Nilon v. Natural-Immunogenics Corp., No. 3:12cv00930, 2013 WL 5462288 (S.D. Cal. Sept. 30, 2013)
Defendant NI sells a colloidal silver dietary supplement, “basically positively charged silver particles suspended in purified water,” that claims to provide immune support. Nilon bought it and said it didn’t work, and filed the usual California claims. Though his complaint focused mostly on lack of substantiation, he also alleged that it didn’t provide the promised benefits to him. The court summarized: “Nilon and Natural-Immunogenics make all of the arguments the Court would expect them to” about class certification. While the court was inclined to grant the motion for a restitution class of purchasers who were exposed to the claims at issue and bought a product allegedly worth less than what they paid. The restitution would be the difference between the price paid for the product, Sovereign Silver, and the value actually received. If Sovereign Silver did absolutely nothing, its value would be zero and the restitution award would be a total refund. “But there is a threshold problem with this case that the Court can’t look past.”
Lack of substantiation claims can’t be brought by private parties under California law, but that’s what Nilon’s complaint was. Nilon might be able to go ahead if he could cite a study purporting to show that colloidal silver doesn’t benefit the immune system; he might also proceed “if the Sovereign Silver packaging actually said its benefits have been scientifically proven (which it does not) and there are no such studies.” But the complaint only alleged lack of substantiation, which wasn’t enough. Comment: I am still waiting for a court to address the argument that a health claim of this type necessarily implies scientific substantiation—known as an “establishment claim” in Lanham Act terms; Lanham Act cases recognize that establishment claims can be made by implication. Although not all claims are establishment claims, in the modern world there’s a good case to be made that all health claims, especially supplement claims, are establishment claims. That being the case, NI would have made a falsifiable statement, at least by necessary implication, about the quality of its evidence. That statement could then be disproved by showing that studies didn’t support these claims, which were in fact nonscientific and at best hope-based contrary to the message that a reasonable consumer would receive.
Anyhow, the court denied the motion for class certification and allowed Nilon to file an amended complaint, but cautioned that, to the extent the complaint relied on the product’s failure to work for him or other specific plaintiffs, that would raise individual issues cutting against class certification. Or Nilon could explain to the court why this wasn’t a lack of substantiation case. If this barrier were to be overcome somehow, the court would be inclined to grant certification.