Ketonatural Pet Foods, Inc. v. Hill’s Pet Nutrition, Inc., 2024
WL 4679219, No. 24-2046-KHV (D. Kan. Nov. 4, 2024)
Ketonatural is a start-up that sells grain-free pet food,
treats, and supplements. Hill’s is a large pet food company that makes
traditional grain-containing products, one of the big three that does. Hill’s
markets to vets, including by offering free continuing education courses, product
literature, and incentive programs. It funds research at vet schools and also
funds non-profit entities and influential professional organizations, such as
the American Veterinary Medical Association. Some nonprofits are largely funded
by Hill’s, and Ketonatural labels them “cut-outs.” One provided more than $149
million to fund approximately 3,000 veterinary studies. Another produces
textbooks, continuing education courses and veterinary nutrition courses,
complete with credentialed faculty, course materials and lectures. Through the
years, Hill’s officers, directors and other agents have served on their boards.
Hill’s also partners with vets in support of its marketing, such as Dr. Freeman
is a veterinary professor at Tufts University and co-founder of the
“Petfoodology” web site, which Hill’s actively promotes. Other vet partners
have authored various articles on pet nutrition.
Grain-free foods started to gain a foothold in the last
decade, and Hill’s market share fell by more than 20%. Ketonatural alleged that
Hill’s and individual vets began a coordinated campaign to raise concerns about
the risks of grain-free pet foods. Hill’s described these foods as “BEG” diets:
boutique, exotic or grain-free. “Boutique” refers to the company size and
“exotic” describes the ingredients used. “Exotic ingredients can include
kangaroo, lentils, duck, pea, fava bean, buffalo, tapioca, salmon, lamb,
barley, bison, venison and chickpeas. This definition describes every pet food
sold in America except for those made by defendant and two other companies.”
In 2018, the FDA announced that it had begun an investigation
into a potential link between canine dilated cardiomyopathy and diets containing
peas, lentils, other legume seeds, or potatoes as main ingredients,” which
“appear to be more common in diets labeled as ‘grain-free.’ ” As a result of a
FOIA request, Ketonatural discovered that some of Hill’s pet vets had set up a
meeting to discuss their “clinical observations and concerns concerning a
potential relationship between grain-free canine diets and Dilated
Cardiomyopathy.” Since 2014, 80% of cases reported to the FDA (triggering the
investigation) came from two vets affiliated with Hill’s. They allegedly didn’t
send an unbiased, representative sample of the canine DCM cases that they
encountered in their respective professional practices, but withheld cases
involving grain-containing diets, without initially disclosing their selection
protocol to the FDA. The FDA investigation attracted mainstream media
attention, which also featured statements by Hill’s pet vets.
Allegedly because of the biased reporting, in 2018 the FDA
issued a warning about repots of DCM in dogs “eating certain pet foods
containing peas, lentils, other legume seeds, or potatoes as main ingredients.”
This allegedly “created panic among pet owners, resulting in a disproportionate
number of new cases reported to the FDA on dogs fed grain-free diets when
compared to dogs fed diets that contained grain.” In 2022, the FDA issued a
press release saying it didn’t intend to release further public updates until
there was meaningful new scientific information to share. After four and a half
years, it allegedly had not found a causal relationship between BEG diets and
DCM. “Even so, the panic, media attention and misinformation surrounding the
investigation caused massive financial and reputational harm to manufacturers
of BEG pet food.”
Scholarly journals were allegedly a big part of the problem.
Individual Hill’s-affiliated ets wrote at least 15 different journal articles that
allegedly featured intentionally false or misleading statements about DCM,
including a non-peer reviewed article asserting that grain-free diets
contributed to DCM that was widely read. Another study was, after publication,
the subject of an “Expression of Concern” written by the editors of the journal
in which it was published. “The journal did not retract the article but
provided a statement describing undisclosed financial conflicts (including
defendant and MMI), methodology irregularity, faulty reasoning and other
misconduct.” Hill’s also moderated, sponsored and controlled a private Facebook
group on diet-associated DCM in dogs with more 129,000 members. “The moderators
have repeatedly blocked, banned and deleted comments by individuals who
contradict the assertion that BEG diets are correlated with higher rates of
canine DCM, even when the commenters are board-certified veterinary
nutritionists, tenured professors at veterinary schools or others highly
qualified in pet nutrition.”
Challenged statements included:
• “[H]eart problems [are] linked to grain-free food.”
• “What seems to be consistent is that it [DCM] does appear
to be more likely to occur in dogs eating boutique, grain-free, or
exotic-ingredient diets.”
• “The FDA, researchers, and individual clinicians and pet
owners have all reported reversal of disease with a diet change.”
• “We want to be extremely clear that the FDA advisory does
not apply solely or exclusively to grain-free foods. It applies to any foods
that are generally un(der)tested or un(der)studied as long-term dog diets. We
sometimes talk about them as ‘BEG’ diets.”
• “DCM is caused by boutique brands, exotic proteins, or
grain-free or a combination thereof…”
After the FDA investigation, Hill’s revenues grew by more
than 50 per cent to $3.3 billion per year, while Ketonatural lost business and
market value: “former customers stopped buying its products, veterinarians
advised pet owners not to purchase its products and members of its target
market chose not to do so.”
For purposes of its Lanham Act analysis, the court assumed
that defendant would vicariously liable for statements by the cut-out nonprofits
and the individual veterinarians.
The big problem was commercial advertising or promotion. “Courts
have consistently concluded that scientific articles do not constitute
commercial speech and therefore cannot be the basis for false advertising
claims under the Lanham Act, even when a commercial entity has funded the
research.” However, “the secondary dissemination of scientific and academic
research can constitute actionable commercial speech under the Lanham Act if
defendant uses the material to promote its product and influence purchasers.”
Likewise, “web site links to other commercial sites, which are one step removed
from defendant’s own web site, do not render defendant’s web site commercial
speech.”
Thus, the court dismissed any claims related to statements
in scholarly journals and statements on the respective web sites of Hill’s and its
captive nonprofit which linked to articles, interviews and or/blog posts of the
individual veterinarians. (I really don’t get excusing Hill’s website here—it’s
definitely a commercial site, and linking to others’ messages is the same as a
for-profit company disseminating scientific articles in purpose and effect.)
Also, allegedly false statements by Hill’s-associated veterinarians
to mainstream media and pet owners and statements by Hill’s in educational
programs for veterinarians and on Facebook and its web sites were not
commercial speech. “At best, plaintiff alleges that the statements influenced
consumers to purchase products other than its own grain-free products— but not
to specifically purchase defendant’s products.” (This again seems wrong: giving
people reasons to avoid an entire category of competitors does promote
sales, even if there’s some leakage—that’s why disparagement of a competitor is
generally actionable.)
Using the traditional Bolger factors for identifying
commercial speech, these weren’t traditional advertisements. “[N]one of the
allegedly false statements expressly promote defendant’s products relative to
plaintiff’s products or relative to the products of other grain-based pet food
manufacturers.” They weren’t sent directly to consumers or on product
packaging. Thus, Ketonatural didn’t plausibly allege that the statements in
question “proposed a transaction or offered certain goods or services, let
alone for defendant’s products.” Also, “[t]he statements by individual
veterinarians in blog posts, to mainstream media and to pet owners are too
attenuated to deem them promotional in nature because plaintiff’s allegations
assume multiple levels of promotion before reaching an end consumer. Plaintiff
has not alleged that statements by defendant to veterinarians in educational
programs were anything but educational in nature, and the Court cannot
reasonably infer that a continuing educational program on the safety of a pet
food diet is an advertisement.”
Nor did the statements reference specific pet food
manufacturers or products. (Because they disparaged an entire category of competitors.)
Ketonatural did allege Hill’s economic motive, but that wasn’t
enough.
Hill’s also challenged Ketonatural’s claim of literal
falsity. Ketonatural argued that Hill’s made false establishment claims about
the correlation between DCM and BEG diets. A plaintiff challenging “tests
prove” or “establish” claims does not need to affirmatively prove that
defendant’s assertions are false, but only that the studies do not support the
conclusions. But the court found that this standard (which the court called “more
lenient” even though it’s not, it’s just focusing on the falsity of the “tests
prove” claim) didn’t apply, because (1) the statements weren’t made in
advertising (this makes no sense) and (2) Hill’s never claimed that studies “proved”
a link between DCM and BEG. (Reason (2) is at least coherent, though it
conflicts with cases holding that statements about scientific/health matters
are often inherently establishment claims, because they don’t make sense
otherwise—why are you invoking the FDA or “links”?)
But the court did not further agree with Hill’s that
Ketonatural’s claims were barred on the pleadings by laches. Ketonatural filed
suit within a year of the FDA announcing that it had insufficient data to
establish a causal relationship between BEG diets and DCM, and it alleged that Hill’s
did not make costly expenditures in reliance on the purported delay. Thus,
Ketonatural sufficiently alleged that its delay was reasonable, and that Hill’s
did not suffer undue prejudice.
from Blogger http://tushnet.blogspot.com/2024/11/coordinated-campaign-to-disparage-grain.html
Rebecca Tushnet 