Vasic v. Patenthealth, L.L.C., No. 3:2013cv00849 - Document 88 (S.D. Cal. 2016)
Court Description: ORDER denying Defendants' 70 Motion for Summary Judgment. Parties are ordered to contact the Chambers of the assigned Magistrate Judge within three days of this Order to set new dates regulating pretrial proceedings. Signed by Judge Cynthia Bashant on 3/22/2016. (All non-registered users served via U.S. Mail Service) (jah)
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Vasic v. Patenthealth, L.L.C. Doc. 88 1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 14 DRAGAN VASIC, On Behalf of Himself and All Others Similarly Situated, ORDER DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Plaintiff, 15 [ECF No. 70] v. 16 17 Case No. 13-cv-849-BAS(MDD) PATENTHEALTH, L.L.C., et al., Defendants. 18 19 20 On April 8, 2013, Plaintiff Dragan Vasic commenced this class action arising 21 out of the advertising and sale of a glucosamine-based health supplement. On April 22 8, 2014, Plaintiff filed a Second Amended Complaint (“SAC”) against Patent 23 Health, LLC and Arthur Middleton (collectively, “Defendants”). (ECF No. 40.) 24 Defendants now move for summary judgment. Plaintiff opposes. 25 The Court finds this motion suitable for determination on the papers 26 submitted and without oral argument. See Civ. L. R. 7.1 (d)(1). For the following 27 reasons, the Court DENIES Defendants’ motion for summary judgment. (ECF No. 28 70.) –1– 13cv849 Dockets.Justia.com 1 I. BACKGROUND1 2 Between February 2006 and October 18, 2013, Defendants marketed and 3 distributed Trigosamine Maximum Strength (“Trigo MS”). (JSUF 1.) Trigo MS 4 contains Hyaluronic Acid, Glucosamine, Chondroitin Sulfate, and Vitamin D. 5 (JUSF 7.) Between December 2008 and October 18, 2013, Defendants marketed 6 and distributed Trigosamine Fast Acting (“Trigo FA”). 7 contains Hyaluronic Acid, Glucosamine and a proprietary blend of ingredients 8 called RapidFLEX, which includes Boswellia gum resin extract, Curcuma Longa 9 extract, and a standardized extract of black pepper. (JSUF 2.) (JSUF 5.) Trigo FA Plaintiff and 10 Defendants disagree about which of the ingredients in Trigo MS and Trigo FA 11 (collectively, the “Products”) are active. 12 unconditional 90-day money back guarantee that “any unused portion of the 13 Products could be returned for a full refund of the product price if the purchaser 14 was not satisfied with his or her results.” (JSUF 18.) (JSUF 4-7.) Defendants offered an 15 In connection with their Products, Defendants advertise that Glucosamin 16 “helps build and maintain healthy, protective cartilage and joints and reduces joint 17 discomfort,” and Chondoitrin Sulfate “promotes joint flexibility, lubrication, 18 comfort, and range of motion.” (Wallace Decl. Exs. A & B, ECF Mo. 70-3.) In or 19 around November 2012, Plaintiff saw Defendants’ representations of the joint- 20 related health benefits of Trigo MS when he read the product label in a Walgreen 21 store near his home in San Diego, CA. (SAC ¶ 13.) Based on the claims of the 22 product label, specifically that Trigo MS would “‘lubricate’ joints, ‘relieve’ pain, 23 and ‘build’ cartilage,” Plaintiff purchased Trigo MS for approximately $25. (Id.) 24 Plaintiff claims that Trigo MS did not provide him the benefits stated on the 25 product label, and had he “known the truth about Defendants’ misrepresentations 26 and omissions, he would not have purchased Trigo MS. (Id.) 27 28 Unless otherwise noted, the parties do not dispute the relevant facts. Facts not in dispute are included in the Joint Statement of Undisputed Facts (“JSUF”). (ECF No. 84.) 1 –2– 13cv849 1 To support his claim that these statements are false and misleading, Plaintiff 2 provides over twenty studies demonstrating that neither Glucosamine nor 3 Chondroitin Sulfate regenerate cartilage or provide joint comfort or relief from 4 pain. (SAC ¶¶ 28-49.) These studies can be broken down into several categories: 5 (1) studies regarding the effect of Glucosamine, alone, or in combination with 6 Chondroitin Sulfate, in the treatment of osteoarthritis (id. ¶¶ 28, 30-38, 43, 45, 47); 7 (2) studies regarding the effect of Glucosamine, alone, or in combination with 8 Chondroitin Sulfate, on the restoration or regeneration of cartilage or a reduced rate 9 of cartilage degeneration (id. ¶¶ 29, 33, 39-41); (3) studies regarding the effect of 10 Glucosamine, alone, or in combination with Chondroitin Sulfate, in the 11 maintenance of joints (id. ¶¶ 42, 48); (4) studies regarding the effect of 12 Glucosamine on chronic low back pain (id. ¶ 44); and (5) a study concluding that 13 “regardless of the formulation used, no marginal beneficial effects were observed as 14 a result of low Glucosamine bioavailability” (id. ¶ 46). 15 In his SAC, Plaintiff acknowledges there are two studies “purporting to claim 16 that the ingestion of Glucosamine can affect the growth or deterioration of 17 cartilage,” but attempts to discredit them on the basis that they were both sponsored 18 by a Glucosamine supplement manufacturer and the methodologies used had 19 “inherently poor reproducibility.” (SAC ¶ 49.) Plaintiff, therefore, contends that 20 these two studies are unreliable. (Id.) 21 Plaintiff also provides an expert report by Dr. Silbert (“Silbert Report”) to 22 support his claims. (ECF No. 75-1.) Dr. Silbert found it impossible for the 23 “ingestion of either” Glucosamine or Chondroitin Sulfate in isolation, together, or 24 with the ingredients found in the Products to have “any effect on cartilage or to 25 contribute in any way to control [] osteoarthritis or its symptoms.” (Silbert Report 26 ¶ 9.) Dr. Silbert found that Glucosamine and Chondroitin Sulfate reach the joints in 27 “only minuscule amounts” and have “no positive building effects.” (Id. ¶ 38.) He 28 also found that the “small amounts” of hyaluronate that “might get” to the joints –3– 13cv849 1 and cartilage “preclude any possibility of building cartilage.” (Id.) Although Dr. 2 Silbert noted the vitamin D is a “necessary component of bone and other tissues and 3 could be of value if there were a deficiency,” he also reported that vitamin D has 4 “no effect on cartilage.” (Id.) 5 On April 8, 2013, Plaintiff commenced this class action seeking an 6 injunction, restitution and disgorgement under the CLRA. (Compl. ¶ 66.) In the 7 Complaint, Plaintiff added that if Defendants “fail[ed] to rectify or agree to rectify 8 the problems associated with the actions detailed above . . . within 30 days of the 9 date of written notice pursuant to §1782 of the Act, Plaintiff will amend the 10 Complaint to add claims for actual, punitive and statutory damages as appropriate.” 11 (Id. ¶ 68.) Simultaneously with the Complaint, Plaintiff provided written notice, 12 via certified mail, to Defendants pursuant to California Civil Code section 1782. 13 (JSUF 31.) 14 Thereafter, Plaintiff amended the Complaint, adding allegations that it had 15 notified Defendants pursuant to §1782, by certified mail, and that Defendants had 16 failed to agree to rectify the problems. Plaintiff added claims for actual, punitive 17 and statutory damages. (First Amended Complaint (“FAC”) ¶ 73, ECF No. 4.) 18 Plaintiff has since amended the Complaint again. The SAC asserts claims for a 19 violation of the CLRA, California Civil Code §§ 1750, et seq., and a violation of 20 the California Business and Professions Code §§ 1720, et seq. 21 22 II. LEGAL STANDARD 23 Summary judgment is appropriate under Rule 56(c) where the moving party 24 demonstrates the absence of a genuine issue of material fact and entitlement to 25 judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 26 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive 27 law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 28 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the evidence is –4– 13cv849 1 such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 2 248. 3 A party seeking summary judgment always bears the initial burden of 4 establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 5 323. The moving party can satisfy this burden in two ways: (1) by presenting 6 evidence that negates an essential element of the nonmoving party’s case; or (2) by 7 demonstrating that the nonmoving party failed to make a showing sufficient to 8 establish an element essential to that party’s case on which that party will bear the 9 burden of proof at trial. Id. at 322-23. “Disputes over irrelevant or unnecessary 10 facts will not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. 11 Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 12 “The district court may limit its review to the documents submitted for the 13 purpose of summary judgment and those parts of the record specifically referenced 14 therein.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th 15 Cir. 2001). Therefore, the court is not obligated “to scour the record in search of a 16 genuine issue of triable fact. Kennan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996) 17 (citing Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995)). If 18 the moving party fails to discharge this initial burden, summary judgment must be 19 denied and the court need not consider the nonmoving party’s evidence. Adickes v. 20 S. H. Kress & Co., 398 U.S. 144, 159-60 (1970). 21 If the moving party meets this initial burden, the nonmoving party cannot 22 defeat summary judgment merely by demonstrating “that there is some 23 metaphysical doubt as to the material facts.” Matsushita Electric Indus. Co., Ltd. 24 V. Zenith Radio Corp., 475 U.S. 574, 586 (1986); Triton Energy Corp. v. Square D 25 Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (“The mere existence of a scintilla of 26 evidence in support of the nonmoving party’s position is not sufficient.”) (citing 27 Anderson, 477 U.S. at 252). Rather, the nonmoving party must “go beyond the 28 pleadings and by ‘the depositions, answers to interrogatories, and admissions on –5– 13cv849 1 file,’ designate ‘specific facts showing that there is a genuine issue for trial.’” 2 Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(e)). 3 When making this determination, the court must view all inferences drawn 4 from the underlying facts in the light most favorable to the nonmoving party. See 5 Matsushita, 475 U.S. at 587. 6 evidence, and the drawing of legitimate inferences from the facts are jury functions, 7 not those of a judge, [when] he [or she] is ruling on a motion for summary 8 judgment.” Anderson, 477 U.S. at 255. “Credibility determinations, the weighing of 9 10 III. DISCUSSION 11 Defendants move for summary judgment arguing: (1) Plaintiff cannot prove 12 the falsity of Defendant’s advertising claims; (2) Plaintiff did not comply with the 13 notice standard of the CLRA; (3) Plaintiff cannot prove the California Unfair 14 Competition Law (“UCL”); and (4) Plaintiff lacks standing to bring these claims. 15 The Court addresses each issue below. 16 17 A. 18 Defendants move for summary judgment of Plaintiff’s UCL and CLRA 19 claims on the basis that Plaintiff cannot plausibly prove that the statements in 20 Defendants’ advertising are false. (Defs.’ Mot. 15-16.) Relying on Murray v. 21 Elations Co., LLC, No. 13-cv-2347-BAS(WVG), 2014 U.S. Dist. LEXIS 107721 22 (S.D. Cal. Aug. 4, 2014), Defendants argue that Plaintiff fails to provide any 23 evidence of scientific studies that test Defendants’ actual Products and fails to link 24 any studies concerning osteoarthritis to Defendants’ actual representations. (Defs.’ 25 Mot. 17-20.) 26 Falsity of PatentHealth’s Advertising Claims In Murray, the plaintiffs alleged the defendant had represented that its 27 product would make joints healthier. To show this was untrue, the plaintiffs 28 showed studies that showed Glucosamine was not effective in treating –6– 13cv849 1 osteoarthritis. Relying on a series of similar cases, this Court concluded that was 2 insufficient. First, Elations never represented that its product was effective in 3 treating osteoarthritis, and, second Elations never made any representations about 4 Glucosamine, it made only representations about its product which contained 5 Glucosamine. Id.; see also McCrary v. Elations Co., LLC, 2013 WL 6402217 6 (C.D. Cal. Apr. 24, 2013); Eckler v. Wal-Mart Stores, Inc., 2012 WL 5382218 7 (S.D. Cal. Nov. 1, 2012); Otto v. Abbott Labs. Inc., 2013 U.S. Dist. LEXIS 53287 8 (C.D. Cal. Mar, 15, 2013). This case is easily distinguishable. 9 First, in this case, Defendants specifically represented that Glucosamine 10 “helps build and maintain health protective cartilage and joints, and reduces joint 11 discomfort.” (Wallace Decl. Exs. A & B.) Second, and more importantly, Plaintiff 12 provides studies in this case that look at the effect of Glucasamine and conclude 13 that it does not “relieve joint discomfort,” “lubricate joints,” and/or “build 14 cartilage.” (SAC ¶¶ 29, 33, 39-42, 46, 48.) Additionally, Plaintiff’s claims are 15 bolstered by expert witness Dr. Silber, who will testify that it is impossible for the 16 “ingestion of either” Glucosamine or Chondroitin Sulfate in isolation, together, or 17 with the ingredients found in the Products to have “any effect on cartilage or to 18 contribute in any way to control [] osteoarthritis . . . symptoms.” (Silbert Report ¶ 19 9.) Dr. Silbert found that Glucosamine and Chondroitin Sulfate reach the joints in 20 “only minuscule amounts” and have “no positive building effects.” (Id. at ¶ 38.) 21 He also found that the “small amounts” of hyaluronate that “might get” to the joints 22 and cartilage “preclude any possibility of building cartilage.” (Id.) Although Dr. 23 Silbert noted the vitamin D is a “necessary component of bone and other tissues and 24 could be of value if there were a deficiency,” he also reported that vitamin D has 25 “no effect on cartilage.” (Id.) 26 Credibility determinations and the weighing of evidence are jury functions, 27 and are not for the Court to determine on a motion for summary judgment. See 28 Anderson, 477 U.S. at 255. The Court finds that Plaintiff has produced evidence –7– 13cv849 1 that, when viewed in the light most favorably to Plaintiff as the nonmoving party, 2 sufficiently demonstrates that Glucosamine and Chondroitin sulfate are incapable of 3 the effects advertised by Defendants such that there is a genuine issue of material 4 fact. Therefore, Defendants’ Motion for Summary Judgment on this ground is 5 DENIED. 6 7 B. Notice Under the CLRA 8 Under California Civil Code § 1782(a), a plaintiff must provide notice to the 9 person alleged to have violated the CLRA at least thirty days before commencing 10 an action for damages pursuant to the CLRA. This notice must include a demand 11 that the person correct the goods alleged to violate the CLRA. Cal. Civ. Code § 12 1782(a)(2). Alternatively, a plaintiff may file suit for injunctive relief without 13 notice, give notice of intent to amend the complaint to add a claim for damages, and 14 then amend the complaint thirty days after notice, if the defendant has not agreed to 15 rectify the violations. Cal. Civ. Code § 1782(d). 16 Relying on Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939 (S.D. Cal. 17 2007), Defendants move for summary judgment on the CLRA claim for failing to 18 give notice pursuant to § 1782. Putting aside for the moment the issue of whether 19 this is more appropriate for a motion to dismiss than a motion for summary 20 judgment, the Court notes that Plaintiff’s original complaint sought preliminary and 21 permanent injunctive relief pursuant to the CLRA and indicated that if Defendants 22 failed to rectify the problems, Plaintiff would be amending to add claims for actual, 23 punitive and statutory damages, as appropriate. (Compl. ¶¶ 60, 68.) Although 24 Plaintiff sought restitution and disgorgement in the original Complaint, these do not 25 appear to be “damages” for purposes of the CLRA. See In re Mattel, 588 F. Supp. 26 2d 1111, 1119 (C.D. Cal. 2008) (Since the CLRA allows “actual damages,” 27 “punitive damages,” and “restitution,” restitution and disgorgement do not appear 28 to be “damages” for purpose of section 1782). –8– 13cv849 The Court finds Plaintiff complied with California Civil Code § 1782(d), and 1 2 Defendants’ Motion for Summary Judgment for lack of notice is DENIED. 3 4 C. UCL Claim 5 Defendants argue Plaintiff cannot prove his UCL claim because: (1) he 6 cannot prove damages because Defendant offered an unconditional 90-day money- 7 back guarantee; (2) the class is not ascertainable as a matter of law because of 8 Defendant’s money-back guarantee; and (3) Plaintiff cannot prove any prong of the 9 UCL. 10 11 1. Damages and the Money-Back Guarantee 12 A UCL action is equitable in nature, and damages cannot be recovered. 13 Korea Supply Co., v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). A 14 private plaintiff, however, may sue for injunctive relief and restitution. Stearns v. 15 Select Comfort Retail Corp., 763 F. Supp. 2d 1128, 1151 (N.D. Cal. 2010). An 16 order for restitution is one compelling a UCL defendant to return the money 17 obtained through the unfair business practice. Korea Supply, 29 Cal. 4th at 1144. 18 A private plaintiff must prove, therefore, that it has suffered an injury-in-fact. Id. 19 Thus, in Stearns, the court found the named plaintiffs who had received a refund for 20 their purchases did not have grounds to seek restitution. 21 Relying on Stearns, Defendants contend that Plaintiff cannot prove damages 22 because PatentHealth offers a 90-day satisfaction guarantee (“Guarantee”). In 23 Stearns, all but one of the named plaintiffs had already received some sort of refund 24 from the defendant company prior to litigation. Id. at 1135-37. The court found the 25 plaintiffs who had received refunds suffered no damage, but the remaining plaintiff 26 did. Id. at 1141. 27 In this case, when Defendants marketed and distributed the Products, they 28 offered an unconditional, 90-day satisfaction Guarantee that any unused portion of –9– 13cv849 1 the Products could be returned for a full refund of the Products’ price, less shipping, 2 if a person was not satisfied with the results. (Wallace Decl. Ex. E.) However, 3 both parties acknowledge that the 90-day period has long since expired, and 4 Plaintiff did not receive a refund for his purchase of Trigo MS. (Defs.’ Mot. 12; 5 Pl.’s Opp’n 12.) Therefore, this case is easily distinguishable from Stearns. See 6 also Diaz v. First Am. Home Buyers, 732 F.3d 948 (9th Cir, 2013) (offer of 7 judgment that would fully satisfy plaintiff’s claim does not render plaintiff’s claim 8 moot because the settlement offer had long since expired). 9 2. 10 Ascertainable Class 11 Defendants also rely on Stearns arguing that Plaintiff’s proposed class is not 12 ascertainable because some of the members of the class may have received a 13 refund. 14 individuals who had “used and/or purchased” the product. Stearns, 763 F. Supp. 2d 15 at 1152. The court found the class unascertainable because individuals who used 16 but did not purchase the product could not demonstrate injury. Id. Additionally, 17 the court agreed that failing to exclude individuals who received a refund or 18 replacement product made the class unascertainable. Id. (Defs.’ Mot. 15.) In Stearns, the proposed class consisted of all 19 Here, Plaintiff’s proposed class consists of “[a]ll individuals in California 20 who . . . purchased the [Products].” (SAC ¶ 56.) The proposed class is not as broad 21 as that in Stearns because it does not include individuals who merely used, but did 22 not purchase, the Products. 23 individuals who received a refund. Thus, the proposed class may be overbroad. 24 See Stearns, 763 F. Supp. 2d at 1152; Aglarin v. Maybelline, LLC, 300 F.R.D. 444, 25 455 (S.D. Cal. 2014). That said, “an over-inclusive class definition need not defeat 26 certification entirely” because the court has the discretion to narrow an overbroad 27 class to fit within the boundaries of Federal Rule of Civil Procedure 23. In re 28 NJOY, Inc. Consumer Class Action Litig., 120 F. Supp. 3d 1050, 1093 (C.D. Cal., However, the proposed class does not exclude – 10 – 13cv849 1 2015) (quoting Nat’l Fed. of the Blind v. Target Corp., No. CV 06-01802 MHP, 2 2007 WL 1223755, at *3 (N.D. Cal. Apr. 25, 2007)). It may well be that the Court 3 will need to narrow the class definition when class certification is sought. 4 However, since there is currently no class-certification motion pending, the issue is 5 not ripe. 6 3. 7 Three Prongs of the UCL 8 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 9 17200 et seq., prohibits business acts or practices that are “unlawful,” “unfair,” or 10 “fraudulent.” Id. §17200. Each of these three prongs constitutes a separate and 11 independent cause of action. See Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular 12 Tel. Co., 20 Cal. 4th 163 (1999) (citations omitted). 13 a. 14 15 Unlawful Prong The UCL’s “unlawful” prong is essentially an incorporate-by-reference 16 provision. See Cel-Tech, 20 Cal. 4th at 180 (“By proscribing ‘any unlawful’ 17 business practice, section 17200 borrows violations of other laws and treats them as 18 unlawful practices that the [UCL] makes independently actionable.” (citations and 19 some internal quotation marks omitted)). “Violation of almost any federal, state, or 20 local law may serve as the basis for a[n] [unfair competition] claim.” Plaxcencia v. 21 Lending 1st Mortg., 583 F. Supp. 2d 1090, 1098 (N.D. Cal. 2008) (citing Saunders 22 v. Super. Ct., 27 Cal. App. 4th 832, 838-39 (1994)). “When a statutory claim fails, 23 a derivative UCL claim also fails.” Aleksick v. 7-Eleven, 205 Cal. App. 4th 1176, 24 1185 (2012). Because Plaintiff can plausibly claim that the CLRA was violated, 25 summary judgment on this prong must be DENIED. 26 27 28 b. Unfair Prong Under the UCL, the California Supreme Court defined the word “unfair” to – 11 – 13cv849 1 means conduct that “threatens an incipient violation of an antitrust law, or violates 2 the policy or spirit of one of those laws because its effects are comparable to or the 3 same as a violation of the law, or otherwise significantly threatens or harms 4 competition.” Cel-Tech, 20 Cal. 4th at 187. Thus, a plaintiff must show that the 5 defendant’s conduct violated the spirit of antitrust laws, “such as horizontal price 6 fixing, exclusive dealing, or monopolization.” 7 Macy’s Inc., 16 F. Supp. 3d 1123, 1140 (S.D. Cal. 2014). Celebrity Chefs Tour, LLC v. 8 Since the issuance of Cel-Tech, lower courts have struggled to apply this rule 9 and to define the “unfair” prong in the context of consumer cases. Backus v. 10 General Mills, 122 F. Supp. 3d 909 (N.D. Cal. 2015). Although the courts are 11 directed not to apply their own purely subjective notions of unfairness, the 12 definition remains elusive. 13 Plaintiff to show “that the harm to the public from the business practice is greater 14 than the utility of the practice.” Id. (citing Rubio v. Capital One Bank, 613 F.3d 15 1195, 1205 (9th Cir. 2010)). Others have applied a “public policy test,” requiring a 16 plaintiff to show that the business practice “violates public policy as declared by 17 specific constitutional, statutory or regulatory provisions.” Id. Some have applied a “balancing test” requiring a 18 Defendants urge this court to apply “the FTC test” as laid out in Camacho v. 19 Automobile Club of Southern California, 142 Cal. App. 4th 1394 (2006). (Defs.’ 20 Mot. 14.) 21 requiring plaintiffs to show that: (1) the consumer injury was substantial, (2) the 22 injury was not outweighed by a countervailing benefits to consumers or 23 competitions, and (3) the injury must not be one that the consumers could 24 reasonably have avoided. Id. at 1403. 25 demonstrate his injury is either substantial, nor, since there was a 90-day money 26 back guarantee, can Plaintiff show the injury was one consumers could not 27 reasonably avoid. (Defs.’ Mot. 14.) However, “the Ninth Circuit has rejected the 28 use of the FTC test in the consumer context” because it focuses on “anti-consumer In Camacho, the appellate court adopted a three-prong standard, – 12 – Defendants argue Plaintiff cannot 13cv849 1 conduct” as opposed to “anti-competitive conduct.” Backus, 122 F. Supp 3d 909 2 (citing Lozano v. AT&T Wireless Servs. Inc., 504 F.3d 718, 736 (9th Cir. 2007)). 3 Ultimately, the question of whether the harm from the business practice is greater 4 than the utility of the practice or the practice violates public policy in this case is a 5 jury question. 6 ground is DENIED. Therefore, Defendants’ Motion for Summary Judgment on this 7 8 c. Fraudulent Prong 9 To state a claim under the UCL’s “fraudulent” prong, Plaintiff must prove 10 that Defendants’ allegedly fraudulent business practice is one in which “members 11 of the public are likely to be deceived.” Schnall v. Hertz Corp., 78 Cal. App. 4th 12 1144, 1167 (2000). 13 disadvantaged or vulnerable group, it is judged by the effect it would have on a 14 reasonable consumer.” Puentes v. Wells Fargo Home Mortg., Inc., 160 Cal. App. 15 4th 638, 645 (2008) (quotations omitted). “Reduced to the elements, Plaintiffs 16 must [show] with specificity that Defendant’s alleged misrepresentations: (1) were 17 relied upon by the named Plaintiffs; (2) were material; (3) influenced the named 18 Plaintiffs’ decision to purchase the product [or enter into the agreement]; and (4) 19 were likely to deceive members of the public.” Yastrab v. Apple, Inc., No. 14-cv- 20 1974-EJD, 2015 U.S. Dist. LEXIS 37119, at *19 (N.D. Cal. Mar, 23, 2015) 21 (quotations omitted). “Unless the challenged conduct targets a particular 22 Defendants argue the fact that they offer a 90 day money back guarantee 23 suggests to consumers that the product may not work for all consumers. (Defs.’ 24 Mot. 14-15.) This Court disagrees. In connection with their Products, Defendants 25 advertise that Glucosamin “helps build and maintain healthy, protective cartilage 26 and joints and reduces joint discomfort,” and Chondoitrin Sulfate “promotes joint 27 flexibility, lubrication, comfort, and range of motion.” (Wallace Decl. Exs. A & 28 B.) Plaintiff presents evidence that these statements are not true and that, had he – 13 – 13cv849 1 known these statements were not true, he would not have purchased the product. 2 This evidence is sufficient to put the issue before a jury. Hence summary judgment 3 on this prong of the UCL is DENIED. 4 5 D. Standing to Bring Causes of Action 6 Defendants argue Plaintiff lacks standing because (1) Plaintiff only relied on 7 claims on the label of Trigo-MS, therefore has no standing to assert claims 8 involving Trigo-FA; and (2) Plaintiff is, in fact, asserting “lack of substantiation” 9 claims, which cannot be brought by private plaintiffs. 10 11 1. Standing to Assert Trigo-FA Claims 12 Defendants assert that Plaintiff lacks standing to bring a UCL or CLRA claim 13 based on Trigo-FA because Plaintiff never purchased the product or read the label. 14 (Defs.’ Mot. 16-17.) This same argument was already rejected when the Court 15 denied Defendants’ motion to dismiss the FAC. (ECF No. 39.) The Court found 16 that Trigo FA and Trigo MS were “substantially similar” because they share the 17 same primary active ingredients. (Id.) 18 Defendants argue once again that the Products are substantially different 19 because they have only two out of four or five ingredients in common. (Defs.’ Mot. 20 16.) Courts have found that products with varying ingredients can nonetheless be 21 substantially similar when the same wrongful conduct is attributable to both 22 products. See Astiana v. Dreyer’s Grand Ice Cream, Inc., Nos. C-11-2910 EMC, 23 C-11-3164 EMC, 2012 WL 2990766, at *13 (N.D. Cal. July 20, 2012); Anderson v. 24 Jamba Juice Co., 888 F. Supp. 2d 1000, 1006 (N.D. Cal. 2012). Here, the Products 25 are similar in appearance and contain the same representations concerning 26 Glucosamine and Hyaluronic Acid. 27 Judgment on this ground is DENIED. Hence, Defendants’ Motion for Summary 28 – 14 – 13cv849 2. 1 “Lack of Substantiation” 2 Private individuals may not bring an action demanding substantiation for 3 advertising claims. Instead, only prosecuting authorities may require an advertiser 4 to substantiate its advertising claims. Cal. Bus. & Prof. Code § 17508; Nat’l 5 Council Against Health Fraud, Inc., v. King Bio Pharmaceuticals, Inc., 107 Cal. 6 App. 4th 1336, 1345 (2003). Prohibiting private individuals from bringing lack of 7 substantiation claims under the UCL “prevent[s] undue harassment of advertisers” 8 and provides the “least burdensome method of obtaining substantiation for 9 advertising claims.” Id. 10 As discussed above, Plaintiff provides sufficient evidence to create a general 11 issue of material fact as to the falsity of Defendants’ advertising representations. 12 Hence, Plaintiff is asserting false claims and not “lack of substantiation” claims. 13 Defendants’ Motion for Summary judgment is DENIED on this ground. 14 15 IV. CONCLUSION & ORDER 16 In light of the foregoing, Defendants’ Motion for Summary Judgment is 17 DENIED. (ECF No. 70.) As ordered previously, the parties are ordered to contact 18 the chambers of the assigned Magistrate Judge within three days of this order to set 19 new dates regulating pretrial proceedings. 20 IT IS SO ORDERED. 21 22 DATED: March 22, 2016 23 24 25 26 27 28 – 15 – 13cv849
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