Court finds veracity of study claiming effectiveness of Prevagen is an issue for trial

A single study of effectiveness is not sufficient evidence to preclude claims that a product does not produce the results claimed in marketing and on the label.

A magistrate judge found that a study purporting to show the effectiveness of a dietary supplement intended to boost memory may be relevant to a manufacturer’s defense that the product’s marketing is false or misleading, but it does not automatically preclude such claims. The judge noted that the study was extrinsic evidence and its reliability was not an issue to be taken up in a motion to dismiss and recommended that the district court deny the motions (Engerat v. Quincy Bioscience, LLC, October 8, 2019, Hightower, S.).

Product claims. Quincy Bioscience, LLC (Quincy) manufactures, markets, sells and distributes Prevagen, which is a dietary supplement made with the protein apoequorin. Prevagen advertising and labeling claim that the product supports a “sharper mind,” “clearer thinking,” and “healthy brain function” and will “improve memory within 90 days.” Three consumers brought a class action lawsuit against Quincy alleging claims under the Texas Deceptive Trade Practices Act, breach of express and implied warranties, and a violation of the Magnuson-Moss Warranty Act. The consumers allege that the advertisements regarding Prevagen were false and misleading and designed to dupe customers into purchasing a product that has no effect on the brain.

Apoequorin. According to the complaint, Prevagen’s only active ingredient, apoequorin, is a protein that when digested is broken down into amino acid constituent parts. As a result, Prevagen never reaches the bloodstream as apoequorin and the broken down amino acids are no different than any other protein such as those found in a regular diet, which do not improve memory or brain function. Further, if Prevagen did somehow enter the bloodstream as apoequorin, it cannot pass through the blood-brain barrier and therefore can have no effect on brain function. The consumers contend that there has never been an independent, randomized, controlled clinical trial subject to a peer review process that supports the products claims and that there is no scientific basis for the representations made about the product.

Extrinsic evidence. Quincy claims that a clinical drug trial was done on Prevagen that is made available on the product’s website, and on which the advertising claims are based. Based on this study, Quincy argued that all of the claims asserted should fail because the study demonstrates that the marketing statements were truthful and fully substantiated. The judge held that in a motion to dismiss, it can only look to the facts set forth in the complaint, the documents attached to the complaint, and matters of which judicial notice may be taken. Here, the consumers may have mentioned the study in their original complaint, however they never mentioned it in or attached it to their First Amended Complaint which supersedes the original complaint.

Additionally, the public records that a court generally may take judicial notice of, include things like government-provided records. A commercial website may be available to the public, but it is not a public record. Finally, the reliability of the study is a disputed issue of fact in the case and therefore, not appropriate for determination in a motion to dismiss. Therefore, the judge found that the study was extrinsic evidence that could not be considered and the argument that the claims should be dismissed based on the study were meritless.

Failure to plead. Quincy made the alternative argument that an element of each of the claims requires the consumers to show that the product did not comply with a promise made in the marketing or labeling or that the marketing or labeling were false or misleading. Quincy argued that the consumers failed to plead these claims because they could not show that the labels were false or misleading or the product didn’t live up to the claims made on the label, in light of the study. The judge noted again that it could not rely on extrinsic evidence when considering a motion to dismiss and the reliability of the study is a fact issue inappropriate at this stage. It therefore held that the motions to dismiss based on this theory should be denied.

Reconsideration of Honey Bunches of Oats false advertising claims denied

A court found that consumers failed to show why a reasonable consumer would believe Honey Bunches of Oats was sweetened primarily by honey.

In a memorandum opinion and order, a court denied consumers’ motion for reconsideration of their claims that Post Consumer Brands, LLC used deceptive packaging and advertising that led consumers to believe that Honey Bunches of Oats was sweetened primarily by honey. The court found that emphasizing the imagery of bees and honey on a product that contained honey and tasted like honey, was not deceptive (Lima v. Post Consumer Brands, LLC, October 2, 2019, Burroughs, A.).

Labeling. Two consumers purchased Honey Bunches of Oats with Almonds under the belief that the cereal was sweetened exclusively or primarily with honey. The consumers relied on television commercials and the product branding and packaging that emphasized the presence of honey. The consumers claimed that the packaging and marketing led them to expect that honey was a prominent ingredient. The consumers did not look at the ingredient list, which disclosed that honey is the cereal’s fifth most prominent sweetener. The consumers filed a putative class action against Post, alleging that the advertising and packaging of Honey Bunches of Oats was deceptive. Post filed a motion to dismiss and the court granted the motion (see Health Law Daily, Aug. 16, 2019). The consumers then filed a motion for reconsideration.

Consumer protection claims. The consumers argued that whether Post’s packaging was ambiguous was a determination of law that should not have been made at the motion to dismiss stage. They further argued that the issue of whether the consumers were reasonable to think that honey was the predominant sweetener should have been left to the jury. The court noted that it did not consider the factual matter of whether the consumers were misled by the packaging, but instead considered whether the allegations made it plausible that on a full factual record, a factfinder could reasonably regard the label as having the capacity to mislead.

The consumers further argued that they should not have had the burden of pleading why they concluded that honey was a sweetener, as opposed to a flavor. The court held that it was permissible for Post to use the images of honey and bees because honey was a characterizing flavor and the cereal included honey as an ingredient. Had the cereal not contained honey, then Post would have been required to include sufficient cautionary language explaining that it was naturally or artificially flavored. Because the cereal did contain honey, the burden shifted to the consumers to plead why the packaging and marketing would lead a consumer to believe that the cereal was not only honey flavored and contained honey, but also that honey was the primary sweetener. The consumers failed to plead why they believed honey was a sweetener and not only a flavor.

Express warranty claims. The consumers argued that the court failed to consider that an express warranty can be created through the packaging’s words and images. The court noted that it was explicit in its analysis of the use of the Honey Bunches of Oats brand name and the imagery on the packaging to determine whether Post made an express warranty. The court held that the consumer failed to demonstrate that the court’s analysis depended on a misinterpretation of law.

Request for leave to replead. The consumers asked the court to give them leave to amend to include a survey the consumers conducted relating to consumer impression of the packaging at issue. The consumer pointed to their opposition to the motion to dismiss, which contained a request that “if the Court believes any aspect of Post’s motion should be granted for a reason that has not previously been subject of amendment, Plaintiffs request leave to amend.” The court cited the circuit court in finding that “a passing request for contingent leave to file an amended complaint, made in opposition to a motion to dismiss, is insufficient, in and of itself, to bring a post-judgement motion for reconsideration within the orbit” of the requirement that courts freely give leave to amend.

Free Health Law Webinar–Lessons Learned that We Hope Not to See Repeated

It’s your last chance to register for the fourth and final free webinar in Wolters Kluwer Legal & Regulatory, U.S.’s four-part webinar series in partnership with Alston & Bird focusing on best practices for handling internal and external healthcare fraud and False Claims Act investigations.

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Lessons Learned that We Hope Not to See Repeated 
Wednesday, February 6, 2019 at 2 PM EST
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Free Health Law Webinar–Dealing with the Government, Complainants, and Whistleblowers

It’s your last chance to register for the third free webinar in Wolters Kluwer Legal & Regulatory, U.S.’s four-part webinar series in partnership with Alston & Bird focusing on best practices for handling internal and external healthcare fraud and False Claims Act investigations.

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Dealing with the Government, Complainants, and Whistleblowers 
Thursday, January 10, 2019 at 2 PM EST
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