801 F. Supp. 2d 993
S.D. Cal.2011Background
- Hydroxycut-marketing MDL suit alleging deceptive advertising and unsafe products.
- Plaintiffs seek to represent a nationwide class of Hydroxycut purchasers.
- Alleged that Iovate marketed Hydroxycut as safe and effective without clinical proof.
- FDA issued warnings and Hydroxycut recall in 2009 due to hepatotoxicity and other health risks.
- Plaintiffs allege injuries are economic (purchase price loss) and potential health costs.
- Products at issue include 14 Hydroxycut-branded items and related labeling/advertising claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Article III | Plaintiffs have injury-in-fact from overpayment/consumer harm. | Plaintiffs lack concrete injury (no physical harm). | Plaintiffs have standing; economic injury suffices. |
| Applicability of Rule 9(b) | Consumer-protection claims arise from a unified fraudulent conduct. | Claims insufficiently pled with particularity. | Rule 9(b) applies; Counts I-XIV dismissed but leave to amend. |
| Express warranty pleading under UCC 2-313 | Hydroxycut representations formed basis of bargain. | Plaintiffs failed to specify which statements; not pled with basis-of-bargain. | Express warranty claim dismissed. |
| Privity for warranty claims | Agency between manufacturers and retailers establishes privity. | Agency allegations are conclusory; no privity shown. | Georgia express/implied warranty claims dismissed for lack of privity; others dismissed as to implied warranty. |
| Retailer defendants' liability | Retailers participated in or adopted deceptive advertising. | No adequate facts showing control/participation by retailers. | Claims against Retailer Defendants dismissed with leave to amend. |
Key Cases Cited
- In re Bayer Corp. Combination Aspirin Prod. Mktg. & Sales Practices Litig., 701 F. Supp. 2d 356 (E.D.N.Y. 2010) (economic injury suffices for standing when product misrepresented)
- Ramirez v. STi Prepaid LLC, 644 F. Supp. 2d 496 (D.N.J. 2009) (economic injury from overpayment constitutes injury-in-fact)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requires injury-in-fact, concrete and particularized)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (to plead a claim, allegations must be plausible)
- Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097 (9th Cir. 2003) (fraud claims require Rule 9(b) heightened pleading)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) applies to CLRA/UCL claims; require specificity)
- In re Bayer Corp. Combination Aspirin Prod. Mktg. & Sales Practices Litig., 701 F. Supp. 2d 356 (E.D.N.Y. 2010) (standing analysis referenced for misrepresented product)