontinue the “mineral based” labeling and other injunctive relief. A preliminary approval hearing is scheduled for April 21, 2020.

New Class Action Filings/Trends

One new putative class action was filed in California state court challenging “oil free” claims made with respect to various Smashbox cosmetics products. This filing follows a series of similar cases.

A number of new class actions were filed in the Southern District of New York against Tom’s of Maine and Colgate Palmolive involving their charcoal activating toothpaste products. The complaints allege that defendants’ products are marketed as contributing to “healthy gums” and providing “enamel safe whitening” and “gentle cleaning” when, in fact, they are abrasive to enamel and the gums, and pose other safety hazards. A similar action was also filed against Proctor & Gamble in Missouri state court.

Five new class actions were filed in the Northern District of California alleging that “Max Strength” or “Maximum Strength” Lidocaine products contained 4% lidocaine when, in fact, most similar prescription patches contain 5% lidocaine. Three actions were filed against Sanofi-Aventis US LCC and two were filed against Hisamitsu America Inc.

There was also an uptick in pet product class action filings in March. Three actions were filed in California against Elanco Animal Health Inc. alleging that its Seresto flea and tick product contained pesticides and other ingredients that cause seizures, thyroid gland damage, and death to the dogs and cats for which the products were marketed, as well as other harm to humans. These filings followed a March report discussing the EPA’s failure to issue warnings about the Seresto products.

(some links from Law360, subscr. req’d.)

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NAD

Health claim substantiation was front and center before NAD in a monitoring case involving Pendulum Therapeutics and a “medical probiotic” product featuring claims such as “The only medical probiotic clinically shown to lower A1C & blood glucose spikes for the dietary management of T2D*” (*Consult your physician as part of your total diabetes management plan. Results may vary from person to person.”)

The advertiser submitted a 12-week multi-center, randomized, double-blind, placebo-controlled study (the “Perraudeau Study”) to assess Pendulum Glucose Control’s safety and effectiveness in improving glycemic control in Type 2 diabetics and, ultimately, their dietary management of the disease – specifically, the role of certain probiotic strains found in prior research to be associated with the promotion of a healthy gut microbiome through the production of short-chain fatty acids (SCFAs).

The advertiser also provided clinical studies and research articles demonstrating the roles of A1C, fasting glucose and postprandial glucose levels in managing Type 2 diabetes. The advertiser also referred to the FDA’s Guidance document (Diabetes Mellitus: Developing Drugs and Therapeutic Biologics for Treatment and Prevention) to demonstrate what level of reduction in HbA1c was clinically meaningful.

While NAD expressed some concerns about the evidence, ultimately, NAD determined that the Perraudeau Study was a good fit for the challenged claim “The only medical probiotic clinically shown to lower A1C & blood glucose spikes for the dietary management of T2D*” (*Consult your physician as part of your total diabetes management plan. Results may vary from person to person.”) but recommended the following modifications: (1) limiting the claim to individuals who are taking metformin; (2) modifying the claim to clarify that the product can be used as part of the dietary management of type 2 diabetes; and (3) removing the references to percent reductions in blood glucose spikes in the absence of evidence in the record demonstrating that the reductions were clinically relevant.

This decision is a helpful discussion of the competent and reliable scientific evidence standard. Anyone seeking to understand health claims substantiation better should check it out.

FTC

Continuing with the diabetes management theme, the FTC announced a settlement with Agora Financial, LLC, a Baltimore-based company that the FTC charged tricked seniors into buying pamphlets, newsletters, and other publications that falsely promised a cure for type 2 diabetes or promoted a phony plan to help them cash in on a government-affiliated check program. In addition to the monetary judgment, which will be used to provide refunds to defrauded consumers, the proposed settlement also bars Agora and the other defendants from making such false or unsupported claims.

FDA

FDA’s pandemic-related enforcement took a new turn in February, with the issuance of warning letters to 10 companies selling dietary supplements that feature depression, anxiety, and mood-related claims. Examples of claims identified in the warning letters include the following:

• A treatment for depression, anxiety and stress
• Reduces anxiety
• Effective for mild to moderate depression
• the ONLY prebiotic that's been proven to help with anxiety
• "Constantly struggling with symptoms of anxiety and depression can have an incredibly detrimental impact on your life. . . . Our vision for the future of mental health is that we reach for probiotics as a first line of defense and even prevention for mental health issues.”
• A new natural supplement is providing relief to people across America suffering with severe anxiety and stress!’”
• “Enlifta is the only natural remedy depression supplement designed & created by a Psychiatrist.”
• For the relief of temporary depression or occasional feelings of sadness and melancholy.
• Reduce Anxiety by Affecting Serotonin

The pandemic has changed many things, but it has not changed the rules around marketing dietary supplements. If anything, companies selling in this space will want to be extra mindful of the pandemic context when crafting marketing copy.

In addition to that enforcement, FDA continued its prior COVID-related enforcement with warning letters related to subpotent and adulterated hand santizer primarily from Mexico.

Prop 65

Related to the need to kill germs, our sister blog, Kelley Green Law, featured two articles relating to EPA enforcement on disinfectant claims. One of the few areas of EPA policy continuity between the Biden and Trump eras is the aggressive enforcement attention being paid to products that claim to fight the SARS-CoV-2 coronavirus. EPA has issued “stop sale” orders to Amazon directing the company to take steps to prevent the continued sale “of potentially dangerous or ineffective unregistered pesticides and pesticide devices making illegal and misleading claims, including multiple products that claimed to protect against viruses.”

Class Action Litigation

A California federal judge tossed a proposed class action alleging the label on Walgreens' Infants' Pain & Fever Acetaminophen is false and misleading and violates California consumer protection statutes, ruling that the product's "undisputed" labeling would not be likely to confuse reasonable consumers. The plaintiff alleged that the labeling was misleading because the packaging and marketing on the infants' product misleads consumers into thinking it is specially formulated and therefore deceives them into paying more than the cost of the children's version, even though they have the exact same level of the active ingredient. In dismissing the case, the judge noted that the packaging was clearly labeled with the milligrams contained and also included a special dosing cup and syringe for use with children and infants.

Just as marketers are exploring immune system claims as of late, the plaintiffs’ bar is as well, with elderberry and immunity being challenged in California.

Dandruff brand Selsun Blue is the subject of an ingredient-related attack in the Northern District of Illinois relating to allegations that its active ingredient, selenium sulfide, causes scalp irritation and hair loss and another ingredient, preservative DMDM hydantoin, is known to slowly release formaldehyde.

Online cosmetics company Dermaset allegedly engaged in false advertising for failing to adequately disclose that consumers who pay $4.95 for shipping and handling for a 30-day free trial of cosmetics and a two-ounce free trial of cream will be enrolled in an automatic renewal offer resulting in consumers being charged recurring fees without their consent.

And if that isn’t enough for you…..

State Legislation

A California legislator introduced a bill that would restrict sale of certain weight loss supplements to anyone under age 18. Similar legislation has been considered in New York and Massachusetts.

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NAD

NAD tackled substantiation for “#1 Dermatologist Recommended” claims in a challenge involving L’Oreal’s CeraVe moisturizer and use of syndicated survey data to support related claims.

Health claim substantiation was front and center in a Council for Responsible Nutrition-led challenge involving glutathione and the level of evidence required to support claims relating to low-glutathione levels.

FTC

Indirectly related to dietary supplements and consumer care, the FTC announced a settlement with app-maker Flo regarding allegations that the company shared the health information of users with outside data analytics providers after promising that such information would be kept private.

As we noted here, the FTC has new civil penalty authority relative to false COVID-related advertising claims and practices.

FDA

As it has since relaxing the regulatory standards relative to manufacturing of hand sanitizers in March 2020, FDA continued issuing warning letters related to hand sanitizer products that contain active ingredients other than those allowed per the hand sanitizer tentative final monograph, primarily methanol, and relative to hand sanitizers that are allegedly sub-potent.

The agency also continued its enforcement relative to COVID-related claims with warning letters issued to AusarHerbs and Allimax US (joint warning letter with the FTC), as well as non-COVID-related letters to companies whose products featured claims relating to joint health, hair loss, and inflammation, which caused the products to be considered unapproved new drugs. The letters rely heavily on evidence from social media posts, blog posts, and product websites.

Prop 65

Our sister blog, Kelley Green Law, featured two Prop 65 developments that may impact certain products, including Prop 65 warnings required on products that may expose consumers to THC and a proposal to minimize use of the short form warning format. Also, although not directly in the personal care space, given the proliferation of many products that feature disinfectant claims, companies may want to note this post regarding EPA enforcement on unregistered disinfectants.

Class Action Litigation

In a significant win for the dietary supplement industry, the Ninth Circuit Court of Appeals upheld the Northern District of California’s grant of summary judgment to Target Corp., ruling that state law false advertising challenges to permissible structure/function claims are preempted by the Federal Food, Drug and Cosmetic Act. See our blog post discussing the case here.

Other highlights from courtrooms around the country include…

Southern California skincare company Yes To Inc. agreed to pay $775,000 to a proposed class of consumers to resolve allegations it misrepresented the dangers of its Grapefruit Vitamin C Glow-Boosting Unicorn Paper Mask, which was recalled after a flood of consumers reported facial skin irritation and burning. (Law360 subs. req’d.)

A California federal judge has thrown out for the last time a proposed class action alleging that Johnson & Johnson Consumer Inc. and Bausch Health US LLC misled customers about the safety of their talc products, saying even after five chances to amend the complaint, the pleadings still fall short. (Law360 subs. req’d.)

Skincare company Murad LLC was hit with a proposed class action claiming the company deceived buyers by wrongly representing its moisturizer as "oil-free" when the product actually contains oils. (Law360 subs. req’d.)

A woman suing Charlotte's Web Holdings Inc. argued that the CBD company shouldn't be able to pause or escape her proposed class action over its labeling of products as dietary supplements, saying that identifying them as such violates state and federal laws. (Law360 subs. req’d.) There are several cases involving this issue. See a recent post on this issue on Cannabis Law Update.

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