In This Issue:

NAD Won’t Rename Supplement Maker

Innovix Pharma loses on product claims but gets to keep its calling card

Nerding Out

Aside from the intricacies of advertising, advertising law, and the disputes engendered therein, we tend to fall into the helplessly vanilla, middle-of-the-road category when it comes to most topics. So we’re surprised when people get exercised over things that appear to us to be random preoccupations. Are they really worked up over Civil War history? Or the relative strengths and weaknesses of Starfleet captains in Star Trek? We won’t even mention how fixated people become on wine. Or beer, for heaven’s sake.

So when we stumble across a true omega-3 supplement evangelist like Innovix Pharma, we have to suppress a slight chuckle. Because while it’s easy to imagine someone getting worked up about a diet-supplement-related topic or product, we know that such enthusiasms can lead to trouble.

And Innovix is all in on omega-3s. Check out its website: “There is a very simple reason why these are the best omega-3 supplements you can find,” founder Vin Kutty writes. “I make them for the people I love...And just like a birthday cake...a special family dinner...you don’t skimp when it comes to making something for the people who are important to you.”

With passion like this, can a dispute be far behind?

Pharma-Copier

Enter Amarin Pharma, manufacturer of Food and Drug Administration-approved cardiovascular drug Vascepa. Perhaps you can see where this is headed.

Amarin brought Innovix before the National Advertising Division challenging claims the company made about Innovix’s OmegaVia Fish Oil and OmegaVia EPA 500 dietary supplements. Amarin’s complaint focused on four key issues: (i) heart-health claims, (ii) mood-boosting claims, (iii) Innovix Pharma’s name, and (iv) safety warnings regarding dosing.

The challenges to the heart-health and mood-boosting claims received a mixed response from NAD, albeit tipped slightly in Amarin’s favor. NAD held that Innovix could not support claims that its supplement could be used to manage blood pressure and triglyceride levels. But it noted that the company could continue to make “qualified claims about EPA and DHA supplementation to support heart health in addition to a healthy diet and exercise, provided that there is a clear and conspicuous disclosure noting that the state of the science is inconclusive.”

On the mood-boosting claims, NAD found that Innovix failed to provide competent and reliable scientific evidence to support its specific claim that the product had a positive impact on users’ moods, but it found that Innovix’s general ingredient claims regarding the efficacy of its ingredients were unfounded, as well: “[T]he totality of the evidence does not support any qualified claims that the ingredients in the OmegaVia Fish Oil and OmegaVia EPA 500 confer any mood-boosting benefits in healthy individuals.”

The Takeaway

Last, but definitely not least, are Amarin’s complaints regarding Innovix’s name and labeling requirements.

Amarin argued that the name “Innovix Pharma” coupled with “pharmaceutical grade” product claims misled consumers into believing the products were drugs or could be used in place of drugs. NAD, however, disagreed, and, absent extrinsic evidence demonstrating consumer confusion, declined to recommend any name change. While occasionally NAD has required a name change without a consumer perception survey, those cases are few and far between and reserved for instances where the name is inherently false and misleading on its face. The lesson here is that if you really want to take on a trade name, it makes sense to invest in a quality survey.

NAD similarly declined Amarin’s request to have Innovix add warnings to its product labels. Because NAD’s jurisdiction “extends only to assessing the truthfulness and accuracy of advertising claims,” absent any safety claims made in Innovix’s advertising, NAD declined to recommend additional modifications here.

We’re accustomed to supplement makers getting scrutinized by the Federal Trade Commission, the FDA, and state attorneys general—not to mention before NAD itself when another company gets upset enough. But a pharmaceutical company deigning to acknowledge a supplement maker at all? That’s interesting.

Is this attack by a pharma company on a supplement manufacturer for straying out of its lane a blip or the beginning of a trend?

Company Yanks Free Jewelry Before NAD Review

Was it a flaw in the offer, or in the diamonds?

I-NAD-equate Exposition

Advertising run by Brilliant Earth Group, a manufacturer and seller of both natural and lab-grown gemstones, was challenged by competitor Blue Nile for allegedly making misleading claims regarding a diamond earring promotion.

Specifically, Blue Nile took issue with Brilliant Earth’s “Free Diamond Earrings” promotion (i) for offering lab-grown diamonds without clearly disclosing this distinction to consumers and (ii) for suggesting the offer was limited to “One Day Only!” when the same promotion had run numerous times in the preceding months.

Gaslight

During the pendency of the National Advertising Division proceedings and before NAD could render a decision on the merit of the claims, Brilliant Earth “permanently discontinued both the offer at issue and the challenged express and implied claims.”

We’ll use this opportunity to remind you about two crucial marketing rules, one general, one specific—and both germane to what (might have) happened in this case.

The Takeaway

We’ll start with the specific. The Federal Trade Commission has some fairly stringent rules regarding the marketing of synthetic gemstones. You can find them in its jewelry guides, but here’s a shortcut passage to bear in mind:

“If you sell laboratory-created diamonds, you should tell consumers that they are not mined diamonds by describing them as ‘laboratory-grown,’ ‘laboratory-created,’ ‘[manufacturer name]-created,’ or some other word or phrase of like meaning so as to disclose, immediately preceding the word ‘diamond’ and equally conspicuously, the nature of the product and the fact it is not a mined diamond.” Read more here.

Blue Nile noted that the ad included a disclosure by way of a hyperlink but asserted this was not clear and conspicuous. Often reasonable minds can differ on whether a “one click away” disclaimer is sufficient. Disclosures over the size or quality of jewelry are actually something the FTC has specifically addressed in its .com Disclosures guides. Multiple examples at the end of the guides say that this sort of information should be expressed with the main claim itself.

The other issue raised by Blue Nile was a call to action that suggested the offer was limited in time—the “one day only” claim. Blue Nile asserted this was an offer that was run “multiple times in the months preceding the challenge.” We know that a perma-offer will not pass muster, but how often the offer needs to be paused before it can be run again is not clear. There are a myriad of inconsistent state laws that relate to sales frequency. We would have loved to hear NAD’s take on this but will need to wait for another challenge since the ad here was voluntarily discontinued. In the absence of clear bright lines, it is a good idea to step back and see if your ad is not only offering a deal but also creating a false sense of urgency, and adjust accordingly.

Plaintiff Goes Nuts Over Protein Percentages

All nutrition is not created equal, claims new class action

Quality Has a Quantity

Here’s a wrinkle in food product labeling you might not have run across before: complete vs. incomplete proteins.

On the face of it, Mehva Roffman and Lisa Chong’s class action suit appears to involve the usual misleading-package labeling claims. They’re suing Perfect Bar, LLC, the maker of the eponymous wellness snacks, for claiming to stuff 15 grams of protein into its dark chocolate chip peanut butter bars and 7 grams of protein into its dark chocolate perfect peanut butter cups but failing to deliver that amount.

But the case isn’t about a simple misstatement about the number of grams of protein contained in the item; it’s about the type and quality of protein included in the snack.

I Have to Reconfigure My Diet Again?!

According to the complaint filed in California’s Northern District in late April, the Food and Drug Administration recognizes that “not all proteins are the same in their ability to meet human nutritional requirements.” Accordingly, “a simple statement about the number of grams does not actually inform consumers about how much usable protein they are receiving.” The science behind this distinction: “Some proteins are deficient in one or more of the nine amino acids essential to human protein synthesis and/or are not fully digestible within the human gut.” Once the proteins with the essential amino acids are used up, the body flushes the rest.

There’s a lot of further talk about esoteric scientific methods used by the FDA to determine protein quality, including the unimaginatively acronymed Protein Digestibility Corrected Amino Acid Score, or PDCAAS (pronounced “pee-dee-kass”), but we’ll leave that aside. The important thing is that Perfect Bar snacks utilize nut proteins, which are a purportedly lower-quality source of the nutrient.

“Although Defendant advertises its Perfect Bar in Dark Chocolate Chip Peanut Butter flavor...with a ‘15g PROTEIN’ claim,” the plaintiffs state, “it actually provides, in a form that humans can use, as little as 7.5 grams of protein, i.e., less than half the protein consumers reasonably expect to receive based on the label.”

“The FDA prohibits front label claims about the amount of protein,” the plaintiffs maintain, “unless manufacturers also provide information about the protein quality in the nutrition fact panel ‘expressed as’ a percent daily value and placed immediately adjacent to the statement of protein quantity.”

The Takeaway

Taking the plaintiffs’ accusations as true—and as of this writing, Perfect Bar has not responded to the suit—the company failed to use the proper labeling format to account for the efficacy of the proteins in its products. But what is the so what? Vegetarians and vegans know they need to be thoughtful about the quality of proteins they eat when avoiding animal sources. Bars typically utilize plant proteins, and frankly a chicken-flavored protein bar doesn’t sound particularly yummy. We hope such challenges over the quality of protein do not become the “next big thing,” but if you are making products with nonanimal proteins, it might be time to take a fresh look at your labeling and advertising.

Court Takes a Bite out of Snack Dragon’s Sausage

But false advertising claims remain in Jimmy Dean class action

Back to Basics

The ugly truth about the Snack Dragon—everyone’s favorite plaintiffs’ counsel—is that most of its suits settle quite early in the process or are dismissed altogether. (For a summary of the work this counsel hath wrought, read our article from March. And then follow the links backward, forever.)

Most of them settle or are dismissed because, as cases go, they are often quite unconventional. But that’s a bet Snack Dragon and its plaintiffs are willing to make for the occasional payday. Witness Blue Diamond’s settlement of such a suit back in April of last year, which netted class members $2 million and the attorneys over $500,000.

Our most recent Snack Dragon class action hasn’t paid out yet—but it’s survived further than most of its cases, possibly because it’s a bit pedestrian.

Against the Grain

The complaint, filed back in October 2020 in the Southern District of New York, concerns several packaging tags, including “Made With Whole Grain,*” used by Hillshire Brands Company on its Jimmy Dean English Muffin sandwich products. The complaint contains a long summary of the health benefits of whole grains, a trademark feature of Snack Dragon cases, which often rests on the premium paid by unsuspecting consumers who expect the health benefits or taste of an advertised ingredient but are deceived by the manufacturer who skimps on quality.

True to form, Snack Dragon’s named plaintiff, Christopher Wargo, alleges that Hillshire’s “Made With Whole Grain*” tag misrepresents the amount of whole grain in the product. While whole grains are included in the ingredient list, the amount is not sufficient to justify the “made with” label—as “enriched wheat flour” is the primary ingredient listed on the package. Would a reasonable consumer be misled by the “made with” label to conclude that the product was mostly made with whole grain?

A prior Second Circuit decision made things easier for the Southern District in its recent review of Hillshire’s motion to dismiss the class action. In Mantikas, the court held that plaintiffs had stated a plausible claim because the product’s labeling “falsely implied that the grain content is entirely or at least predominantly whole grain, whereas in fact, the grain component consisting of enriched white flour substantially exceeds the whole grain portion.” Here, the court found that the same principles applied.

Even Hillshire’s use of an asterisk to direct consumers to the precise quantity of whole grains in the product didn’t save its early dismissal attempt.

The Takeaway

So while the Southern District went on to dismiss every other allegation in the case—including negligent misrepresentation, breach of warranty, Magnuson Moss Warranty Act claims, fraud, and unjust enrichment—the false advertising claims regarding the tags survived preliminary review.

Unlike many of Snack Dragon’s other cases, which rest on the discrepancy between low-quality ingredients and the expectation of taste, this class action hews closely to traditional false advertising complaints and lives to tell the tale.

Claims that foods are “made with” certain ingredients or are “free of” other ingredients have long been class action fodder. When reasonable consumers see a “made with” claim, do they expect that 100% of the product has this ingredient? A majority? Some amount? Courts looking at this question often come out in different places, sometimes in cases involving the same foods. Giving consumers information is a good thing. Making changes to foods to make them better for us but still tasty should be encouraged, and food companies should be able to call out these changes. But there are still considerable risks as the packaged food industry is still unfortunately under attack. When considering “made with” claims, it may be productive for advertisers to invest in consumer perception research up front. Additionally, marketers may want to reconsider use of disclaimers to provide details and try to find room in the main claim itself as a risk-reducing option.

What’s in a Fee? And Who Needs to Know?

JetBlue and insurance partner sued for undisclosed fees

Booking Railroad

Back in April, a case from the Broward County circuit court got kicked upstairs, as it were, to Florida’s Southern District. The case, newly renamed Whiteman v. AGA Service Company, Inc. et al., raises interesting questions about how third-party promotional offers get passed along to consumers.

JetBlue customer Alan Whiteman signed on for a trip insurance policy while purchasing tickets from the airline’s website in 2019. His original state complaint outlines a number of ways that airlines generally “offer [insurance] products for sale in the retailers’ booking path, the mechanism by which consumers purchase tickets for travel.”

By the tone of the plaintiff’s summary, “offers for sale” seems more like “hijacks the sales process.” The consumer, Whiteman alleges, is “not permitted to skip the election of a travel insurance policy. Specifically, the consumer must click on a radio button to either purchase a policy or to expressly decline the purchase of a policy.”

These policies are “aggressively” marketed, with bright colors and the tag “highly recommended” festooning the “yes” choice for the product. To encourage the purchase of these policies, some airlines allegedly promote information such as “how many other consumers purchased a policy in the preceding seven days.” Sound like old-fashioned good marketing? Such tactics are increasingly being attacked under the umbrella of “dark patterns” even if they don’t involve bait and switch or other fraudulent moves.

The Takeaway

Whiteman’s current case focuses less on how the policies are sold and more on the fees themselves.

According to Whiteman, JetBlue’s insurance partner is paying the airline a significant fee to insert itself into the booking path, a practice that he believes violates the law in three ways: first, that the insurance company is violating its own policy by passing the fee on to the airline; second, that JetBlue’s undisclosed receipt of the payment is an “unfair and deceptive act and practice” under the Florida Deceptive and Unfair Trade Practices Act; and third, that the arrangement violates JetBlue’s “contract of carriage” between itself and its customers.

We know we used to always bypass such offers, but COVID has given us more reason to pause and think about protecting investments in vacations and concerts. These offers clearly provide risk-averse consumers with peace of mind, and we expect they will become even more ubiquitous. The case is still young, but we’re interested to see how it develops—whether a lead-generation offer like JetBlue’s needs to disclose the full breakdown of fees, or whether a statement of price is enough for the consumer.

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Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.