Court: District Court, E.D. Michigan; November 15, 2017; Federal District Court
Plaintiff Nick Yeldo, representing a class of similarly situated individuals, contends that MusclePharm Corp. engages in deceptive marketing of its Glutamine product, claiming it promotes muscle growth and recovery, among other benefits. The court is currently considering MusclePharm's motion to dismiss and request for judicial notice, following oral arguments on November 14, 2017. The motion is partially granted and partially denied.
Yeldo purchased and used the Glutamine product over the four years prior to his lawsuit. The product's labeling and advertisements claim various benefits related to muscle growth and recovery, while Yeldo asserts that, despite glutamine being a naturally occurring amino acid important for proteins and nitrogen transport, supplementation has been shown ineffective at achieving these advertised effects. He argues that increased glutamine intake does not aid in recovery from exercise or muscle tissue enhancement.
Yeldo supports his claims with nine scientific studies indicating that glutamine supplementation does not yield beneficial effects on muscle protein synthesis or performance. Key findings include:
1. One study found no impact on muscle protein kinetics from glutamine.
2. Another study, involving continuous glutamine infusion, revealed no stimulation of muscle protein synthesis.
3. A study on exercise-trained rats showed increased plasma and muscle glutamine levels did not improve performance.
4. A study involving young adults undergoing resistance training showed no significant differences in muscle performance or body composition between those taking glutamine and those taking a placebo.
Overall, Yeldo contends that the ingestion of MusclePharm's Glutamine product has no effect on recovery or muscle enhancement, contradicting the company's marketing claims.
A fifth study assessed the impact of a supplement combining effervescent creatine, ribose, and glutamine on muscle strength, endurance, and body composition over eight weeks of resistance training. Both the experimental group and the placebo group showed improvements in strength, endurance, and fat-free mass, but no significant differences were observed between them, indicating that the supplement was not more effective than the placebo. A sixth study focused on creatine monohydrate and glutamine supplementation, finding that both supplement groups gained body and fat-free mass more significantly than the placebo group and improved muscle power production, although glutamine did not enhance these results. A seventh study, using a double-blind, placebo-controlled crossover design, found no significant enhancement in weightlifting performance after ingesting glutamine. An eighth study on glutamine's effects on acid-base balance and high-intensity exercise showed no significant differences in blood pH, bicarbonate, lactate, or fatigue time between supplement conditions. The ninth study examined the impact of oral glutamine on oxidative metabolism and cycle performance, revealing no significant differences in oxygen uptake during exercise. The plaintiff alleges that the defendant's product labeling and advertising are misleading, asserting he was misled about the product's efficacy and would not have made the purchase, or would have paid less, had he known the truth.
Plaintiff seeks certification for two classes: a National Class comprising all individuals in the U.S. who purchased the Product in the past six years, and a Michigan Subclass for those in Michigan within the same timeframe. The legal claims include breach of express warranty (Count I), negligent misrepresentation (Count III), fraud through written misrepresentation and omission, and fraudulent inducement (Count IV), along with unjust enrichment (Count V) for the National Class or the Michigan Subclass. Additionally, breach of implied warranties of merchantability and fitness (Count II) is claimed for both the implied warranty multi-state class and Michigan Subclass, with injunctive relief sought (Count VI) for the National Class.
Regarding the legal standards, under Federal Rule of Civil Procedure 12(b)(6), a court must accept the plaintiff's allegations as true and determine if they present plausible claims, avoiding dismissals based on generalized assertions or unadorned accusations. For fraud claims, Federal Rule of Civil Procedure 9(b) requires specific details about the fraud, including the time, place, content of misrepresentations, fraudulent intent, and resulting injury.
The defendant has requested the court to consider nine documents, including a court order and scientific studies referenced in the Amended Complaint, for its Motion to Dismiss, supported by Federal Rule of Evidence 201(b). The plaintiff did not oppose this request. Courts often take judicial notice of product labeling and public records in such contexts.
The Court will take judicial notice of the September 26, 2016 Order in Dabish v. MusclePharm Corp. and the accompanying Product label. Generally, matters outside the pleadings are not considered in a motion to dismiss under 12(b)(6) unless converted to a summary judgment motion. However, documents referenced in pleadings that are integral to the claims may be considered without such conversion. The nine scientific studies cited in the Amended Complaint are deemed integral to the plaintiff's claims, and the Court will consider all nine, rather than just the seven submitted by the defendant.
The Amended Complaint alleges that the Product's representations are false and misleading, supported by the cited studies. The defendant contends that these studies do not support the plaintiff's claims because they do not specifically test the combination of ingredients in question. The requirement is that studies must assess the product's active ingredients as a combination. Previous cases illustrate that reliance on studies focusing on individual ingredients, or on combinations not tested, resulted in dismissals for failure to demonstrate misrepresentation.
In particular, the Court referred to cases such as Padilla, Otto, and Eckler, where studies failed to address the combination of ingredients in the products, leading to dismissals. The defendant also referenced Dabish, where the complaint was dismissed for not providing studies that demonstrated the falsity of the Product representations. Ultimately, the Court recognizes that the plaintiff must establish a connection between the cited studies and the specific claims regarding the Product's misrepresentations.
The plaintiff argued misrepresentations regarding the health benefits of Creatine Nitrate, claiming that studies referenced only assessed safety, not efficacy, and that the efficacy studies pertained to Creatine Monohydrate, not Creatine Nitrate. The court dismissed these claims, stating that the studies did not prove any falsehoods regarding Creatine Nitrate's efficacy. Additionally, the plaintiff challenged claims about a 'loading phase' and cited studies indicating that one ingredient did not deliver the advertised benefits. The court found this claim unsubstantiated because the product contained multiple ingredients, and the studies did not evaluate the complete formulations. The plaintiff also alleged misrepresentations related to Arginine Nitrate, relying on a study that assessed only one ingredient, leading the court to dismiss the claims as the study did not address the combined efficacy of the product's ingredients.
The court noted that the case differed from previous cases since the product at issue contained only one active ingredient: Glutamine. In comparing this case to Wagner v. Gen. Nutrition Corp., the court found similarities as both cases involved claims of misleading labeling and efficacy. In Wagner, the court determined that glutamine supplementation had no measurable benefits, supporting the plaintiff's allegations that the product labels contained false information. The court rejected the defendant's argument against the studies' relevance, stating that the allegations centered on the efficacy of glutamine as it relates to the claims made on the product labels. The studies cited in the current complaint also supported the assertion that glutamine does not provide the claimed benefits, leading to the conclusion that the plaintiff's allegations were sufficient when viewed favorably.
Defendant contends that the case differs from Wagner due to the presence of studies supporting the Product's claims. It likens the situation to In re GNC Corp., where the plaintiff cited studies without alleging a scientific consensus, acknowledging some experts believed the ingredients in question were effective. The GNC Corp. court found the plaintiff's claims inadequate as they did not establish that the representations were literally false. However, in this case, the plaintiff does not concede any scientists support the effectiveness of glutamine. The defendant's reliance on selectively quoted sentences from study introductions fails to substantiate its claims, as the conclusions of those studies align with the plaintiff's arguments.
The Court refuses to evaluate the merits of the scientific findings at this stage, as it is inappropriate during a motion to dismiss. Furthermore, the Court dismisses the defendant's assertion that the plaintiff's claims require more detail about his personal experience with the Product. The plaintiff sufficiently alleges he purchased and consumed the Product, claiming he would not have done so had he known the representations were false, thus establishing monetary harm.
Lastly, the defendant argues that the breach of express and implied contract claims fail due to a lack of evidence of false representations on the Product's label. However, this argument is rejected based on the previous findings. The defendant also claims that the negligent misrepresentation claim is barred by the economic loss doctrine, which restricts tort remedies when a plaintiff experiences only economic loss from a nonperformance seller. The plaintiff argues for an exception based on the intentional tort of fraud in the inducement, as established in Huron Tool, where the court allowed such claims only if they were extraneous to the contract breach, clarifying that misrepresentations pertaining to contract performance do not constitute an independent tort.
The plaintiff in Huron filed suit against a consulting service for breach of contract, breach of warranty, fraud, and misrepresentation due to allegedly defective software. The sales contract required the defendant to provide design, programming, training, and installation services. The court determined that the allegations of fraud were not separate from the contract terms, as they pertained to the software's quality and characteristics, which were already covered by the contract and warranty. Consequently, the plaintiff was limited to contractual remedies under the UCC, leading to the dismissal of the fraud claim based on the economic loss doctrine.
Regarding the unjust enrichment claim, the defendant contended it failed because it was based on the same allegations as the warranty and fraud claims. However, since the court found the warranty and fraud claims valid, this argument did not undermine the unjust enrichment claim. The key elements of unjust enrichment require that the defendant received a benefit from the plaintiff and that the retention of this benefit results in inequity. The plaintiff argued that the defendant profited from the sale while failing to deliver the promised product benefits, thus establishing a sufficient claim for unjust enrichment.
Additionally, the plaintiff was found to have standing for injunctive relief, which requires showing an actual injury that is concrete and particularized, a causal connection to the defendant's actions, and a likelihood of redress through a favorable ruling. The court confirmed that the plaintiff met these standing requirements.
When pursuing declaratory and injunctive relief, plaintiffs must demonstrate either actual present harm or a significant likelihood of future harm to justify pre-enforcement review. The defendant argues that in false advertising cases, plaintiffs cannot claim future harm if they do not intend to repurchase the product. This is supported by the case Johnson v. Jos. A. Bank, where the court found that plaintiffs could not rely on alleged misrepresentations for future purchases, leading to a conclusion that they lacked standing for injunctive relief. Similarly, in Neuman v. L'Oreal USA, the court ruled that a plaintiff lacks standing to seek an injunction against deceptive advertising if they do not plan to repurchase the product. While some courts, particularly in California, have allowed consumers to seek injunctions despite not planning to repurchase, the prevailing view is that a lack of future injury precludes standing for injunctive relief. The plaintiff in the current case argues for standing despite abandoning the product after discovering its deceptive labeling, referencing Leiner v. Johnson, which highlights the split in judicial opinion on this matter. Courts favoring the plaintiff's view argue that denying standing would undermine the enforcement of consumer protection laws, as consumers would lose the ability to seek injunctions once they become aware of deceptions.
The Court determines it is not bound by prior cases but agrees with the reasoning in Leiner that the plaintiff has Article III standing to seek injunctive relief, considering public policy and consumer interests. The defendant contends that the plaintiff's claims are preempted by the Federal Food, Drug, and Cosmetic Act (FDCA). Preemption occurs if state claims impose labeling requirements that differ from those in 21 U.S.C. 343(q), 343(r), and associated regulations, as outlined in Gubala v. CVS Pharmacy, Inc. Claims that parallel FDCA requirements are not subject to preemption. The plaintiff's allegations of deceptive labeling align with FDCA standards and would be actionable under Michigan common law regardless of the FDCA's existence. Consequently, the plaintiff's claims are not preempted by the FDCA. Additionally, the defendant argues that the doctrine of primary jurisdiction applies, which pertains to the relationship between courts and regulatory agencies. This doctrine is relevant when court claims require resolution of issues already under the jurisdiction of an administrative body.
The doctrine of primary jurisdiction applies to cases involving factual issues outside judicial experience or requiring administrative discretion, emphasizing that specialized agencies created by Congress should handle these matters for regulatory uniformity. Such agencies are better equipped than courts due to their expertise and flexible procedures. However, this doctrine does not apply in the current case, where the plaintiff claims the defendant made false and misleading representations about its product. The determination of whether labeling and advertising are deceptive falls within the conventional experience of judges, and thus, court analysis does not disrupt the relationship with the FDA. Previous cases support this view, indicating that the primary jurisdiction doctrine is unnecessary in similar circumstances. The court has granted the defendants' request for judicial notice and partially granted their motion to dismiss, resulting in the dismissal of Count III. Additionally, the Amended Complaint references nine studies, with the defendant's request encompassing studies noted in specific footnotes.
