Relying on the “firmly established law” in the California Court of Appeal’s decision in National Council Against Health Fraud, Inc., v. King Bio Pharmaceuticals, 107 Cal. App. 4th 1336 (2003), the Ninth Circuit affirmed. The court explained,
In the fourteen years since King Bio was decided, courts, including several federal district courts, have cited it to require that private citizens bringing suit under the UCL or the CLRA properly allege proof that plaintiffs sustained injury from relying on marketing statements that were actually false. These courts have precluded private citizens from bringing actions that allege that the challenged advertising language lacked proper scientific substantiation.
The court further explained that while the California Supreme Court has not directly addressed King Bio, other California Supreme Court decisions had imposed an “actual reliance” requirement on private plaintiffs in UCL and CLRA actions, which the Ninth Circuit concluded was “consistent with King Bio’s requirement that private plaintiffs . . . [bear] the burden of proving that the marketing claims are false or misleading.”
Plaintiff argued that her second amended complaint in fact alleged false misrepresentations — and not mere lack of substantiation — in at least two ways: (1) she alleged that the “clinically tested” representation falsely implied that the supplement’s benefits were supported by credible scientific proof and (2) the representation regarding the benefits of increased HGH levels falsely implied that SanMedica’s claims were supported by credible scientific proof. Explaining that such allegations were “conclusory and do nothing to support or prove the falsehood” of SanMedica’s representations, the Ninth Circuit rejected Plaintiff’s arguments.
Impact
The Kwan decision provides additional support for defendants as they continue to press courts to enforce the prohibition of “lack of substantiation” claims brought by private plaintiffs under the UCL and CLRA. Moreover, the Ninth Circuit’s decision should prompt district courts to require more at the pleading stage than mere allegations that a defendant’s product claims lack substantiation. This may require plaintiffs’ counsel to incur additional costs earlier in litigation (by, for example, performing testing and retaining experts so they may plausibly allege that a defendant’s representations are false).
Sidley Consumer Class Actions Law Practice
To receive Sidley Updates, please subscribe at www.sidley.com/subscribe.
Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.
Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.