Watch this case: 11th Circuit concludes ‘adulterated’ supplements are worthless and this economic loss is sufficient to sue

By Stephen Daniells contact

- Last updated on GMT

© Getty Images / Zolnierek
© Getty Images / Zolnierek

Related tags: Dietary supplements, Class action

The Court of Appeals for the Eleventh Circuit has paved the way for a potential class action against a supplement brand because of the alleged presence of an illegal ingredient, which rendered the product worthless and gave the plaintiffs standing to sue.

In the case Debernardis v. IQ Formulations, LLC​, 2019 (11th Cir. Nov. 14, 2019), plaintiffs alleged that the economic loss incurred by purchasing a dietary supplement product containing DMBA, a ‘new dietary ingredient’ that has not been the subject of a successful NDI notification with the FDA. This would make the product adulterated, according to the federal Food, Drug, and Cosmetic Act, as amended by the Dietary Supplement Health and Education Act.

The district court had granted a motion to dismiss the case for the defendants, who claimed there were no allegations that the product did not work as advertised, the plaintiffs did not suffer any adverse effects, nor did they pay a premium for the product.

However, the lower court’s decision was overturned by the Court of Appeals for the Eleventh Circuit, which stated that, “Congress through the FDCA and the DSHEA banned adulterated supplements to protect consumers from ingesting products that Congress judged to be insufficiently safe.

“The complaint’s allegations establish that the plaintiffs purchased adulterated dietary supplements that they would not have purchased had they known that sale of the supplements was banned. Because the plaintiffs were deprived of the entire benefit of their bargain, we conclude they adequately alleged that they experienced economic loss.”

The court also limited its decision to the specific facts of this case – explicitly, dietary supplements prohibited by the FDCCA and DSHEA.

IQ Formulations was contacted for comment by NutraIngredients-USA but no response had been received prior to publication.

Interesting

Commenting independently on the case, Loren Israelsen, president of the United Natural Products Alliance, told NutraIngredients-USA: “This is very early days in this case, but the theory is interesting.

“There may be a legal precedent set with this case. If successful, this could mean that if you have a product that contains a new dietary ingredient that isn’t supported by a new dietary ingredient notification, then you could be vulnerable to challenge.”

Implications for CBD?

Marc Ullman, Of Counsel for Rivkin Radler, told us that the decision warrants very close attention from any company marketing CBD in a food or dietary ingredient. "FDA has repeatedly stated that it this is not permissible and that foods and supplements containing the ingredient would be adulterated," ​he said. "The Plaintiff’s bar has already started to turn its attention to CBD products that appear to have quality issues, and this ruling would seem to put a bulls eye on the trade.  While there may still be hurdles for plaintiffs to overcome to recover any significant damages, the mere fact that the allegation of adulteration is sufficient to allow the case to survive a summary judgement motion greatly increases the incentives for plaintiffs’ lawyers looking for low hanging fruit.

"While the ruling potentially applies to every New Dietary Ingredient that cannot satisfy one of the two statutory exceptions to the part of DSHEA that classifies NDIs as adulterated we need to keep in mind that there is no private right of action under the FDCA and that a Court would likely be reluctant to determine in the first instance whether marketing is ​per se prohibited.  In the case with DMBA (and I am concerned CBD) the Court could rely on FDA clear determination that products containing DMBA are adulterated."

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