Placebo effect is ok by CLRA: Homeopathic remedy wins jury trial on false advertising, still needs to defend against “unfairness”

Allen v. Hylands, Inc., — Fed.Appx. —-, 2019 WL 2142843,
No. 17-56184 (9th Cir. May 15, 2019)
Allen, on behalf of a class, appealled following a jury’s
verdict in favor of Hyland’s. “The gravamen of [Allen’s] claims is that
Hyland’s [homeopathic] products are ineffective at providing the promised
symptom relief.” The district court framed the argument as: “Defendants made
material misrepresentations about products which do not work and cannot
possibly work as a matter of scientific principle, given the level of dilution
of their active ingredients.”
“The parties submitted conflicting jury instructions:
Allen’s proposed instructions stated that Allen needed to prove that Hyland’s
products ‘did not’ work, while the instructions proposed by Hyland’s stated
that Allen had to show that the products did not and ‘cannot relieve symptoms
as represented.’”  The court went with
“cannot,” and declined to give Allen’s proposed instruction that the jury “may
not take into consideration the placebo effect in determining whether
[Hyland’s] products provided relief.”
The jury returned a verdict for Hyland’s on the
Magnuson-Moss Warranty Act claim, express warranty claim, and CLRA claim.
Relying on the jury’s express and implicit findings of fact, the district court
found for Hyland’s on the equitable FAL and UCL claims and denied Allen’s
motion for a new trial.
If “cannot” was error, it was probably harmless, because the
parties used “do not” and “cannot” interchangeably throughout. As for the
placebo effect instruction, Allen relied on FTC v. Pantron I Corp., 33 F.3d
1088 (9th Cir. 1994), rejecting the placebo effect as a way a product could
“work.” But CLRA, Magnuson-Moss Act, or express warranty cases haven’t adopted
this holding [nor have they rejected it, for the record], so the proposed
instruction wasn’t supported by law.
Admitting Hyland’s expert was also not an abuse of
discretion.  He was a board certified
expert in toxicology who’d published extensively; several of his works
concerned the principles of hormesis (Wikipedia: “any process in a
cell or organism that exhibits a biphasic response to exposure to increasing
amounts of a substance or condition,” in particular, a response at low doses
that would be reversed or not observed at high doses), about which he was
called to testify; and his testimony on the relationship between hormesis and
homeopathy was derived from a literature review citing to several peer-reviewed
sources in his field.
There was a reasonable basis for the jury’s verdict, and no
abuse of discretion in denying Allen’s Rule 59 motion.
As to the equitable claims, the district court should follow
the jury where it found facts, but if “determining the equitable claims
requires proof of a fact that the jury did not implicitly or expressly find,
the district court must make its own determination.”  The FAL claims required proof of the same
facts as the legal claims, so that was ok. But the UCL claim had both deceptive
advertising and unfairness theories, and the latter was broader than the CLRA,
Magnuson-Moss Warranty Act, or express warranty claims. The UCL’s unfair prong
can apply to business practices that are against public policy, that are
“immoral, unethical, oppressive, unscrupulous or substantially injurious,” or
that cause unforeseeable injuries to consumers that are not outweighed by
countervailing benefits. The jury’s “narrow” findings on deceptive advertising
didn’t resolve the broader unfair practices theory. Thus, the district court
erred in granting judgement to Hyland’s without further analysis and that part
of the case was reversed.

from Blogger http://bit.ly/2VRvldU

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