You want to start taking supplements, so you turn to a guide containing consumer reviews. Is the guide just a collection of advertisements? Last month, the Southern District of California again confronted this question, and also took into consideration whether the reviews should be afforded First Amendment protection. The court reiterated its prior finding that the Lanham Act does not apply to a nutritional supplement guide that faced a false advertising challenge.
In the fifth edition of the NutriSearch Comparative Guide to Nutritional Supplements (the “Guide”), NutriSearch recognized four companies—but not Ariix—with the Gold Medal of Achievement, even though NutriSearch allegedly acknowledged Ariix met the standards for the distinction. For its part, NutriSearch explained that it was reworking its awards recognition program for the sixth edition of the Guide, and that the fifth edition Gold Medal winners were merely prior winners who were grandfathered in. Ariix filed suit against NutriSearch and the Guide’s author, Lyle MacWilliam, claiming that the failure to award the Gold Medal amounted to a false representation that Ariix or its products are not as good as its main competitor, Usana, or Usana’s products. Ariix also alleged that the Guide claims to be objective and neutral, but is actually a shill for Usana, because of a previously undisclosed business relationship between MacWilliam and Usana.
In dismissing Ariix’s first complaint in 2018, the district court drew a distinction between commercial advertising or promotions, which the Lanham Act governs, and consumer reports or reviews, which the Lanham Act does not. The latter category is entitled to First Amendment protection. The court explained that “[i]f a plaintiff could get around First Amendment protections simply by arguing that a reviewer is biased, the First Amendment protection accorded to product reviews would not mean much.” The court cautioned that not “any publication calling itself a consumer product review actually is one . . . [b]ut if a publication that appears to be a consumer product review is in fact a consumer product review, it falls outside the scope of the Lanham Act’s false advertising provision.” This is true even if the consumer product reviews “are alleged to be biased, inaccurate, or tainted by favoritism.” The court allowed Ariix to file an amended complaint to address deficiencies in its pleadings.
Ariix’s amended complaint failed to cure its pleading deficiencies. At the outset, the amended complaint “treat[ed] the Guide as a whole as commercial advertising,” a premise the district court rejected the first time around. Even if the award recognitions were to constitute commercial advertising, the district court held it would not be enough to subject the entire Guide to the false advertising provision of the Lanham Act. This is because the Guide is comprised of two main sections: a set of ratings of 1,500 different nutritional supplements sold by different companies, and general information about supplementation. The Guide also aggregates consumer reviews. The fact that so many different products were reviewed rendered implausible Ariix’s claim that the purpose of the Guide is to push consumers towards Usana’s products. Further, Ariix failed to allege that in bestowing the awards, NutriSearch and MacWilliam were expressing false or misleading facts rather than mere opinions or value judgments, as the Lanham Act would require.
In the end, the court found that the amended complaint failed to plead facts showing that the Guide was commercial advertising within the meaning of the Lanham Act. Further, it failed to plausibly allege false statements about Ariix’s products. Because it had already been given leave to address these pleading deficiencies, the court inferred Ariix could not successfully amend if given another opportunity to do so. Thus, Ariix’s amended complaint was dismissed with prejudice for failure to state a claim.