Fed. TRADE Comm'n v. WELLNESS SUPPORT NETWORK INC., C-10-04879 JCS
| Decision Date | 04 April 2011 |
| Docket Number | No. C-10-04879 JCS,C-10-04879 JCS |
| Parties | FEDERAL TRADE COMMISSION, Plaintiff, v. WELLNESS SUPPORT NETWORK, INC., ET AL., Defendants. |
| Court | U.S. District Court — Northern District of California |
OPINION TEXT STARTS HERE
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS COMPLAINT FILED BY DEFENDANTS WELLNESS SUPPORT NETWORK, INC., ROBERT HELD AND ROBYN HELD [Docket No. 9]
Plaintiff Federal Trade Commission ("FTC") brings this action for injunctive relief and other remedies under Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), asserting that Defendants have engaged in false advertising and deceptive practices in connection with their sale of certain dietary supplements, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) & 52. Defendants have filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("the Motion"). The parties have consented to the jurisdiction of a United States magistrate judge pursuant to 28 U.S.C. § 636(c). The Court finds that the Motion is suitable for determination without oral argument, pursuant to Civil Local Rule 7-1(b). Accordingly, the hearing set for April 8, 2011 is vacated. For the reasons stated below, the Motion is GRANTED in part and DENIED in part.
In the Complaint, the FTC alleges that Defendant Wellness Support Network, Inc. ("WSN") is a closely held California corporation with its principal place of business in Glendale, California. Complaint, ¶ 6. WSN transacts business throughout the United States, including in this District. Id. Defendant Robert Held is or has been an owner of WSN and has "formulated, directed, controlled, had the authority to control, or participated in the policies, acts, or practices of WSN, including the acts or practices alleged in [the] complaint." Id, ¶ 7. Similarly, Defendant Robyn Held is alleged to be or have been an officer of WSN who has "formulated, directed, controlled, had the authority to control, or participated in the policies, acts, or practices of WSN, including the acts or practices alleged in [the] complaint." Id., ¶ 8. Robert and Robyn Held allegedly "participated in the advertising and marketing of products for [WSN]." Id., ¶¶ 7-8.
The claims in the Complaint are based on Defendants' advertising and promotion activities in connection with two of its products, The WSN® Diabetic Pack and The WSN® Insulin Resistance Pack. Id., ¶¶ 1, 10-19. The FTC alleges that Defendants have made false statements about these products in their marketing materials. Id., ¶¶ 25, 27. With respect to The WSN® Diabetic Pack, the FTC identifies the following statements made on the WSN website:
a. Completely Natural! Diabetes Breakthrough
* * *
Lower your blood sugar, safely and effectively with absolutely NO SIDE EFFECTS!! GUARANTEED!!
[Complaint,] Exhibit ("Ex.") A, p. 1 (Excerpt from website)
b. Completely Natural! Diabetes Breakthrough* * *
Maintain normal blood sugar levels, safely and effectively with absolutely NO SIDE EFFECTS!! GUARANTEED!!
[Complaint,] Ex. B, p. 1 (Excerpt from website)
c. Nobel Prize winning technology validates WSN® Diabetic Pack ingredients! Studies show a 31.9% drop in blood sugar levels!
[Complaint,] Ex. A, p. 1 (Excerpt from website)
d. The WSN Diabetic Pack Breakthrough Benefits* Include:
Lower Blood Glucose Levels
Higher Energy Levels
Easier Weight Loss
Lower Cholesterol Levels
Higher Quality of Sleep
[Complaint,] Ex. A, p. 2 (Excerpt from website)
e. The WSN Diabetic Pack Breakthrough Benefits Include:
Helps Maintain Normal Blood Glucose Levels
Higher Energy Levels
Lose Weight More Easily
Helps Maintain Lower Cholesterol Levels
Higher Quality of Sleep
[Complaint,] Ex. B, p. 2 (Excerpt from website)
f. The WSN® Diabetic Pack also contains important botanical extracts. A recent independent clinical trial was done on one of these herbal ingredients from this amazing product. This study was done on type 2 diabetics (mildly insulin dependent) and reported an average drop of blood glucose levels of 31.9% and average weight loss of 4.8 pounds in just 30 days!
[Complaint,] Ex. A, p. 2 (Excerpt from website)
g. Nobel Prize Winning Technology Validates WSN Diabetic Pack Ingredients!
The good news is that cutting-edge science and nutrition have come together to create a truly monumental and natural breakthrough for diabetics.
Nobel Prize winning science and over 60 independent American university studies confirm the superiority of Foodform [Diabetic Pack] nutrients.
The reason the WSN Diabetic Pack works is because it operates at the cellular level and addresses a key problem that every type 2 diabetic has . . . All type 2 diabetics have a deficiency of key nutrients the body needs to support healthy blood sugar levels. Your cells simply do not process blood sugar like they should. The WSN Diabetic Pack helps your body metabolize blood sugar more efficiently.
[Complaint,] Ex. B, pp. 3-4; Ex. A contains similar statements (Excerpt from website)
With respect to The WSN® Insulin Resistance Pack, the FTC identifies the following statements made on the WSN website:
a. Completely Natural!
Insulin Resistance Breakthrough
(Also known as "Metabolic Syndrome" or "Syndrome X")
The WSN Insulin Resistance Pack is a medical food specifically formulated for the dietary management of insulin resistance.
Reverse Insulin Resistance, safely and effectively with absolutely NO SIDE EFFECTS!! GUARANTEED!!
[Complaint,] Ex. C, p. 1 (Excerpt from website)
b. Nobel Prize winning technology validates WSN Insulin Resistance Pack ingredients!
The WSN Insulin Resistance Pack Breakthrough Benefits* Include:
Reduced Insulin Resistance
Improved Utilization of Glucose
Higher Energy Levels
Easier Weight Loss
Lower Cholesterol Levels
Higher Quality of Sleep
Helps Prevent Diabetes
[Complaint,] Ex. C, p. 1 (Excerpt from website)
c. The WSN Insulin Resistance Pack also contains important botanical extracts. A recent independent clinical trial was done on one of these herbal ingredients from this amazing product. This study was done on type 2 diabetes (mildly insulin dependent) and reported an average drop of blood glucose levels of 31.9% and an average weight loss of 4.8 pounds in just 30 days!
[Complaint,] Ex. C, p. 2 (Excerpt from website)
d. Insulin resistance is a condition that if you don't take effective action against, it simply gets worse, and becomes type 2 diabetes. Unfortunately, medications only treat the symptoms and usually do nothing to address the underlying causes. The good news is that cutting-edge science and nutrition have come together to create a truly monumental and natural breakthrough for people who are insulin resistant.
Nobel Prize winning science and over 60 independent American university studies confirm the superiority of Foodform [Insulin Resistance Pack] technology . . . Your cells are insensitive to insulin and simply do not process blood sugar like they should, and the WSN Insulin Resistance Pack helps your body metabolize blood sugar more efficiently.
[Complaint,], Ex. C, p. 2 (Excerpt from website)
e. The WSN Insulin Resistance Pack is the most technologically advanced product of its kind available anywhere and was validated by the 1999 Nobel Prize for physiology.
[Complaint,] Ex. C, p. 3 (Excerpt from website)
The FTC asserts two causes of action against Defendants, one based on Defendants' allegedly deceptive claims as to the WSN Diabetic Pack, the other aimed at Defendants' allegedly deceptive claims as to the WSN Insulin Resistance Pack. Id., ¶¶ 24-27.
In Count One, the FTC asserts that the statements quoted above about The WSN Diabetic Pack represented that:
a. [The WSN Diabetic Pack] is an effective treatment for diabetes;
b. [The WSN Diabetic Pack] reduces or eliminates the need for insulin and other diabetes medications; c. Scientific studies prove that [The WSN Diabetic Pack] is an effective treatment for diabetes; and
d. [The] WSN Diabetic Pack is clinically proven to cause an average drop in blood glucose levels of 31.9%.
Id, ¶ 24. The FTC further alleges that these representations "are false or were not substantiated at the time they were made," and therefore, that the making of these representations constituted a deceptive act or practice and false advertising, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. Id, ¶ 25.
In Count Two, the FTC asserts that the statements quoted above about The WSN Insulin Resistance Pack represented that:
a. [The WSN Insulin Resistance Pack] reverses insulin resistance;
b. [The WSN Insulin Resistance Pack] manages insulin resistance;
c. [The WSN Insulin Resistance Pack] prevents diabetes;
d. Scientific studies prove that [The WSN® Insulin Resistance Pack] is an effective treatment for insulin resistance; and
e. [The WSN Insulin Resistance Pack] is clinically proven to cause an average drop in blood glucose levels of 31.9%.
Id, 1 26. The FTC further alleges that these representations "are false or were not substantiated at the time they were made," and therefore, that the making of these representations...
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