Liability Immunity Under The PREP Act: A Potent New Defense Against COVID-Related False Advertising Claims
Our national response to the COVID-19 pandemic has been made more difficult by a shortage of personal protective equipment and lifesaving drugs and medical devices. Some evidence suggests that manufacturers’ fear of lawsuits has exacerbated these shortages. Seeking to allay these concerns, in March 2020, the Secretary of the Department of Health and Human Services (HHS) issued a Declaration providing manufacturers, distributors, health professionals, and other “qualified persons” immunity against certain claims relating to COVID-19 “countermeasures.” See 85 Fed. Reg. 15198 (Mar. 17, 2020). In mid-April, HHS followed up with an Advisory Opinion clarifying the scope of liability immunity under the Declaration.
Much has been written about the Declaration’s potential as a shield against product liability suits. But does the Declaration also provide immunity from false advertising suits, including Lanham Act, common-law, and statutory consumer protection claims? There’s not yet any judicial precedent on this question, but the answer appears to be “yes”—at least in many cases.
The Food, Drug, and Cosmetic Act (FDCA) promotes nationwide uniformity in food labeling by establishing a comprehensive federal labeling scheme and preempting state law that imposes different requirements. 21 U.S.C. § 343-1(a). Over the years, the FDA has issued regulations directed to specific labeling issues, including representations of a food product’s “primary recognizable flavor.” 21 C.F.R. §§ 101.22(a)(3), 170.3(o)(12). So long as a label’s representation of a “primary recognizable flavor” complies with the FDA’s flavoring regulation, the label is not misleading, and any state law that supposedly says otherwise is preempted.
As coronavirus (COVID-19) spreads across the country, some companies are advertising their products’ usefulness in preventing or treating the disease. But federal agencies—including the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC)—are close behind. Over the past few weeks, they have together sent more than a dozen warning letters to COVID-19 advertisers, insisting that they cease making coronavirus claims.
Grains of paradise (aframomum melegueta), are a peppery, citrusy spice indigenous to West Africa, related to ginger and cardamom. The name purportedly derives from medieval merchants’ claims that the plant grew only in the Garden of Eden. Common to West African cuisine, grains of paradise are also one of the botanicals sometimes used to give gin its characteristic flavor.
In Florida, however, an obscure 1868 law makes it a third-degree felony to “adulterate … any liquor” with certain specified substances, ranging from grains of paradise and capsicum (chili pepper) to potentially deadly opium and “sugar of lead.” Fla. Stat. § 562.455. Some have postulated that this law’s original intent was to prevent consumer deception, as the banned ingredients were once added to liquor to make it taste stronger (more alcoholic) than it actually was. That same practice spurred an 1816 law of Parliament (56 Geo. III, ch. 58) making it illegal for brewers and dealers in beer to possess grains of paradise. Unlike merrie olde England, however, the Sunshine State never got around to repealing its law.
It was only a matter of time. As we anticipated last summer, the plaintiffs’ bar recently filed a slew of false advertising suits against manufacturers of products infused or made with cannabidiol, a/k/a CBD. This development was a fait accompli, given the combination of a booming CBD market, a murky federal regulatory landscape, and a patchwork of state regulatory efforts at varying degrees of development. This confluence of factors has paved the way for at least ten consumer lawsuits in the last six months against producers of CBD products. We expect more suits to follow in the near future as copycat suits are filed, CBD products become increasingly mainstream, and more deep-pocketed players enter the CBD market.
This blog has previously examined the recent spate of so-called “slack-fill” lawsuits, in which consumers claim that a food (or other) product is misleadingly packaged because it contains excess air. We noted that the growing trend is for courts to reject such suits at the motion-to-dismiss stage, for a variety of reasons. For example, courts have found slack-fill complaints deficient for failing to allege, beyond conclusory platitudes, that the package’s empty space serves no legitimate function, or for failing to allege with plausibility that a reasonable consumer would actually be deceived. Late last year, in Benson v. Fannie May Confections Brands, Inc., the U.S. Court of Appeals for the Seventh Circuit issued an important decision affirming the pleadings-stage dismissal of a slack-fill suit, but based on a distinct justification: the failure to plausibly allege any cognizable damages associated with slack-filled packaging.
FDCA Preclusion: When Can a Manufacturer Defeat a Competitor’s Lawsuit by Complying with FDA Regulations?
As many readers probably know, when a food or beverage manufacturer gets a consumer class action alleging that its labeling violated state law, one of the first things it should do is consider whether the disputed aspect of the labeling is covered by the federal Food, Drug and Cosmetic Act (“FDCA”). Many provisions of that statute—and, by extension, their implementing regulations—expressly preempt non-identical state-law regulations. If a putative class of consumers is asking a manufacturer to do something different with its labeling than those provisions do, there is a strong argument that the case is preempted: federal law (the FDCA) trumps state law (the relevant consumer protection statute).
Ninth Circuit Endorses RICO Claims For Prescription Pharmaceutical Promotion
The Racketeer Influenced and Corrupt Organizations Act (RICO) was meant to help take down the Mafia. For years, however, plaintiffs have attempted to contort it into a federal false advertising regime for prescription pharmaceuticals, complete with treble damages and attorney’s fees. The Ninth Circuit recently gave plaintiffs a boost in that effort, permitting RICO claims to proceed against pharmaceutical companies based on allegedly improper labeling and promotion of their prescription medications.
Patterson partner and Misbranded contributor Jonah Knobler recently critiqued the Ninth Circuit’s decision—and pharmaceutical RICO suits generally—at Drug and Device Law. Check out that post here.
Last month, Misbranded co-editors Josh Kipnees, Jonah Knobler, and Jane Metcalf presented a live-streamed webinar via Bloomberg Law titled “Hot Topics in Consumer False Advertising Litigation.” The free hour-long webinar, now available on demand, covers the following subjects, some of which should be familiar to regular readers of this blog:
- “Natural” / “no artificial ingredients” claims
- “No preservatives” claims
- Ingredient claims (“made with [X]”)
- Geographic origin claims (e.g., “Made in the USA”)
- Slack-fill claims
- Claims involving nondisclosure of morally troubling/offensive facts
- What’s next in consumer false advertising litigation?
We encourage you to check it out (and obtain some CLE credit in the process).
The promise of improved cognitive capability or memory appeals to almost everyone. So it’s no surprise that the market for such enhancements is broad, ranging from “brain training” apps for your phone to dietary supplements promising memory boosts.
Unless you were born yesterday, you know that packaged goods usually contain some empty space in the box, bottle, or bag. This has been true for as long as there have been packaged goods. What is relatively new is that consumers—or, rather, a small cadre of specialized plaintiff’s lawyers—are suing over it. But as Newton said, for every action, there is an equal and opposite reaction. And the more that lawyers have inundated courts with these suits, the more aggressively courts have responded to shut the silliness down. This post examines the regulatory underpinnings of these so-called “slack-fill” suits and the many bases that courts have found for letting the air out of them.
Many recent consumer class actions against food and beverage manufacturers have related to label claims that a particular category of ingredient is not used in the product—e.g., “No Preservatives,” “No Artificial Flavors.” These lawsuits follow a predictable formula: the plaintiff, relying on the product’s ingredient list, alleges that a particular ingredient in the product functions as an artificial flavor and/or chemical preservative, and that the “no preservatives” or “no artificial flavors” claim is therefore false.