Plaintiffs law firms putting increasing pressure on claims precision
Attention to detail on labelling and claims issues is critical to avoiding potential class action settlements, an attorney told an industry gathering recently.
Justin Prochnow, a shareholder in the firm Greenberg Traurig, spoke at a meeting in Boulder, CO on Wednesday. The meeting, titled the Rocky Mountain Dietary Supplement Forum, was put on by the consulting firm FDA Compliance Group.
Prochnow cautioned that small mistakes can have big consequences when plaintiffs law firms are out there patrolling the periphery of the industry.
“We are representing at least 17 different companies in class action lawsuits,” Prochnow said.
Prochnow said being precise in claims is an important preventive action. A claim that might imply something a company didn’t mean to imply could just be inviting a demand letter, he said.
“We have seen action on ‘all natural’ claims, so many that almost no one uses that claim any more. We recommend something more focused, such as ‘made with naturally sourced ingredients.’ That at least takes the processing part out of the argument,” he said.
“We’ve seen demand letters on no added sugars, ‘Made in USA’ claims, and for a failure to put ‘from concentrates’ on the front of the label,” he said. “On ‘no added sugars,’ we are representing at least five companies on those. And if you put ‘evaporated cane juice’ on your label, you are just asking for a demand letter.”
Blueprint for ‘success’
The plaintiff’s law firms use previous successful demands from firms as a plan of action for subsequent cases, Prochnow said. So it’s a high throughput activity.
“If they’re successful on one case they’ll use that as a blueprint for 50 more cases. They are usually settling these out of court for $30,000, $40,000 or $50,000. If they settle ten of these, they just made $500,000 for a few hours work,” he said.
Prochnow said increasingly state attorneys general are getting involved in looking at claims made on dietary supplements. Companies need to know what their substantiation is for making claims, and loose approximations of what the underlying studies actually say will no longer fly.
“Making claims about ingredients and not knowing whether you have enough of that ingredient in that product to support the claim is something that raises risk,” Prochnow said.
Prochnow said all too often he has seen companies try to match their claims to what they see in the marketplace. That could work, as long as you were fortunate enough to hit on the right company to copy.
“I tell my clients, make sure you are copying from the kid who got the ‘A,’ not the one who got the ‘D,’” Prochnow said.
