A California federal court judge has granted an application to stay class certification proceedings in a lawsuit against The Obesity Research Institutes, LLC , and its owner. Bozic v. Den Uijl, No. 16-0733 (S.D. Cal., order entered July 14, 2016). The suit claims that the defendants violated consumer-protection laws and a 2005 injunction by making efficacy claims about their supplement.
The plaintiffs argue that the defendants have violated and will continue to violate a permanent injunction, granted to the Federal Trade Commission (FTC) in 2005, prohibiting them from marketing a dietary supplement with unsubstantiated weight loss claims. They allege violations of the Unfair Competition Law and the Consumer Legal Remedies Act as well as breach of express warranty; breach of the implied warranty of merchantability; intentional misrepresentation, fraud and deceit; negligent misrepresentation; quasi-contract/unjust enrichment; and false advertising.
The defendants filed a motion to dismiss on the grounds that plaintiffs lack standing, arguing that the FTC stipulated judgment does not allow a private right of action. They also argue that plaintiffs failed to state a claim because their lack of substantiation claim is not actionable under California law. In addition, the defendants maintain that (i) the claims are barred by the doctrine of res judicata since they were previously adjudicated in putative class actions and (ii) the plaintiffs fail to state a claim because nationwide class claims cannot be based on California laws because consumer-protection laws vary by state.
Defendants applied for the stay of class certification pending resolution of their motion to dismiss. After reviewing the practical circumstances of the case, the court agreed, finding it appropriate in the interest of promoting judicial economy. See Law360, July 12 and 14, 2016.