A federal judge has awarded nearly $13 million in statutory damages and prejudgment interest in a class action lawsuit after a jury earlier this summer found Premier Nutrition Corp. engaged in deceptive acts in its marketing of a joint health supplement.
The result could have been far worse for Post Holdings Inc.’s Premier Nutrition, whose Joint Juice has been endorsed by Hall of Fame quarterback Joe Montana.
Attorneys for the named plaintiff, Mary Beth Montera, had requested $91.4 million in statutory damages. The requested amount was more than 61 times higher than the actual damages, $1.49 million.
Chief U.S. District Judge Richard Seeborg concluded the requested statutory damages were “grossly excessive.” The judge, who was nominated to the Northern District of California in 2009 by President Barack Obama, cited due process concerns under the Fourteenth Amendment to the U.S. Constitution, and he observed the plaintiff would not have been entitled to statutory damages if the case was litigated in New York state court.
The jury verdict and court judgment underscore the risks facing advertisers of dietary supplements stemming from class action lawsuits. The statutory damages award ($8.3 million) is roughly five and a half times higher than the actual damages, according to Seeborg’s Aug. 12 order entering final judgment.
Seeborg also ordered Premier Nutrition to pay $4.58 million in prejudgment interest. Timothy Blood, a lawyer for the class and managing partner in San Diego with Blood Hurst & O’Reardon LLP, said he plans to file a motion requesting attorney’s fees in the next few weeks.
Asked in an interview if he was disappointed in the judgement entered by Seeborg, Blood responded, “I’ve been doing this long enough to not be disappointed in any result. The New York Legislature specified how much money people should receive when they’re the victims of false advertising, so I wish that the court had awarded the amount that the New York Legislature had stated. But I also respect the court’s analysis.”
Blood described the judgment as a “tremendous victory.” He pointed out Premier Nutrition was ordered to pay an amount several times higher than its Joint Juice sales in New York over the relevant time.
“That’s a very significant recovery, and I think it serves the goal of showing this company that they’re going to be paying out more than they ever gained in revenue as a result of their false advertising,” Blood concluded.
‘Consumer fraud can be revealed in the courts’
The recent jury verdict is just the first of 10 cases in state and federal courts pending against Premier Nutrition in connection with its advertising of Joint Juice, which contains glucosamine and chondroitin. A case in state court in Alameda County, California, is set for trial in June 2023.
All but one of the cases has been certified as a class action, Blood said in an email, and he anticipates the pending Alameda case also will be certified. The lawsuits invoke consumer protection laws in California, Connecticut, Illinois, Maryland, Massachusetts, Michigan, New York and Pennsylvania, he said.
A lawsuit was first filed against Premier Nutrition in 2013, alleging violations of various consumer protection laws, then a specific complaint covering a class of New York consumers was filed three years later, Blood said. The 2016 complaint alleging deceptive acts cited “promises that Joint Juice will support and nourish cartilage, lubricate joints and improve joint comfort.”
According to the lawsuit, 10 meta-analyses on the clinical effects of glucosamine and/or chondroitin found “glucosamine, alone or in combination with chondroitin, does not work.”
The case against Premier Nutrition is the first “to go to trial to confirm that this stuff does not actually work, and the companies selling it are engaging in consumer fraud,” Blood told Natural Products Insider. “It’s also a broader shot across the bow of the supplement industry … While there’s certainly some supplements that work, there are a lot of supplements that don’t do anything.”
He suggested FDA and the Federal Trade Commission often don’t act against deceptive claims due to “resource limitations,” despite having the authority to do so.
“Enforcement of the false advertising laws in this area ends up falling to private enforcement, primarily through class actions,” Blood said.
The recent jury verdict demonstrates “these cases certainly can be tried successfully, and consumer fraud can be revealed in the courts,” he added. “And in the absence of any sort of robust regulatory action, there is a path to correcting these consumer frauds.”
Premier Nutrition ‘aware of changing tide in the science’
On June 7, following a nine-day trial in San Francisco in U.S. District Court, a six-person jury found Premier Nutrition engaged in a deceptive or misleading act or practice, as well as deceptive or misleading advertising, in violation of sections 349 and 350 of New York General Business Law (GBL). The jurors determined more than 166,000 units of Joint Juice were sold in New York between Dec. 5, 2013, and Dec. 28, 2021, and they calculated total damages of nearly $1.49 million.
In a motion filed two days later, attorneys for the class requested $8.3 million in statutory damages under section 349 of GBL, which provides for $50 in statutory damages per unit sold, and $83.1 million under section 350, which provides for $500 per unit sold.
In assessing the request for statutory damages, Seeborg—the federal judge overseeing the case— summed up the evidence against Premier Nutrition.
“The conduct at issue here certainly involved repeated actions, namely the choice to continue marketing its product as containing joint health benefits,” he wrote in his Aug. 12 order entering final judgment. “Despite the arrival of numerous studies pointing to a lack of benefits from glucosamine and chondroitin in the dosage at issue, Premier Nutrition continued to market its product not just to people seeking joint health benefits, but more specifically to people seeking joint pain and arthritis relief.”
According to the 2016 complaint, Premier Nutrition stated on the products’ packaging that Joint Juice contained 1,500 mg (milligrams) per serving of glucosamine hydrochloride and chondroitin sulfate.
The research suggests consumers “should take a minimum of 1,500 mg of glucosamine daily for joint health,” the complaint quoted Premier Nutrition’s marketing representations. According to the lawsuit, the company said each Joint Juice product contains the latter amount of glucosamine.
Premier Nutrition “encouraged customers to make repeat purchases, recommending that they drink a bottle a day, and with packaging that recommended purchasing on a weekly or monthly basis, depending on the size of the pack,” Seeborg wrote. Plaintiff further introduced evidence that Premier Nutrition “was aware of the changing tide in the science yet continued without hesitation,” according to the judge’s order.
Ruling ‘provides some measure of relief but does not go far enough’
Los Angeles-based litigators who defend CPG companies but were not involved in the Joint Juice lawsuit commented on its significance, including the request for, and award of, statutory damages.
“It’s only because the case is in federal court that the plaintiff could proceed with class claims for statutory damages,” Matt Orr, a partner with Amin Talati Wasserman LLP, said in an email.
In his recent judgment, Seeborg also denied Premier Nutrition’s request for judgment as a matter of law, motion to decertify the class, and request to deny plaintiff prejudgment interest. Rejecting the company’s argument that a class action is not a superior way to resolve the dispute, Seeborg wrote, “Even a recovery in the tens of thousands of dollars would not necessarily be sufficient to pursue an individual claim in this litigation, as such a recovery still ‘pales in comparison with the cost of pursuing litigation.’”
“Judge Seeborg’s decision rests on many issues of first, or limited, impression,” commented Orr, who has defended retailers and manufacturers of food, beverage, dietary supplement and cosmetic products.
Orr said he anticipates a federal appeals court will “closely scrutinize and perhaps pare down certain aspects of the decision.” Premier Nutrition, which declined to comment for this article, is expected to file an appeal with the U.S. Court of Appeals for the Ninth Circuit.
Plaintiffs in consumer class actions “have long used New York’s GBL 349 and 350 to strongarm companies into large settlements far in excess of any alleged damages,” Jasmine Wetherell, counsel in Los Angeles with the law firm Perkins Coie LLP, said. “Judge Seeborg’s decision provides some measure of relief but does not go far enough.”
“Significantly, the court’s decision recognizes that these statutory damages statutes were never intended to apply to class actions (and the law so states) and can create immense punitive consequences that are completely out of proportion to any harm suffered by the consumers,” added Wetherell, who focuses her practice on complex civil litigation. “This is especially the case in alleged false advertising class actions involving low-cost products. It is particularly significant that the court reduced the statutory damages on due process grounds, providing a check on potentially astronomical statutory damages awards.”
The litigator nonetheless cited a continuing problem: “[E]ven a reduced statutory damages award can be extreme and out of proportion to any alleged harm.”
“Indeed, the court affirmed its prior ruling that damages may be calculated on a per unit basis, and ultimately awarded statutory damages more than 5x greater than the amount of actual damages,” Wetherell observed. “Courts should take further steps to prevent the misuse of these statutes.”
Defense arguments in support of glucosamine
In its motion for judgment as a matter of law following the jury verdict, Premier Nutrition’s lawyers argued the plaintiff failed to prove the challenged claims were false or misleading. They cited the testimony of the plaintiff’s own expert, Dr. Timothy McAlindon, who “made clear that many experts believe glucosamine provides joint health benefits.”
For instance, defense lawyers quoted the trial transcript in which McAlindon acknowledged the so-called GAIT (Glucosamine/Chondroitin Arthritis Intervention Trial) found benefits of glucosamine and chondroitin in a subgroup of individuals suffering from moderate to severe pain. Defense lawyers said several published meta-analyses were “shown to Dr. McAlindon at trial, finding glucosamine is more effective than placebo (or in some instances, more effective than celecoxib or acetaminophen) for pain, function and stiffness.”
Seeborg, however, concluded “ample evidence” supported the jury’s verdict. “A reasonable jury would therefore have a legally sufficient evidentiary basis to find for the plaintiff, and the motion is therefore denied,” he stated.
While not commenting directly on the case, Natural Products Association (NPA) President and CEO Dan Fabricant—a former FDA official who oversaw the Division of Dietary Supplement Programs from 2011 to 2014—recommended that marketers of glucosamine and chondroitin supplements refrain from making sweeping pain or inflammation claims.
On the other hand, he said studies show “specific benefits to specific populations on a regimen of glucosamine/chondroitin.” Furthermore, conclusions by the National Institutes of Health (NIH) about glucosamine and chondroitin “should be reason to be bullish” on the ingredients, despite the recent jury verdict and court judgment, Fabricant added in an email.
According to NIH’s National Library of Medicine, glucosamine is “likely effective” for osteoarthritis, and chondroitin sulfate is “possibly effective” for cataracts and osteoarthritis.
Two other industry trade associations representing manufacturers of dietary supplements—the Council for Responsible Nutrition (CRN) and the Consumer Healthcare Products Association (CHPA)—declined to comment for this story.
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