Corbett v. PharmaCare U.S., Inc.

Decision Date19 October 2021
Docket NumberCase No.: 21cv137-GPC(AGS)
Citation567 F.Supp.3d 1172
Parties Montiqueno CORBETT, Damaris Luciano, and Rob Dobbs, individually and on behalf of all others similarly situated, Plaintiffs, v. PHARMACARE U.S., INC., Defendant.
CourtU.S. District Court — Southern District of California

Alex Rafael Straus, Milberg Coleman Bryson Phillips Grossman, PLLC, Beverly Hills, CA, Erin Johnson Ruben, Pro Hac Vice, Martha A. Geer, Pro Hac Vice, Sarah Jo Spangenburg, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman, PLLC, Raleigh, NC, Nick Suciu, III, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman, PLLC, Bloomfield Hills, MI, Rachel Soffin, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman, PLLC, Knoxville, TN, for Plaintiffs.

Giovanna Ferrari, Lawrence E. Butler, Sara M. Rogers, Seyfarth Shaw LLP, San Francisco, CA, Aaron Belzer, Seyfarth Shaw, Los Angeles, CA, Joseph J. Orzano, Seyfarth Shaw LLP, Boston, MA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT

Gonzalo P. Curiel, United States District Judge

Before the Court is Defendant's motion to dismiss the first amended complaint pursuant to Federal Rule of Civil Procedure 9(b), 12(b)(1) and 12(b)(6). (Dkt. No. 35.) Plaintiffs filed an opposition to which Defendant replied. (Dkt. Nos. 39, 41.) The Court finds that the matter is appropriate for decision without oral argument pursuant to Local Civ. R. 7.1(d)(1). Based on the reasoning below, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss.

I. FACTUAL BACKGROUND

On January 25, 2021, Plaintiffs Montiqueno Corbett ("Corbett"), Damaris Luciano ("Luciano") and Rob Dobbs ("Dobbs") (collectively "Plaintiffs") filed a putative class action complaint against Defendant PharmaCare U.S., Inc. ("Defendant" or "PharmaCare") for violations of consumer fraud statutes for its sale of Sambucol, a dietary supplement that contains a proprietary extract of black elderberry. (Dkt. No. 1, Compl. ¶ 1, 22.) Pursuant to the Court's order granting in part and denying in part Defendant's motion to dismiss the complaint, (Dkt. No. 29), Plaintiffs filed a first amended putative class action complaint ("FAC") on July 7, 2021. (Dkt. No. 31, FAC.) The operative putative first amended action complaint alleges seven causes of action based on the alleged misleading labeling, advertising and sale of twelve dietary supplement products1 ("Products") under the name Sambucol for violations of 1) California's Unfair Competition Law ("UCL") pursuant to California Business & Professions Code section 17200 et seq. on behalf of a national class and the California subclass; 2) California's False Advertising Law ("FAL") under California Business & Profession Code section 17500 et seq. on behalf of the California subclass; 3) California's Consumer Legal Remedies Act ("CLRA") under California Civil Code section 1750 et seq. on behalf of the California subclass; 4) violations of Massachusetts General Laws Chapter 93A, section 2, Mass. Gen. Laws. Ch. 93A, § 2 ("M.G.L. ch. 93A"), on behalf of the Massachusetts subclass; 5) Missouri Merchandising Practices Act ("MMPA") pursuant to Mo. Ann. Stat. section 407.010 et seq. on behalf of the Missouri subclass; 6) breach of express warranties on behalf of a national class and the subclasses; and 7) breach of the implied warranty of merchantability on behalf of a national class and the subclasses. (Dkt. No. 31, FAC.)

Elderberry is derived from a flowering plant called Sambucus which has become a popular dietary supplement, and due to the popularity of "natural remedies", has recently generated over $100 million in sales in the United States. (Id. ¶¶ 2, 3.) In March 2020, sales of the elderberry supplements increased by 415% over prior years as consumers sought to buy products that would offer "immune support" from the coronavirus. (Id. ¶ 4.) Defendant's Products contain a proprietary extract of black elderberry labeled as "Elderberry Extract." (Id. ¶ 22.)

Plaintiffs allege two theories of consumer fraud: 1) an illegal products theory; and 2) false and misleading labels, packaging and advertising theory as well as omissions claims. On the first theory, Plaintiffs claim that Defendant's Products are illegal to sell and are mislabeled as dietary supplements under the Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 321(ff), and the Dietary Supplement Health and Education Act, ("DSHEA") which passed in 1994 and established a new framework to govern the "composition, safety, label, manufacturing and marketing of dietary supplements" as well as California's Sherman Law, California Health & Safety Code section 110095, which adopted the federal labeling regulation. (Id. ¶¶ 23-27, 36.)

A dietary supplement is a "product (other than tobacco) intended to supplement the diet" and contain one or more of the following; 1) vitamins, 2) minerals, 3) herbs or other botanicals, 4) amino acid, 5) a supplement meant to increase total dietary intake, or 6) a concentrate, metabolite, constituent, extract or combination of any of the listed ingredients. (Id. ¶ 26 (citing 21 U.S.C. § 321(ff)(1).) Under the DSHEA, a "new" dietary ingredient (those not used in the United States before 1994), may be used in dietary supplements but must first be submitted to the FDA prior to sale unless the ingredient has been "present in the food supply as an article used for food without being chemically altered." (Id. ¶¶ 28, 30 (quoting 21 U.S.C. § 350b(a)(1).) A manufacturer or distributor must provide the FDA with information that demonstrates "history of use or other evidence of safety establishing that the dietary ingredient when used under the conditions recommended or suggested in the labeling of the dietary ingredient will reasonably be expected to be safe." (Id. ¶ 31 quoting 21 U.S.C. § 350b(a)(2).) After receiving information about the new dietary ingredient ("NDI"), the FDA may then determine whether the manufacturer or distributor has provided an adequate basis to conclude that the NDI is reasonably expected to be safe. (Id. ¶ 32.) Dietary supplements that contain undisclosed NDIs are "adulterated" for purposes of the FDCA. (Id. ¶ 34.) Because the elderberry extract was not marketed as a dietary ingredient in the U.S. before 1994, and is an NDI, the FAC maintains that Defendant did not notify the FDA with the required NDI notification for its elderberry extract. (Id. ¶¶ 29, 33.) As such, Plaintiffs allege that Defendant's Products are illegal to sell because the elderberry extract is adulterated and misbranded under the FDCA and California's Sherman. (Id. ¶ 36.)

On their illegal products theory, Plaintiffs allege three additional violations of the FDCA. First, they contend that Defendant, by marketing the Products as "scientifically tested", "virologist developed", "developed by a world renowned virologist", as well as advertising that the Products "support[ ] immunity" or claim "immunity support", is making implied disease claims under 21 C.F.R. § 101.93(g)(2) and misbranded under 21 U.S.C. § 343(r)(6). (Id. ¶¶ 38-42, 44, 50 (citing 21 U.S.C. § 343(r)(6) ).) Under the FDCA, these phrases improperly promise that the Products have the ability to mitigate, treat, cure, or prevent diseases. (Id. ¶ 38.) Second, Plaintiffs allege the Products are misbranded under 21 U.S.C. § 352(f)(1) because the labeling fails to include adequate directions for use and violate 21 U.S.C. § 331(a) of the FDCA. (Id. ¶¶ 57-60.) Third, Plaintiffs claim that the Products are misbranded by stating the Products have "high antioxidant levels" and fail to comply with 21 C.F.R. § 101.54(g). (Id. ¶¶ 61-69.)

Plaintiffs' second theory alleges that the claim that the Products have been "scientifically tested" is misleading and deceptive because no published studies that test the Products exist and those that do exist do not contain the same elderberry extract formulation used in published studies. (Id. ¶¶ 70-73.) Also, "scientifically tested" improperly suggests that the products are effective in keeping consumers safe from diseases which is false. (Id. ¶ 73.)

Plaintiff Corbet is a resident and citizen of San Diego, California, Plaintiff Luciano is a resident and citizen of Holyoke, Massachusetts, and Plaintiff Dobbs is a resident and citizen of Florissant, Missouri. (Id. ¶¶ 14-16.) They all purchased certain of the Products at issue after being exposed to, saw and relied on Defendant's materially misleading representations on the either the Products' packaging and labeling, on advertisements on T.V. or on websites. (Id. ¶¶ 80-102.) When they purchased the Products, they believed they were legally sold supplements and they all claim they experienced no improvement in their health after using the Products. (Id. ¶¶ 82, 83, 90, 91, 98, 99.)

Plaintiffs seek to certify a national class defined as: "During the fullest period allowed by law, all persons in the United States who purchased the Products (the ‘National Class’) for personal use and not for resale." (Id. ¶ 103.) They also seek to certify a California, Massachusetts and Missouri subclass. (Id. )

II. JUDICIAL NOTICE AND LEGAL STANDARDS
A. Request for Judicial Notice

Defendant requests judicial notice of (1) a copy of one side of a package of Sambucol's 4 oz. Black Elderberry Syrup taken from the Sambucolusa.com website on August 2, 2012; (2) the FDA's Regulations on Statements Made for Dietary Supplements Concerning the Effect of the Product on the Structure or Function of the Body, 65 Fed. Reg. 1000 (Jan. 6, 2000) ; (3) a copy of a webpage from Sambucolusa.com website on August 2, 2012; and (4) Plaintiffs' December 30, 2020 demand letter from Whitfield Bryson LLP. (Dkt. No. 35-2, D's RJN.) Plaintiffs did not file an opposition.

Under Federal Rule of Evidence 201, courts can take judicial notice of facts that are not subject to reasonable dispute because they are either generally known or can be readily determined by reference to sources...

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