Brady v. Basic Research, L.L.C.
101 F. Supp. 3d 217
E.D.N.Y2015Background
- Proposed class action by purchasers of Zantrex-3, Zantrex-3 High Energy Fat Burner, and Zantrex-3 Power Crystals alleging defendants marketed them as clinically proven weight-control supplements.
- Plaintiffs: Ashley Brady (NY) purchased Zantrex-3 in 2010; Stephanie Cardillo (NJ/MD) purchased Fat Burner via Amazon and alleges adverse health effects.
- Defendants: Basic Research, LLC and wholly-owned Zoller Laboratories (Utah companies); officers/shareholders Dennis Gay (CEO), Daniel Mowrey (Dir. Scientific Affairs), Mitchell Friedlander (marketing consultant); Nicole Polizzi (NY resident paid spokesperson).
- Causes of action: Magnuson-Moss Warranty Act (MMWA), breach of express warranty, NY GBL § 349, Maryland Consumer Protection Act (MCPA), negligent and fraudulent misrepresentation, and unjust enrichment.
- Key procedural motions: multiple Rule 12 motions — to strike (12(f)), to dismiss for lack of subject-matter jurisdiction (12(b)(1)), lack of personal jurisdiction (12(b)(2)), and failure to state a claim (12(b)(6)). Court adjudicated standing, personal jurisdiction over individual defendants, and the sufficiency of the pleaded claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to strike allegations about Friedlander’s past censures (12(f)) | Allegations show knowledge/intent and are admissible under FRE 404(b) | Allegations are immaterial, impertinent, and prejudicial | Denied — prior censures relevant to intent/knowledge and impeachment; probative value outweighs prejudice |
| Standing re: claims for Power Crystals (12(b)(1)) | Products are sufficiently similar across Zantrex line; plaintiffs can assert claims for unpurchased but substantially similar product | Named plaintiffs did not purchase Power Crystals; no injury-in-fact for that product | Denied — at pleading stage similarities suffice; standing/class-typicality issues reserved for class certification |
| Brady's claims vs. Polizzi (12(b)(1)) | Brady relied on packaging representations when she purchased Zantrex-3 | Polizzi’s endorsements postdate Brady’s purchase; no causal connection | Granted — Brady lacks injury traceable to Polizzi; Brady’s claims against Polizzi dismissed for lack of subject-matter jurisdiction |
| Personal jurisdiction over individual defendants (12(b)(2)) | Corporations acted as agents in NY; individuals (Gay, Mowrey, Friedlander) controlled or participated in marketing targeting NY | Some individuals had limited/remote involvement or left the company long before alleged conduct (esp. Mowrey) | Granted as to Mowrey (insufficient contacts/conspiracy allegations); Denied as to Gay and Friedlander (prima facie agency/contact with NY; due process satisfied) |
| MMWA and breach of express warranty (12(b)(6)) | Packaging/advertising made express performance warranties (rapid weight loss, clinical test claims); plaintiffs relied and were harmed | Defendants argue statements are not written warranties or actionable; privity and other defenses | Denied as to MMWA and breach claims — pleaded statements and reliance adequate to survive dismissal (NY and MD warranty law analyzed separately) |
| NY GBL § 349 and Maryland MCPA; fraud/negligent misrepresentation; unjust enrichment (12(b)(6)) | Advertising was deceptive and caused consumer injury (overpayment, health harms) | Some statements not actionable as safety claims; plaintiffs conflate deception and injury; unjust enrichment duplicative where warranty exists | NY GBL § 349, MCPA, fraud, negligent misrepresentation, and unjust enrichment claims dismissed in whole or as to specific plaintiffs: NY GBL dismissed; MCPA, fraud/negligent misrep and unjust enrichment dismissed for Maryland claims; unjust enrichment dismissed in NY as duplicative. Polizzi: some Maryland-based claims dismissed as to Cardillo; MMWA and MD express-warranty claims survive against Polizzi |
Key Cases Cited
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (Article III standing and case-or-controversy limits)
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (Rule 12(b)(1) standard)
- Amidax Trading Group v. S.W.I.F.T. SCRL, 671 F.3d 140 (2d Cir. 2011) (pleading standard for standing at motion to dismiss)
- NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012) (distinguishing standing vs. class-certification issues)
- International Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts and due process for jurisdiction)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (purposeful availment and foreseeability for specific jurisdiction)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (two-pronged plausibility / conclusory-pleading analysis)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) (pleading standards and notice pleading)