Brown v. GNC Corp. (In re GNC Corp.)

• Decision Date: 19 June 2015
• Docket Number: No. 14–1724.,14–1724.
• Citation: 789 F.3d 505
• Parties: In re GNC CORPORATION; Triflex Products Marketing and Sales Practices Litigation (No. II). Yvonne Brown; Shawn Howard, on behalf of themselves and all others similarly situated; Michael Lerma, On Behalf of Themselves and All Others Similarly Situated; Jeremy Gaatz, On Behalf of Themselves and All Others Similarly Situated; Robert Toback ; Robert Calvert ; Thomas Flowers; John J. Gross ; Justin M. George; Louis Lastres, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants, v. GNC Corporation, a Delaware Corporation; GNC Holdings, Inc.; Rite Aid Corporation, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

789 F.3d 505

In re GNC CORPORATION; Triflex Products Marketing and Sales Practices Litigation (No. II).

Yvonne Brown; Shawn Howard, on behalf of themselves and all others similarly situated; Michael Lerma, On Behalf of Themselves and All Others Similarly Situated; Jeremy Gaatz, On Behalf of Themselves and All Others Similarly Situated; Robert Toback ; Robert Calvert ; Thomas Flowers; John J. Gross ; Justin M. George; Louis Lastres, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants

v.GNC Corporation, a Delaware Corporation; GNC Holdings, Inc.; Rite Aid Corporation, Defendants–Appellees.

No. 14–1724.

United States Court of Appeals, Fourth Circuit.

Argued: March 25, 2015.

Decided: June 19, 2015.

ARGUED:Robert Jeffrey Berg, Denlea & Carton LLP, White Plains, New York, for Appellants. Joseph R. Palmore, Morrison Foerster, LLP, Washington, D.C., for Appellees. ON BRIEF:E. Duncan Getchell, Jr., Richmond, Virginia, Gordon W. Schmidt, Courtney S. Schorr, McGuireWoods, LLP, Pittsburgh, Pennsylvania, for Appellees.

Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior Circuit Judge.

Opinion

Affirmed by published opinion. Judge FLOYD wrote the opinion, in which Judge NIEMEYER and Senior Judge HAMILTON joined.

FLOYD, Circuit Judge:

Appellants are consumers who purchased joint health supplements produced and sold by GNC and Rite Aid. The supplements all contain glucosamine and chondroitin, and most contain additional purportedly active ingredients. Appellants allege that GNC and Rite Aid have violated the consumer protection laws of various states by marketing these supplements as promoting joint health, even though many scientific studies have shown that glucosamine and chondroitin are no more effective than a placebo in treating the symptoms of osteoarthritis. GNC and Rite Aid moved to dismiss the complaint for failure to state a claim, arguing that the complaint failed to adequately plead the falsity of the allegedly misleading marketing representations. The district court granted the motion in full. Because marketing statements that accurately describe the findings of duly qualified and reasonable scientific experts are not literally false, we affirm.

I.

Michael Lerma, Jeremy Gaatz, Robert Toback, Robert Calvert, Shawn Howard, Thomas Flowers, John Gross, and Justin George (collectively “Plaintiffs”) purchased a variety of joint health supplements produced by General Nutrition Corporation and GNC Holdings, Inc. (collectively “GNC”) and Rite Aid Corporation (“Rite Aid”). In putative class actions filed in federal courts in several states, they alleged that the supplements are ineffective as marketed and that GNC and Rite Aid (“the Companies”) violated various state consumer protection, deceptive advertising, and express warranty statutes by misrepresenting the effectiveness of the supplements.¹ The Judicial Panel on Multidistrict Litigation transferred three of these actions (and two tag-along actions) to the United States District Court for the District of Maryland for coordinated or consolidated pretrial proceedings. Plaintiffs' counsel established a leadership structure and filed a Consolidated Amended Complaint (CAC), at issue in this appeal.² Because this case comes to us on a motion to dismiss for failure to state a claim, we state the facts as alleged in the CAC and assume them to be true. Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 601 (4th Cir.2015).

GNC manufactures, markets, distributes, and sells a line of joint health dietary supplements under the brand name TriFlex: GNC TriFlex; GNC TriFlex Fast–Acting; GNC TriFlex Sport; and GNC TriFlex Complete Vitapak. All of the products contain the compounds glucosamine hydrochloride and chondroitin sulfate (“glucosamine and chondroitin ”). They also all contain the ingredients methylsulfonyl-methane (MSM) and hyaluronic acid (HA). TriFlex Fast–Acting and TriFlex Sport also contain a variety of purportedly beneficial herbs, including white willow bark extract, hops cones extract, and Chinese skullcap root extract. Finally, TriFlex Complete Vitapak contains tablets of TriFlex Fast–Acting along with separate fish oil, willow bark, and MSM supplements.

The TriFlex product labels represent that the supplements “promote[ ] joint mobility & flexibility,” “protect[ ] joints from wear and tear of exercise,” “rebuild[ ] cartilage and lubricate[ ] joints,” and provide “[m]aximum strength joint comfort.” J.A. 30, 189–93. The product label for TriFlex Fast–Acting also represents that the product was “[c]linically studied” by means of a “12–week multi-center, randomized, double-blind, placebo controlled study of 60 adults ... taking 250 mg/day of the GNC TriFlex Fast–Acting Blend” and was “shown to improve joint comfort and function.” J.A. 193. The TriFlex Fast–Acting label includes a chart representing that TriFlex Fast–Acting provides a 20% improvement in joint function and 25–30% improvement in joint flexibility. Id.

Rite Aid markets, distributes, and sells a line of house-brand joint health dietary supplements: Rite Aid Glucosamine /Chondroitin ; Rite Aid Natural Glucosamine /Chondroitin ; Rite Aid GlucosamineChondroitin Advanced Complex; Rite Aid GlucosamineChondroitin, Triple Strength + MSM; Rite Aid GlucosamineChondroitin + MSM; and Rite Aid GlucosamineChondroitin Advanced Complex with HA. The Rite Aid products are manufactured by GNC, and GNC is contractually obligated to indemnify Rite Aid for the claims at issue here. All of the Rite Aid products contain glucosamine and chondroitin. All of the products except Rite Aid Glucosamine /Chondroitin and Rite Aid Natural Glucosamine / Chondroitin also contain MSM, HA, and various purportedly beneficial herbs including Chinese skullcap root extract, black catechu, and boswellia serrata gum extract. All of the products represent either that they “promote[ ] joint health” or that they “help[ ] rebuild cartilage and lubricate joints.” J.A. 195–205.

The named plaintiffs purchased several of the GNC and Rite Aid products in a number of states. No plaintiff alleges that he or she was harmed by consuming the products, or that the products did not contain the advertised quantities of glucosamine and chondroitin. Rather, Plaintiffs allege that the products are incapable of providing the advertised joint health benefits, and that they would not have purchased the products but for the Companies' false advertising. They therefore bring suit on behalf of themselves and similarly situated purchasers under the consumer protection laws of their states.

Lerma, a California resident, purchased TriFlex Fast–Acting in California and brings Counts II and III under California's Unfair Competition Law, Cal. Bus. & Prof.Code § 17200 et seq., and Consumers Legal Remedies Act, Cal. Civ.Code § 1750 et seq. Gaatz, an Illinois resident, purchased TriFlex Sport in Illinois and brings Count IV under Illinois's Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. Toback, a Florida resident, purchased TriFlex Complete Vitapak in Florida and brings Count V under the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. Calvert, an Ohio resident, purchased TriFlex Fast–Acting in Ohio and brings Count VIII for breach of express warranty under Ohio's UCC, Ohio Rev.Code Ann. § 1302.26. Howard, a New York resident, purchased TriFlex Fast–Acting in New York and brings Counts VI and VII under New York's deceptive business practices statute, N.Y. Gen. Bus. Law § 349, and false advertising statute, N.Y. Gen. Bus. Law § 350. Flowers, a California resident, purchased unspecified Rite Aid products in California and brings Counts X and XI under California's Unfair Competition Law and Consumers Legal Remedies Act. Gross, a New Jersey resident, purchased unspecified Rite Aid products in New Jersey and brings Count XII under the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8–1 et seq. And finally, George, a Pennsylvania resident, purchased Rite Aid Natural Glucosamine /Chondroitin in Pennsylvania and brings Count XIII under Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat. Ann. § 201–1 et seq.

In essence, Plaintiffs allege that the various health representations made on the products' packaging are false because “the vast weight of competent and reliable scientific evidence” indicates that glucosamine and chondroitin do not provide the promised health benefits. J.A. 33. In support of this conclusion, Plaintiffs cite a number of peer-reviewed published studies that collectively show that “glucosamine and chondroitin [ ] are ineffective at treating the symptoms of osteoarthritis, whether taken alone or in combination with each other.” J.A. 23. Plaintiffs note that while the cited studies were performed on patients with arthritis, “experts in the field deem these clinical studies to be appropriate proxies for whether [glucosamine and chondroitin ] are effective for ... both arthritic and non-arthritic users of these ingredients.” Id. n. 5. Plaintiffs cite at least nine studies that are claimed to show that glucosamine, chondroitin, or both are no more effective than a placebo in relieving the symptoms of arthritis. Plaintiffs also cite two studies that purportedly show that MSM is no more effective than a placebo in relieving the symptoms of knee arthritis. The CAC does not include any allegations about the effectiveness of the herbal compounds found in the products, or cite any studies regarding the effectiveness of any of these herbal compounds at relieving the symptoms of arthritis.

The Companies moved to dismiss the CAC for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The district court granted the motion in full. The court found that the plaintiffs had failed to plead that “any reasonable expert would conclude from the cited [scientific] studies that glucosamine and chondroitin are ineffective in...