State-law claims pre-empted; Lanham Act claims soldier on

Pumped

A visit to the website of HBS International subsidiary Allmax is an experience. Like many of its competitors, Allmax, which creates diet and nutrition supplements for bodybuilders and other athletes, boasts a hyperkinetic web presence ‒ gigantic sans-serif fonts, vivid colors and slow-zoom effects that evoke the cinema of Michael Bay.

However, compared to their hyperkinetic web presence, an ingredients list on Allmax product labels seems nearly invisible. But one such product landed Allmax and its parent company, HBS, in Georgia’s Northern District Court on claims of deceptive advertising.

Lift-Off

Competitor Hi-Tech Pharmaceuticals Inc. sued Allmax and HBS in 2016 for allegedly misrepresenting the contents of Allmax’s “Ultra-Premium 6-Protein Blend HexaPro,” a protein-powder drink mix that targets bodybuilders. Hi-Tech charged that HBS and Allmax violated the Georgia Uniform Deceptive Trade Practices Act and the Lanham Act by misrepresenting the quantity of protein in the product and the source of that protein. Additionally, Hi-Tech claimed that the claims on the label about the source of protein were close enough typographically to claims about the overall amount of protein to mislead consumers into believing that all the protein in the product came from the same source.

In the complaint, the descriptions of various protein sources are very detailed and go into relevant specific points. Georgia’s Northern District Court granted HBS’s motion to dismiss both of Hi-Tech’s claims. The court determined that the Georgia state law claims were pre-empted by the Food, Drug, and Cosmetic Act ‒ in part for failing to establish the protein content of the product in question through an FDA-compliant test.

The district court also tossed the Lanham Act claims, holding that HexaPro’s label “provides a detailed breakdown of all … ingredients, including the mix of amino acids,” which should be enough to inform consumers.

The Takeaway

The 11th Circuit Court of Appeals affirmed the district court’s first conclusion but reversed the dismissal of the Lanham Act claims. Explaining the reversal, the 11th Circuit held that HBS was wrong to argue that Hi-Tech’s complaint was required to “provide evidence for the factual allegations” about the protein content and said the “allegations in the complaint and the undisputed product label allow the plausible inference that HexaPro’s labeling is misleading.”

Even more interesting is the 11th Circuit’s toss of another of HBS’s attacks on the Lanham claims: that “a claim under the Lanham Act is barred ‘if determining the truth or falsity of the [challenged] statement would require a court to interpret FDA regulations, which is generally left to the FDA itself.’” The circuit court disagreed here as well, maintaining that “Hi-Tech’s claim under the Lanham Act would not require a court to question the regulatory determination ‒ in this case, the method of measuring protein content in the product.” This case serves as an example of how courts will continue to wrestle with the intersection of federal and state law as well as federal agency versus judicial review of these claims.

This case also serves as a warning to companies that even if state law claims can be validly pre-empted, the Lanham Act may remain a source of law for plaintiffs to try to successfully use against their competitors.