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July 23, 2015

California Court Rejects Bid to Re-Examine Motion to Dismiss Based on Fourth Circuit's False Advertising Decision

Seller Beware: Consumer Protection Insights for Industry

We recently told you about the Fourth Circuit's opinion in In re GNC Corporation holding that plaintiffs can't state a claim under state law that an ad is literally false just because there is a reasonable difference of scientific opinion. But don't consider the issue closed. A recent effort to expand this ruling to California was just rebuffed.

In the Central District of California case, Zakaria v. Gerber Products Co., Gerber sought reconsideration of the court's denial of its motion to dismiss based on the GNC decision. The plaintiff alleged that Gerber misrepresented that its Good Start Gentle infant formula reduced the risk of infants developing atopic dermatitis and that FDA endorsed this claim. The court had denied Gerber's motion to dismiss and again denied Gerber's bid for reconsideration because California law does not require a plaintiff to allege that all reasonable experts in the field agree that the claim is false. While some of the claims in In re GNC Corporation were brought under California law, the California court was not required to follow the Fourth Circuit's decision because out of circuit decisions are not binding on it. The court went on to state that a plaintiff may fail to prove actual falsehood if the scientific evidence is ultimately inconclusive because a private false advertising claim cannot be based on the lack of substantiation. However, the court felt these issues cannot be resolved on a motion to dismiss because they require the development of a factual record. Finally, the plaintiff's claim that Gerber misrepresented FDA's support of its health claim for Good Start Gentle also survived because In re GNC Corporation contemplates that allegations that an advertiser claimed more support than it had can be the basis for a false advertising claim.

It will be interesting to see in the coming months whether other courts will continue to chip away at the industry victory in In re GNC Corporation by closely parsing plaintiffs' claims and the requirements of each state's false advertising law.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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Matthew Shultz
Matthew Shultz
Counsel
Washington, DC
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