industry group’s safety/risk/legality claims were plausibly false or misleading

Pharmacychecker.Com, LLC v. National Ass’n of Boards of
Pharmacy, 2021 WL 1199363, — F. Supp. 3d –, No. 19-CV-7577 (KMK) (S.D.N.Y. Mar.
30, 2021)

Plaintiff “offers an accreditation program for pharmacies and
provides drug price comparison information.” Unlike its competitors, it does
this for pharmacies worldwide and US online pharmacies. It does not itself sell
or import prescription drugs, but personal imports may sometimes be permitted. It
 alleged that defendants unlawfully
conspired to restrain trade in violation of the Sherman Act and that NABP engaged
in false advertising in violation of the Lanham Act.

NABP is an association of state boards of pharmacy and
competes with plaintiff in the pharmacy accreditation market through its
Verified Internet Pharmacy Practice Sites (VIPPS) program, its “.pharmacy”
Verified Websites program, and its Internet Drug Outlet Identification Program.
The other defendants allegedly competed in various ways and coordinated to shut
plaintiff out of the market, including by getting Bing to show users “a red
caution shield and a warning box when clicking on search results for pages from
Plaintiff’s website and blog, causing Plaintiff to lose 76% of its web traffic
from Bing.” I will not address the antitrust claims.

Lanham Act claims against NABP:  “NABP’s website claims that sites on its Not
Recommended List are unsafe and illegal, including Plaintiff’s website and
blog.” This is allegedly false or misleading.

Safety and risk statements: NABP says (1) that its Not
Recommended Sites list “includes websites that ‘are known to be unsafe’ or that
‘may: Dispense prescription medicine without a prescription; Dispense foreign
or unapproved medicine; or Refer/link patients to sites that facilitate the
dispensing of prescription medications in violation of state or federal law or
NABP standards.’ ” (2) “[o]rdering drugs from these websites put you and your
family at risk.” (3) “[t]he following sites are all known to be unsafe.” (4)
“[u]sing websites on the NRL to purchase drugs may put you or your loved ones
at risk.”

Though courts are divided on whether safety/risk statements
are opinion, “serious” safety concerns may be more than opinion if they are “expressing
an objective risk of serious consequences that fairly implies a basis for that
statement.” So here: these statements “appear to have a factual basis” by
saying, e.g., that the sites on the NRL are “known to be unsafe.” Plaintiff also
plausibly alleged misleadingness.

Illegality: The relevant statements were (1) “ ‘[a]void
[t]hese [w]ebsites’ [on the Not Recommended Sites list] because they ‘appear to
be out of compliance with state and federal laws or NABP patient safety and
pharmacy practice standards.’ ” (2) “websites on the list … are ‘acting
illegally or do not follow best practices.’ ” “Since both statements are
disjunctive, if one element of each statement is true, they cannot be literally
false.” However, plaintiff didn’t allege that the statements were literally
false as to best practices for one of its sites ( But it
did plausibly allege that “NABP’s statements about are
literally false, because it is a policy advocacy blog that does not even
arguably meet any criteria that NABP lists on the Not Recommended Sites list.” Conflating
plaintiff with illegal sites was plausibly misleading, especially as NABP
allegedly earlier said of plaintiff: “clearly they serve a purpose, and they
help consumers, and we serve a different purpose, or maybe just slightly
different.” This inconsistency justified a plausible inference of deliberate
deception. Indeed, it was plausible that this was egregious conduct, since “the
record does not suggest that such deception is common in the industry.”

Was this sufficiently alleged to be commercial speech? Yes. First,
NABP’s statements were plausibly ads, in that they included “Buy safely” with a
link to a list of NABP affiliates. Second, they therefore referred to specific
products. Third, plaintiff alleged that competition with it in the market for
pharmacy accreditation provided an economic motivation for NABP’s speech.
Plaintiff was not required to allege that NABP’s speech led to a specific

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