On February 25, 2014, the U.S. District Court for the Central District of California dismissed a putative class action against supplement maker The FRS Company and its former endorser, cyclist Lance Armstrong, in the case of Martin v. FRS Company, et al., Case No. CV-13-01456-BRO (MANx). The Plaintiffs, alleged purchasers of FRS products, claimed that Armstrong’s endorsement of FRS and certain FRS slogans like “Secret Weapon” misled consumers into believing that FRS products were “closely associated” with Armstrong’s “legendary” athletic achievements. Plaintiffs sued on behalf of a putative nationwide class and attempted to state claims for false advertising, unfair competition, violations of California’s Consumer Legal Remedies Act (CLRA) and breach of warranty. In a 22-page ruling, the Court rejected each of Plaintiffs’ theories and dismissed the case.
As to the false advertising, unfair competition and CLRA claims, the Court ruled that FRS’s slogans amounted to nothing more than non-actionable “puffery,” and that the claims did not meet the heightened pleading standards of Federal Rule of Civil Procedure 9(b), which applied because each claim sounded in alleged fraud.
The Court found that “secret weapon” was puffery because it is “unquantifiable and that Plaintiffs’ allegations require an unreasonable inference in order to state a claim.” In finding that this language would require a consumer to make an unreasonable inference in order to be deceived, the Court noted that “Plaintiffs do not allege that FRS products did not work.” “In fact, Plaintiffs provide a study from the National Advertising Division of the Better Business Bureau … confirming that FRS products were proven to boost energy and increase focus.” The Court also found that the Defendants made no actionable omission by not disclosing Armstrong’s PED use (which he vehemently denied at the time) while truthfully referring to Armstrong as a seven-time Tour de France winner before he was stripped of his titles, by referring to FRS as a “secret weapon” or otherwise.
In addition, the Court ruled that Plaintiffs’ allegations of having been “generally aware” of FRS’s association with Armstrong were not enough to survive Rule 9(b). “Even assuming the Court were to liberally construe the [First Amended Complaint’s] fraud allegations (which it is not required to do under Rule 9(b)), the claims do not satisfy the ‘plausibility’ requirement under Twombly and Iqbal,” the two Supreme Court decisions best known for setting forth the plausibility standard governing motions to dismiss. In fact, “[a]t various points in the FAC, Plaintiffs mischaracterize the advertisements.”
The Court also dismissed the breach of warranty claim because Plaintiffs failed to comply with the pre-suit notice requirement under California Commercial Code § 2607(3)(A) and because the alleged warranty was puffery.
The Court gave Plaintiffs until March 18, 2014 to amend their Complaint for the second time, and warned that failure to cure these deficiencies will result in dismissal with prejudice. Given the Court’s findings and comprehensive analysis, it is difficult to see how a further amendment could be viable.
A copy of the Court’s ruling can be seen here. For the reader’s information, the author of this post is counsel of record for FRS in this case.