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“Lack of Substantiation” Claims: A Substantively Lacking Liability Theory

As astronomer Carl Sagan famously said, “absence of evidence is not evidence of absence.”  Plaintiffs have not gotten the message.  They often allege that a defendant’s marketing or labeling statements are false and misleading on the sole basis that there is purportedly no evidence (or insufficient evidence) proving their truth.  These so-called “lack of substantiation” claims are easy to plead because a plaintiff does not need to conduct an investigation to identify evidence that the challenged statement is false.  Rather, she alleges only an absence of supporting evidence for the statement—and generally, in a conclusory manner.

By and large, courts have taken a dim view of this liability theory, recognizing that it turns the usual burdens of pleading and proof in private litigation on their head.  California, where the lion’s share of consumer class actions are filed, has rejected lack-of-substantiation claims for the past 15 years.  A recent Ninth Circuit decision seemingly closed the door for good, although some lingering uncertainty may remain about a particular subset of advertising claims.  Courts outside California have not addressed the issue in the same detail, but several of them have agreed that lack-of-substantiation suits are generally nonviable.

King Bio Bars Lack-of-Substantiation Claims Under California Law

In 2003, California’s intermediate appellate court considered whether a private plaintiff may premise a consumer protection claim on the claimed lack of substantiation for a defendant’s marketing statements.  See Nat’l Council Against Health Fraud, Inc. v. King Bio Pharms., Inc., 107 Cal. App. 4th 1336 (Cal. App. Ct. 2003).  Defendant King Bio sold homeopathic remedies that it claimed relieved a variety of ailments, including stress, colds, flu, eating disorders, learning disorders, menstrual irregularities, snoring, and tobacco and alcohol cravings.  Plaintiff National Council Against Health Fraud (NCAHF) sued King Bio and proceeded to trial “on the theory that there [was] no scientific basis for the advertised efficacy of King Bio’s products.”  Id. at 1341 (emphasis added).  NCAHF “performed no tests to determine the efficacy of [the] products and presented no anecdotal evidence.”  Id.  Instead, NCAHF “asserted that the burden of proof should be [placed on] King Bio” to show that its marketing claims were in fact true.  Id.  Rejecting this argument, the trial court granted a directed verdict for King Bio because NCAHF had failed to offer affirmative proof that King Bio’s advertising was false. 

The appellate court agreed.  It explained that California law grants “[p]rosecuting authorities, but not private plaintiffs, [] the … power to request advertisers to substantiate advertising claims.”  Id. at 1344 (emphasis added).  This distinction between private and public enforcement was “rational” because it “prevents undue harassment of advertisers,” cabining demands for substantiation to “a limited number of prosecuting authorities” rather than “an unlimited number of private persons.”  Id. at 1345.  The fact that a plaintiff “does not wish to bear the expense of proving its case”—e.g., by conducting the scientific tests necessary to demonstrate falsity—“does not mean that the burden and expense should be shifted to” the defendant.  Id. at 1348.

In concluding, the court noted that the case before it did not involve a so-called “establishment” claim by a manufacturer—i.e., an advertising claim that a property or benefit of its product has been “established” through testing or research.  (An example of such a claim would have been: “clinically proven to relieve stress, colds, flu, etc.”).  To an extent, federal laws (specifically, the FTC Act and the Lanham Act) treat establishment claims differently from ordinary, non-establishment claims, requiring the manufacturer to come forward with the tests or studies referred to in the claim.  But because “the only advertisements at issue … were non-establishment claims,” the court did “not [need to] reach the issue” of whether California consumer protection law recognized a similar exception for establishment claims.  Id. at 1350-51.

Kwan and Engel: The Ninth Circuit Weighs In

Even after King Bio, plaintiffs continued to bring lack-of-substantiation claims in California federal courts—though without success.[1]  In 2017, the Ninth Circuit addressed such claims head-on for the first time in a published decision.  See Kwan v. SanMedica Int’l, LLC, 854 F.3d 1088 (9th Cir. 2017).  In Kwan, the plaintiff alleged that certain claims regarding over-the-counter supplements marketed to boost human growth hormone (HGH)—including claims that the products were “clinically tested to boost HGH by a mean of 682%” and that HGH “has been associated” with a parade of rejuvenating effects ranging from wrinkle reduction to heightened sex drive—were misleading because they lacked evidentiary support.  Notably, the former claim, which touted the results of “clinical testing,” is an example of the type of “establishment” claim on which the California Court of Appeal reserved judgment in King Bio.

The Northern District of California dismissed the complaint,[2] and the Ninth Circuit affirmed.  It relied heavily on King Bio, which it recognized as “firmly established law in California,” to conclude that California’s consumer protection laws “provide [no] private cause of action” for advertising that allegedly lacks substantiation.  The plaintiff argued that King Bio had left open the question of “establishment” claims, “invit[ing] the court to incorporate … [the] distin[ction] between ‘establishment’ and ‘non-establishment’ claims” into California’s consumer protection law.  Id. at 1097.  But the Ninth Circuit appeared to slam that window shut, opining that “no authority exists under California law for using the Lanham Act distinction between ‘establishment’ and ‘non-establishment’ claims as a means of shifting the burden of proof in California consumer protection law actions.”  Id. at 1097-98.  Indeed, the court stated, “[r]eading a requirement that [these] distinctions apply would clearly violate recognized California law on the burden of proof placed on the plaintiff.”  Id. (emphasis added).

Concurrently with Kwan, the Ninth Circuit also issued a summary decision in Engel v. Novex Biotech, LLC, where a consumer challenged the advertising of a supplement that similarly claimed to be “clinically tested” to increase HGH levels.  689 Fed. App’x 510 (9th Cir. 2017).  As in Kwan, the Ninth Circuit affirmed the lower court’s dismissal, holding that Engel’s “allegations that defendant’s marketing claims are not supported by any reliable clinical trial … do not support a finding that the advertising claims are actually false, only that they lack substantiation.”  Id. at 511.

Aloudi: The Return Of The “Establishment Claim” Exception?

After Kwan and Engel, it appeared to be settled that lack-of-substantiation claims were prohibited under California law, even if the challenged statements involved claims of “clinical testing” or “clinical proof.”  But a summary memorandum that the Ninth Circuit issued later that same year may have muddied the waters.  In Aloudi v. Intramedic Research Group, LLC, 729 F. App’x 514 (9th Cir. 2017), a different panel of the Ninth Circuit considered a consumer’s challenge to the defendant’s claim that its weight loss pill was “clinically proven to provide a significant reduction in actual body mass index.”  Id. at 515. 

Despite expressly citing Kwan and Engel, the Aloudi court asserted—quite puzzlingly—that it was “an unsettled question of California law whether ‘clinical proof’ representations can give rise to a cognizable actual falsity claim absent affirmative evidence that the underlying substantive representation is false.”  Id. at 516.   That is, the court suggested that a private plaintiff may still be able to proceed on allegations that the defendant lacks substantiation for a claim that a particular benefit or effect is “clinically proven.” 

However, the court ultimately sidestepped this supposedly “unsettled question,” holding that the plaintiff had failed to allege with “particularity” that the defendant lacked substantiation for its claim to possess clinical proof.  Id.  At best, the complaint had alleged that one clinical trial on which the defendant had depended “was fraudulent”; it had not alleged, beyond mere conclusory assertions, that the challenged trial was “the sole basis for [the defendant’s] assertion of clinical proof.”  Id.   For example, the plaintiff had not “allege[d] that he searched the available scientific literature in a comprehensive manner and found no study that could support [the defendant’s] claims.”  Id.  The court’s dicta suggest that, if the plaintiff had included such an allegation, it might potentially have been sufficient to proceed to discovery.

It is hard to square Aloudi’s dicta with the express holdings of Kwan and Engel that “establishment” claims enjoy no exemption from the rule against lack-of-substantiation suits.  In the future, Ninth Circuit panels and district courts within that circuit should be bound by Kwan, a published and precedential decision, and should not treat this as an “unsettled question,” as the Aloudi court did.  Moreover, at least in our view, Kwan and Engel have the better of the argument.  There is little functional difference between an advertisement promising that a product has a certain benefit and an advertisement claiming that the product has been proven or tested to have the same benefit.  As the district court recognized in Kwan, permitting plaintiffs to bring lack-of-substantiation challenges merely because the defendant used words like “proven” or “shown” would allow plaintiffs to “make an end run around the bar against private substantiation claims … simply by adding ‘magic words.’”[3]

Lack-of-Substantiation Claims Outside California

Outside California, the status of lack-of-substantiation claims, and any purported exception for “establishment” claims (e.g., “clinically proven”), is generally less clear.  At minimum, there is some authority that lack-of-substantiation claims are barred under the laws of Illinois, New Jersey, New York, and Missouri.  See Gredell v. Wyeth Labs., Inc., 367 Ill. App. 3d 287 (Ill. App. 2006) (Illinois law); Scheuerman v. Nestle Healthcare Nutrition, No. 10-cv-3684 (FSH), 2012 U.S. Dist. LEXIS 99397 (D.N.J. July 16, 2012) (New Jersey law); Hughes v. Ester C Co., 930 F. Supp. 2d 439 (E.D.N.Y. 2013) (New York and Missouri law).

However, two of these decisions—Gredell and Hughes—purported to recognize the exception for “establishment” claims that the Ninth Circuit rejected out of hand in Kwan and Engel.  For example, Gredell suggested that “[l]ack of substantiation is [actionably] deceptive only when the [advertising] claim at issue implies there is substantiation for that claim, i.e., if defendants had claimed something along the lines of ‘tests show that [the product in question] is effective….'”  367 Ill. App. at 287.  Thus, Illinois courts have sustained a claim alleging lack of substantiation for a representation that bath products were “clinically proven” to help babies sleep better, but dismissed a claim alleging lack of substantiation for a representation that breakfast biscuits provided four hours of energy.[4]

Conclusion: Lack-of-Substantiation Claims Lack Substance

As the California Court of Appeal recognized over 15 years ago, the burden of a private plaintiff in consumer litigation should be to plead, and then prove, that the defendant’s product does not have the advertised properties.  Defendants should not be subjected to the “undue harassment” of private litigation by class-action attorneys unwilling or unable to shoulder that essential burden—especially where regulators have the power to demand affirmative substantiation from advertisers when consistent with the public interest.  Furthermore, as the Ninth Circuit recognized in Kwan, there should be no exception to this rule for “establishment” claims.  Such an exception would reward artful pleading, undermine the rule’s intended benefits, and compel starkly different treatment of advertisements that convey the same essential message based on minor differences in wording.  We see little to recommend such a result.


[1] See, e.g., Barrera v. Pharmavite, LLC, No. 11-cv-4153 (CAS), 2011 U.S. Dist. LEXIS 158240 (C.D. Cal. 2011); Bronson v. Johnson & Johnson, No. 12-cv-4184 (CRB), 2013 U.S. Dist. LEXIS 54029 (N.D. Cal. 2013); Caltex Plastics, Inc. v. Elkay Plastics Co., No. 12-cv-10033 (RSWL), 2015 U.S. Dist. LEXIS 13442 (C.D. Cal. 2015); Racies v. Quicy Bioscience, LLC, No. 15-cv-292 (HSG), 2015 U.S. Dist. LEXIS 65468 (N.D. Cal. 2015).

[2] No. 14-cv-3827 (MEJ), 2015 U.S. Dist. LEXIS 22911 (N.D. Cal. 2015).

[3] 2015 U.S. Dist. LEXIS 22911, at *23.

[4] Compare Leiner v. Johnson & Johnson Consumer Cos., 215 F. Supp. 3d 670 (N.D. Ill. 2016) with Spector v. Mondelez Int’l Inc., 2017 U.S. Dist. LEXIS 158140 (N.D. Ill. 2017).