Corbett v. Pharmacare United States, Inc.

• Citation: 544 F.Supp.3d 996
• Decision Date: 17 June 2021
• Docket Number: Case No.: 21cv137-GPC(AGS)
• Parties: Montiqueno CORBETT, Damaris Luciano, and Rob Dobbs, individually and on behalf of all others similarly situated, Plaintiffs, v. PHARMACARE U.S., INC., Defendant.
• Court: U.S. District Court — Southern District of California

544 F.Supp.3d 996

Montiqueno CORBETT, Damaris Luciano, and Rob Dobbs, individually and on behalf of all others similarly situated, Plaintiffs,

v.PHARMACARE U.S., INC., Defendant.

Case No.: 21cv137-GPC(AGS)

United States District Court, S.D. California.

Signed June 17, 2021

Alex Rafael Straus, Milberg Coleman Bryson Phillips Grossman, PLLC, Beverly Hills, CA, Erin Johnson Ruben, Pro Hac Vice, Martha A. Geer, Pro Hac Vice, Milberg Coleman Bryson Phillips Grossman, PLLC, Raleigh, NC, Nick Suciu, III, Pro Hac Vice, Barbat Mansour & Suciu 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 AND DENYING DEFENDANT'S MOTION TO STRIKE

[Dkt. No. 6.]

Gonzalo P. Curiel, United States District Judge

Defendant Pharmacare U.S., Inc. filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 9(b), 12(b)(1) and 12(b)(6) and motion to strike under Rule 12(f). (Dkt. No. 6.) Plaintiffs filed an opposition to which Defendant replied. (Dkt. Nos. 12, 17.) 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 and DENIES Defendant's motion to strike.

Background

On January 25, 2021, Plaintiffs Montiqueno Corbett, Damaris Luciano and Rob Dobbs ("Plaintiffs") filed a putative class action complaint against Defendant PharmaCare U.S., Inc. ("Defendant" or "PharmaCare") for violations of California's consumer fraud statutes for its sale of twelve dietary supplement products ("Products") under the name Sambucol that include elderberry.¹ (Dkt. No. 1, Compl. ¶ 1.) Elderberry is derived from a flowering plant called Sambucus which has become a popular dietary supplement and has recently generated $100 million in sales in the United States. (Id. ¶¶ 2, 3.)

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, California's consumer protection laws that incorporate the FDCA (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.) The complaint avers that Defendant did not notify the FDA with the required NDI notification for its elderberry extract. (Id. ¶ 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 Law. (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" are 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).) These phrases promise the Products have the ability to mitigate, treat, cure, or prevent diseases which are barred by the FDCA's requirement that a product cannot make a claim to "diagnose, mitigate, treat, cure, or prevent a specific disease or class of diseases." (Id. ) 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. ¶¶ 56-59.) 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. ¶¶ 60-68.)

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. ¶¶ 69-72.) Also, "scientifically tested" improperly suggests that the products are effective in keeping consumers safe from diseases which is false. (Id. ¶ 73.)

Plaintiffs Montiqueno Corbet is a resident and citizen of San Diego, California, Damaris Luciano is a resident and citizen of Holyoke, Massachusetts, and Rob 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. ¶¶ 79-93.) 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. ¶¶ 80, 81, 87, 88, 94, 95.)

Plaintiffs seek to certify a national class of "All persons in the United States who purchased the Products (the ‘National Class’) for personal use and not for resale."² (Id. ¶ 100.) They also seek to certify a California, Massachusetts and Missouri subclass. (Id. ) The complaint alleges claims under 1) California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code section 17200 et seq. on behalf of a national class and the California subclass; 2) California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code section 17500 on behalf of the California subclass; 3) California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code section 1750 et seq. on behalf of the California subclass; 4) Massachusetts General Laws Chapter 93A, § 2 on behalf of the Massachusetts subclass; 5) Missouri Merchandising Practices Act ("MMPA"), Mo. Ann. Stat. § 407.010 et seq. on behalf of the Missouri subclass; 6) breach of express warranty 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. (Id. ¶¶ 111-194.)

Discussion

A. Legal Standard on Federal Rule of Civil Procedure 12(b)(1)

Federal Rule of Civil Procedure ("Rule") 12(b)(1) provides for dismissal of a complaint for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). "A Rule 12(b)(1) jurisdictional attack may be facial or factual." Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039 (9th Cir. 2004). "In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction." Id. The Court "resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6) : Accepting the plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction." Leite v. Crane Co. , 749 F.3d 1117, 1121 (9th Cir. 2014) (citation omitted). "[I]n a factual attack," on the other hand, "the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air for Everyone , 373 F.3d at 1039. "In resolving a factual attack on jurisdiction," the Court "may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment." Id. The Court "need not presume the truthfulness of the plaintiff's allegations" in deciding a factual attack. Id. Once the defendant has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the plaintiff bears the burden of establishing the Court's jurisdiction. See Chandler v. State Farm Mut. Auto Ins. Co. , 598 F.3d 1115, 1122 (9th Cir. 2010).

Here, Defendant appears to make a facial challenge to subject matter jurisdiction relying on the allegations in the complaint.

B. Legal Standard on Federal Rule of Civil Procedure...