Class Action Claims Reinstated on “Adulterated” Dietary Supplements
November 25, 2019 | Marc S. Ullman | Cannabis | FDA | Legislation and Public Policy | Litigation | PharmaceuticalsThe 11th Circuit Court of Appeals recently reversed a Florida lower court decision that dismissed class action claims under the Florida Deceptive and Unfair Trade Practices Act, the Illinois Consumer Fraud and Deceptive Business Practices Act, and the New York General Business Law alleging that the defendants defrauded the putative class by selling adulterated dietary supplements containing the stimulant DMBA. The Complaint in Debernardis v. IQ Formulations, LLC did not allege that the supplements failed to perform as advertised or caused any adverse health effects, or that the plaintiffs paid a premium for the supplements; rather, the sole basis for the claims was that the products were “adulterated” under the Federal Food, Drug and Cosmetic Act (FDCA).
The FDCA expressly bans the sale of “adulterated” dietary supplements. A supplement is adulterated if: (1) it “presents a significant or unreasonable risk of illness or injury” when taken as directed; (2) it contains a “new dietary ingredient”; (3) the Secretary of Health and Human Services declares it to “pose an imminent hazard to public health or safety”; or (4) it contains a poisonous substance that renders it injurious to health. The plaintiffs in this case alleged that the dietary supplements they purchased were adulterated because they contained “new dietary ingredients,” i.e., ingredients that were not marketed in the U.S. in a dietary supplement before October 15, 1994. The definition of “adulterated” excludes new dietary ingredients which have been “present in the food supply” or for which proper notification of intent to use has been provided to the FDA, but the Complaint alleged that DMBA satisfies neither exemption.
The Florida District Court had held that the “adulteration” was not sufficient to demonstrate any economic harm to the plaintiffs absent allegations that the products were otherwise defective or did not perform as promised. Reversing, the 11th Circuit found that the FDA had explicitly determined that the use of DMBA in dietary supplements renders the products “adulterated” because DMBA is a “new dietary ingredient,” is not present in the food supply, and has never been the subject of a proper notification. As such, the 11th Circuit held that DMBA may not legally be used in dietary supplements. Reasoning that the unlawful dietary supplements are presumptively unsafe and thus presumptively worthless, the 11th Circuit reinstated the plaintiffs’ class action claims, concluding: “The plaintiffs purchased adulterated dietary supplements that they would not have purchased had they known that sale of the supplements was banned. Because the plaintiffs were deprived of the entire benefit of their bargain, we conclude they adequately alleged that they experienced economic loss.”
This case has potential implications for dietary supplement marketers and any other marketer that might place a presumptively unlawful product into the market. Companies participating in the current CBD (cannabidiol) marketing frenzy would do especially well to take note of this decision, given that the FDA has repeatedly stated that CBD is not a lawful ingredient in dietary supplements or food.
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