Second Circuit Rejects Claims Over Scientific Literature

The Second Circuit recently held that scientific opinions voiced during debate of unsettled questions generally cannot support false advertising or deceptive business practices claims. See ONY Inc. v. Cornerstone Therapeutics Inc., No.12-2414 (2d Cir. June 26, 2013).

Defendants in this case were various corporate sponsors, authors, and publishers of a scientific journal article comparing the effectiveness of several types of medical surfactants -- biological substances that line the surface of human lungs. Surfactants are critical to lung function: they facilitate the transfer of oxygen from inhaled air into the blood stream.  Plaintiff ONY and defendant Chiesi Farmaceutici are two of the biggest producers of surfactants for medical treatment.  These parties vigorously contested the relative effectiveness of their products – in the marketplace, in the scientific literature, and in this lawsuit. The parties agreed that two variables are particularly relevant to this comparison: mortality rate and length of stay. Mortality rate means the percentage of patients (typically infants) treated with a particular surfactant who do not survive. Length of stay refers to the amount of time a patient infant remains in the hospital for treatment.

The dispute stemmed from a study funded by Chiesi, carried out by a private research firm, and then promoted and ultimately published by three doctors, which concluded that Chiesi's surfactant product allegedly led to lower infant mortality rates than ONY's product. The doctors submitted their article to the Journal of Perinatology, a leading journal in the field of neonatology. .After the article’s publication, Chiesi issued a press release touting its conclusions and distributed promotional materials that cited the article’s findings.  Plaintiff complained that the article – and the distribution of selections from it – violated the Lanham Act and New York General Business Law § 349, and also constituted tortious injurious falsehood and interference with prospective economic advantage.

The district court concluded that plaintiff failed to state a claim based on publication of the article because the challenged statements were protected scientific opinion. The Second Circuit agreed, concluding that, as a matter of law, statements of scientific conclusions about unsettled matters of scientific debate cannot give rise to liability for damages sounding in defamation.

Plaintiff claimed that the article made statements about scientific findings that were intentionally deceptive and misleading, and that it therefore constituted false advertising. Plaintiff’s theory was that scientific claims made in print purport to be statements of fact that are falsifiable, and such statements can be defamatory or represent false advertising if known to be false when made. Plaintiff argued on appeal that the district court based its conclusion that the article’s statements were non-actionable solely on its determination that the assertions were statements of opinion, without conducting a more vigorous inquiry. 

The court of appeals noted that scientific academic discourse poses several problems for the fact-opinion paradigm of traditional First Amendment jurisprudence. Many conclusions contained in a scientific journal article are, in principle, “capable of verification or refutation by means of objective proof,” Phantom Touring, Inc. v. Affiliated Publ’ns, 953 F.2d 724, 728 n.7 (1st Cir. 1992). Indeed, it is the very premise of the scientific enterprise that it engages with empirically verifiable facts about the universe. At the same time, however, it is the essence of the scientific method that the conclusions of empirical research are tentative and subject to revision, because they represent inferences about the nature of reality based on the results of experimentation and observation. Importantly, those conclusions are presented in publications directed to the relevant scientific community, ideally in peer reviewed academic journals that warrant that research approved for publication demonstrates at least some degree of basic scientific competence. These conclusions are then available to other scientists who may respond by attempting to replicate the described experiments, conducting their own experiments, or analyzing or refuting the soundness of the experimental design or the validity of the inferences drawn from the results.

In a sufficiently novel area of research, propositions of empirical “fact” advanced in the literature may be highly controversial and subject to rigorous debate by qualified experts. Needless to say, courts are ill-equipped to undertake to referee such controversies. Instead, the trial of ideas plays out in the pages of peer-reviewed journals, and the scientific public sits as the jury.

Where, as here, a statement is made as part of an ongoing scientific discourse about which there is considerable disagreement, the traditional dividing line between fact and opinion is not entirely helpful. While statements about contested and contestable scientific hypotheses constitute assertions about the world that are in principle matters of verifiable “fact,” for purposes of the First Amendment and the
laws relating to fair competition and defamation, they are more closely akin to matters of opinion, and are so understood by the relevant scientific communities.

In that regard, said the court, it was relevant that plaintiff did not allege that the data presented in the article were fabricated or fraudulently created. If the data were falsified, the fraud might not be easily detectable by even the most informed members of the relevant scientific community. Rather, plaintiff here alleged that the inferences drawn from those data were the wrong ones, and that competent scientists would have included other data that were available to the defendant authors but that were not sufficiently taken into account in their analysis.

But when the conclusions reached by experiments are presented alongside an accurate description of the data taken into account and the methods used, the validity of the authors’ conclusions may be
assessed on their face by other members of the relevant discipline or specialty.The appeals panel therefore concluded that, to the extent a speaker or author draws conclusions from non-fraudulent data, based on accurate descriptions of the data and methodology underlying those conclusions, on subjects about which there is legitimate ongoing scientific disagreement, those statements are not grounds for a claim of false advertising. Even if the conclusions that the authors drew from the results of their data could be actionable, such claims would be suspect when, as here, the authors readily disclosed the potential shortcomings of their methodology and their potential conflicts of interest

This analysis properly reflected a worry about the chilling impact on crucial and valuable research, including comparative effectiveness research, of lawsuits by competitors who are unhappy with or disagree with the results of such studies. Such a debate belongs in the marketplace of scientific ideas, not in the court room. 

Consumer Fraud Claim on "All Natural" Beverage Rejected

One trend we are keeping an eye on here at MassTortDefense is plaintiffs' aggressive and excessive use of consumer fraud act claims, micro-analyzing every ad, turning traditional puffing into some kind of nefarious marketing scheme.  Class certification in such cases can trigger the need to think about "blackmail settlements."

So all victories are worth noting, and last week South Beach Beverage Co. Inc., maker of SoBe drinks, garnered dismissal of a California putative class action alleging false claims about their "0 Calories Lifewater" drinks. See Charles Hairston v. South Beach Beverage Co. Inc,. et al., No. 2:12-cv-01429 (C.D. Cal. 5/18/12).

SoBe manufactures a diverse range of beverages, including teas and enhanced waters, that are characterized by exotic flavor combinations and added vitamins. In his First Amended Complaint, plaintiff alleged that during the last three to four years, he regularly purchased SoBe 0 Calorie Lifewater beverages (“Lifewater”), which are no-calorie, vitamin-enhanced, flavored water drinks. Plaintiff raised three challenges to Lifewater’s labeling, which he claimed he “read and relied on.” First, plaintiff alleged that the “all natural” label was potentially deceptive because Lifewater contains “deceptively labeled ingredients” that are “synthetic or created via chemical processing.” Second, plaintiff alleged that Lifewater’s labels are potentially misleading because the names of various fruits are used to describe the different flavors of Lifewater even though Lifewater allegedly does not contain any actual fruit or fruit juice. Third, plaintiff alleged that the use of the common vitamin name (e.g., B12) on the product labels is misleading because the vitamins added to Lifewater are "synthetic" or created via chemical processing.

As is typical, plaintiffs alleged causes of action including for: (1) California Consumers Legal Remedies Act – California Civil Code §§ 1750, et seq. (“CLRA”); (2) California False Advertising Law – California Business & Professions Code §§ 17500, et seq. (“FAL”); (3) California Unfair Competition Law – California Business & Professions Code §§ 17200, et seq. (“UCL”).

Defendants argued first that the claims alleged related to the use of fruit names to describe the various flavors of Lifewater and their use of common vitamin names were preempted by the express preemption provisions in the Federal Food, Drug, and Cosmetic Act (“FDCA”) and by the specific labeling regulations promulgated by the Food and Drug Administration (“FDA”). The court concluded that plaintiff’s claims related to defendants’ use of the names of various fruits to describe the different flavors of Lifewater were indeed preempted. See, e.g., Dvora v.
General Mills, Inc., 2011 WL 1897349 (C.D. Cal. May 6, 2011) (holding that CLRA and UCL claims
were preempted where the plaintiff was challenging the use of the words “Blueberry Pomegranate”
in labeling a cereal not containing any blueberries or pomegranates because FDA regulations
explicitly permit manufacturers “to use the name and images of a fruit on a product’s packaging to
describe the characterizing flavor of the product even where the product does not contain any of
that fruit, or contains no fruit at all”); McKinnis v. General Mills, Inc., 2007 WL 4762172 (C.D. Cal.
Sept. 18, 2007) (holding that use of “Strawberry Kiwi” to designate the flavor of yogurt containing
no fruit ingredients was “permissible to demonstrate the ‘characterizing flavor’ of the product”).

The court also concluded that plaintiff’s claims related to defendants’ use of the common names
of vitamins were preempted. See, e.g., 21 C.F.R. § 101.9(c)(8)(v) (recognizing that “Vitamin C” and
“Ascorbic acid” are “synonym[s]” that may be used in the alternative in a product’s nutritional
information labeling); 21 C.F.R. § 101.9(k)(4) (stating that the FDA will consider a food
“misbranded” if its “label or labeling represents, suggests, or implies” that “a natural vitamin in food is superior to an added or synthetic vitamin”).

Significantly, the court concluded that plaintiff could not avoid preemption of these claims by arguing that his claim related solely to defendants’ “all natural” representations and that he included his fruit name and vitamin name claims only as support for his “all natural” claim. Such an argument would effectively allow a plaintiff to always avoid preemption of those claims, and would undermine the purpose of the federal labeling standards which includes avoiding
a patchwork of different state standards.  These claims were dismissed with prejudice.

Plaintiff also alleged that the “all natural” labeling on defendants’ products was potentially deceptive because the product contains “deceptively labeled ingredients” that are
“synthetic or created via chemical processing.” However, plaintiff could not state a claim under the
CLRA, FAL, or UCL regarding defendants’ allegedly deceptive “all natural” labeling because once
the preempted statements regarding fruit names and vitamin labeling were removed, plaintiff’s claim is based on a single out-of-context phrase found in one component of Lifewater’s label.

The court concluded that plaintiff’s selective interpretation of individual words or phrases from a product’s labeling could not support a CLRA, FAL, or UCL claim. See, e.g., Carrea v. Dreyer’s Grand Ice Cream, 2012 WL 1131526 (9th Cir. Apr. 5, 2012).  Lifewater’s label did not simply state that it is “all natural” without elaboration or explanation. Instead, the “all natural” language was immediately followed by additional statements, like “with vitamins” or “with B vitamins.”  Lifewater did not use the “all natural” language in a vacuum. Thus, it was impossible for plaintiff to allege how the “all natural” language would be deceptive without relying on the preempted statements regarding fruit names and vitamins.

In addition, the court concluded that no reasonable consumer would read the “all natural”
language as modifying the “with vitamins” language and somehow believe that the added vitamins are suppose to be “all natural vitamins.”  Moreover, to the extent there was any ambiguity, it was  clarified by the detailed information contained in the ingredient list, which explained the exact contents of Lifewater. In this case, the ingredient list was consistent with the front label statement of “all natural with vitamins.”

The court concluded that the challenge to the “all natural” language on Lifewater was not deceptive as a matter of law.

 

State Committee Misses Opportunity for Class Action Reform

Readers of MassTortDefense recognize that one of the most challenging jurisdictions for potential class actions defendants is California, given the substantive law, some state courts' take on certification issues, and the aggressive plaintiffs' bar.  It is no surprise that advocates of a balanced and appropriate role for class actions have from time to time attempted legislative reform in this state.

One idea that has been proposed is a requirement that class action advertisements (and there are plenty) include appropriate disclosures that potential plaintiffs could be liable for attorneys’ fees if a defendant prevails.

Unfortunately, the state Assembly's Judiciary Committee last week rejected such a proposal in a vote along party lines.  Proposed A.B. 1954 would have required ads soliciting plaintiffs for a class action to disclose that they might be held responsible for part of a defendant's legal fees if the defendant prevails under certain conditions. The legislation also would have permitted the state's Department of Consumer Affairs to impose a fine of up to $2,000 for an ad that failed to include the notice provision.

Supporters of the bill expressed concern about what they see as a flood of class action solicitations, which are seen as a serious impediment to doing business in California.  The bill was supported by the Civil Justice Association of California and the California Building Industry Association, as well as the California Chamber of Commerce.  Our readers know that some potential plaintiffs see class actions like purchasing a lottery ticket - no risk, high reward.  Opponents argued that in the state, orders directing named plaintiffs of a class to pay for a prevailing defendant’s fees happens only in rare cases. But it can and does happen, and what's wrong with letting potential plaintiffs know this? Such a bill would increases transparency and thus protect consumers; it might cut down on the number of "shakedown" class actions that only disclose promises of huge settlements without the potential other side of the coin. 

 

House Hearing on Food Marketing to Kids -- Seller Beware

Two subcommittees of the House Energy and Commerce Committee, the Subcommittee on Commerce, Manufacturing, and Trade and the Subcommittee on Health, held a joint hearing last week on the issue of “Food Marketing: Can ‘Voluntary’ Government Restrictions Improve Children’s Health?”

Speakers came from the CDC, the U.S. Department of Agriculture, the FTC, Campbell Soup Company, and the Association of National Advertisers.

The background of the hearing is that the 2009 Consolidated Appropriations Act contained report language forming an Interagency Working Group (IWG), comprised of the Federal Trade Commission, the Department of Health and Human Services, and the Department of Agriculture. The IWG was tasked with conducting a study and issuing a report to Congress concerning standards for marketing food to children.  Instead of conducting the prescribed study or providing a report to Congress, the IWG issued a document entitled “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”

The document presented a a sweeping set of “voluntary” principles for marketing foods to kids,  based on nutritional standards that exceed and conflict with those of other government programs. They also reflect a tenuous grasp of science, lacking evidence, critics say, showing that childhood obesity is related to advertising of food that doesn’t comply with the proposed principles.  The guidelines are so restrictive that many healthy foods, like low-fat yogurts, whole wheat bread, and 2% milk could not be marketed to those 17 and under. Even non-sweetened cereals would not meet the IWG guidelines.  According to one analysis, 88 out of the 100 most advertised foods and drinks would be in violation of these standards.

Regardless of whether a child sees a commercial for an item, the ultimate purchasing decision rests with the parent who purchases the groceries – and those groceries carry nutrition labels that every parent can read.  Of course, this is the nanny state rearing its head again. And there are serious issues of infringement of constitutionally protected commercial speech.

But a legitimate concern to our readers is that while these guidelines are labeled as voluntary, what happens when a litigious group sues a food manufacturer because it showed a commercial advertising a new kind of chocolate treat or drink that does not comply?  Our readers are surely familiar with example of courts allowing plaintiff experts to note "voluntary" or "recommended" guidelines.

FDA Proposes Regs on Direct-to-Consumer Prescription Drug Ads

The Food and Drug Administration has proposed to amend its regulations concerning direct-to-
consumer (DTC) advertisements of prescription drugs. Specifically, the proposed rule would implement a new requirement of the Federal Food, Drug, and Cosmetic Act, added by the Food and Drug Administration Amendments Act of 2007 (FDAAA), that the major statement in DTC television or radio advertisements relating to the side effects and contraindications of an advertised prescription drug intended for use by humans be presented in a clear, conspicuous, and neutral manner. See 75 Fed. Reg. 15,376 (3/29/10). FDA is also proposing standards that the agency would consider in determining whether the major statement in these advertisements is presented in the manner required by FDAAA.

Readers of MassTortDefense know how DTC ads have impacted products litigation, from effects on the learned intermediary doctrine, to influence on the jury pool, to forming part of the basis of substantive information-based claims.

Under the current regulations the presentation of risk information in an advertisement for a prescription human or animal drug is required to be comparable in prominence and readability to the presentation of effectiveness information in the advertisement. If an advertisement presents effectiveness information in a clear and conspicuous manner, risk information is required to be presented in a comparable manner.  The new proposal would require disclosure of the major side effects and contraindications of the drug in a clear, conspicuous, and neutral manner, regardless of the manner in which effectiveness information is presented in the advertisement.

The proposed regulations would define the required clear, conspicuous, and neutral manner, as being met if:

1. Information is presented in language that is readily understandable by consumers;
2. Audio information is understandable in terms of the volume, articulation, and pacing used;
3. Textual information is placed appropriately and is presented against a contrasting background for sufficient duration and in a size and style of font that allows the information to be read easily; and
4. The advertisement does not include distracting representations (including statements, text, images, or sounds or any combination thereof) that detract from the communication of the major
statement.

FDA said it recognizes that these standards require judgment in their application. Therefore, the agency does not intend to prescribe a set formula for ‘‘clear, conspicuous, and neutral’’ major
statements because there is more than one way to achieve these standards in a television or radio ad. FDA intends to be flexible enough to consider the variety of techniques sponsors may use to appropriately convey required risk information in prescription drug ads. Sponsors have the flexibility to be creative in designing their ads as long as all of the standards listed here are complied with such that the major statement is communicated effectively to consumers and the overall message
that the advertisement conveys to consumers is accurate and non-misleading.

Comments on the proposed rule are due by June 28, 2010.

Device Group Comments on FDA Draft Guidance on Risk Information

Readers of MassTortDefense know how FDA regulatory treatment of advertising and promotion can impact product liability litigation involving drugs and medical devices. Earlier this year, the FDA issued draft Guidance for Industry Presenting Risk Information in Prescription Drug and Medical Device Promotion.  This draft guidance describes factors FDA considers when evaluating advertisements (ads) and promotional labeling for prescription drugs, ads for restricted medical devices, and promotional labeling for all medical devices for their compliance with the Federal Food, Drug, and Cosmetic Act and relevant regulations. The draft guidance discusses factors that are relevant to the disclosure of risk information and provides numerous examples to illustrate FDA’s thinking on these factors. The recommendations contained in this draft guidance apply to promotional materials directed to both consumers and healthcare professionals.

As the comment period has drawn to a close, the medical device trade group AdvaMed has weighed in, arguing that the FDA's draft guidance on presentation of risk information in advertisements fails to adequately distinguish between devices and drugs.  The group asserts that the draft lacks content and specificity for device makers, and that a separate guidance document for medical devices is probably warranted. One example is the discussion in the draft of the important concept of over-warning, which is done solely with drug examples.

The comments also not the inherent differences between drugs as therapy and a device which requires a separate intervention (surgery) to be used. Because devices are often used in conjunction with other devices and drugs, communications with consumers of medical devices may need to focus more on a broader spectrum of risks and benefits of ongoing therapies, with a larger group of health care professionals.

AdvaMed also questions the draft's notion that risk information should be spread throughout a promotional piece, rather than located in one easy spot for the consumer to find.  Overall, the draft appears to focus on risk information without adequately discussing the intersection with benefit information.

The group agrees with a move towards the "reasonable consumer" standard for evaluating promotional pieces, and suggests the same direction be taken with DTC advertisements. Highly trained regulators cannot easily evaluate DTC ads as would an average consumer.   Finally, the group argues the draft should provide more specific guidance on use of the Internet for promotion, and the use of hyperlinks.  Increasingly the Internet is a source of information for medical consumers.

 

 

Senate Panel Holds Hearing on DTC Advertising of Medical Devices

The U.S. Senate Special Committee on Aging held a hearing last week to examine issues related to direct-to-consumer (DTC) advertising for medical devices. The amount of medical device advertising directed to consumers on television or over the Internet was an estimated $193 million last year, a figure that is a small fraction of the volume of consumer advertising for prescription drugs. Yet, device DTC is getting increased attention.

At the hearing, medical, advertising, and consumer experts shared with the committee their opinions about DTC medical device advertisements, including whether health risks are appropriately conveyed to consumers. The hearing was called by liberal Democratic Committee Chairman Herb Kohl (D-WI), who has apparently already decided that Congress ought to be prepared to call for a future moratorium on DTC ads for new medical devices.

Dr. Daniel Schultz, the director of the Center for the Center for Devices and Radiological Health (CDRH) at the FDA, discussed the current status of their enforcement activities related to DTCA for medical devices. The CDRH is the division of the FDA responsible for the regulation of restricted medical device advertisements.

The head of Advanced Medical Technology Association (AdvaMed), related the organization’s current policy on DTC advertising and reaffirmed the medical technology industry’s strong support for truthful, non-misleading advertising of its innovative products. AdvaMed believes that in addition to being truthful and not misleading, all DTC advertising should use consumer-friendly language, disclose relevant risk information, and encourage patients to speak with their doctors in more detail. Current FDA rules governing direct-to-consumer advertising are adequate. FDA and FTC already have extensive legal authority to regulate false or misleading advertising for medical devices. FDA has a full range of potential remedies it can bring to bear, from issuing a warning letter to removing a product from the marketplace.

Indeed, while it is unproven that any advertisement will cause a patient to take a drug – as opposed to discuss a possible prescription with a physician – it seems even less likely that a medical device ad will do anything other than stimulate a patient to ask a doctor about a device: a patient does not agree to undergo surgery unless they think they have a serious need for it.

Direct to consumer advertising is a powerful educational tool that allows patients to learn of new technologies and treatment options in a timely fashion and can help to initiate important discussions between physicians and patients. DTC advertising is an invaluable tool to enhance the exchange of information and empower patients to ask questions about their own health. 
 

Nevertheless, the rest of the hearing lineup was stacked with opponents of DTC advertising: Dr. Kevin Bozic, a professor of orthopedic surgery at the University of California, San Francisco, provided an opinion of how DTC advertising supposedly has the potential to adversely impact the doctor-patient relationship, patient education, and health care costs and quality. Next, Dr. William Boden, a professor of medicine and public health at the University of Buffalo, and Dr. George Diamond, a senior research scientist at the Cedars-Sinai Medical Center, shared the findings of their recent article in the New England Journal of Medicine, offering their opinions about how DTC advertising can theoretically affect patient understanding of medical device effectiveness and risks.

Dr. Ruth Day presented expert testimony on how DTC advertising may influence consumer behavior. Also on the first panel was Ami Gadhia, policy counsel for the Consumers Union, who testified about her organization’s petition to the FDA in December, 2007 for pre-review and specific risk disclosures for medical device advertisements.