Sabatano v. Iovate Health Sciences U.S.A. Inc.

Background

Tom Sabatano and Daniel Barzoloski brought a proposed class action against Iovate Health Sciences U.S.A. Inc., also known as Muscletech. They alleged that Iovate’s Platinum 100% BCAA 8:1:1 dietary supplement was marketed with statements including “Promotes Muscle Protein Synthesis,” “ensures that your muscles are primed for musclebuilding,” and “key building blocks of muscle.” According to the plaintiffs, the product contained three essential amino acids, while building muscle required all nine, and taking the product alone could negatively affect muscle-protein synthesis.

Sabatano alleged that he bought the product in New York for approximately $30, and Barzoloski alleged that he bought it in California for approximately $30. Each claimed to have read and relied on the packaging. Their amended complaint asserted claims under the Magnuson-Moss Warranty Act, New York and California consumer-protection statutes, breach of express and implied warranties, fraud, and unjust enrichment. Iovate moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a claim.

Reasonable-Consumer and Statutory Claims

The court dismissed the claims under New York General Business Law §§ 349 and 350, the California Consumers Legal Remedies Act, the California Unfair Competition Law, and the California False Advertising Law. The court held that a reasonable consumer would not understand the packaging to say that Platinum BCAA alone, without food or exercise, would build muscle.

The court emphasized that the package prominently identified the product as a “DIETARY SUPPLEMENT.” Under the federal Food, Drug, and Cosmetic Act, a dietary supplement is not represented for use as a conventional food or as the sole item of a meal or diet. The court also concluded that the challenged statements said the product “promotes” muscle-protein synthesis, “primes” muscles for musclebuilding, and provides building blocks; they did not say that the product alone would build muscle.

Warranty Claims

The court dismissed the Magnuson-Moss Warranty Act claim because the plaintiffs did not allege that they used the product for a specified period and failed to achieve a specified level of performance. The court did not reach Iovate’s separate argument that federally regulated food labels could not form the basis of a written warranty.

The court allowed both plaintiffs’ breach-of-express-warranty claims to proceed. Although the court was skeptical that a breach occurred and whether the plaintiffs’ notices were timely, it concluded that those issues were not appropriate for resolution at the motion-to-dismiss stage. The plaintiffs alleged that the packaging statements induced their purchases, that the product did not work as warranted, and that they sent Iovate letters requesting corrective action.

The court dismissed Sabatano’s implied-warranty claim because New York law required a direct contractual relationship, or privity, where the claimed loss was economic, and Sabatano conceded that he lacked privity with Iovate. The court allowed Barzoloski’s implied-warranty claim to proceed because he purchased the product in California and alleged reliance on the manufacturer’s written packaging; under the law applied by the court, privity was not required in those circumstances.

Fraud and Unjust Enrichment

The court dismissed the fraud claim. It held that the plaintiffs had not plausibly alleged that the packaging statements were false or misleading, and therefore had not met Rule 9(b)’s heightened requirement that fraud be pleaded with particularity.

The court also dismissed the unjust-enrichment claim. It found that the claim duplicated the plaintiffs’ statutory, contract, and tort theories because it relied on the same allegations that Iovate obtained revenue through deceptive labeling.

Injunctive Relief

The court dismissed the requests for injunctive relief. A plaintiff seeking an injunction must show a likelihood of future injury, not only past harm. The plaintiffs alleged that they would not have bought Platinum BCAA if they had known its true nature, but they did not allege that they intended to buy it in the future. The court also noted that the surviving warranty claims could be addressed through damages.

Leave to Amend and Disposition

The court denied the plaintiffs’ request for another opportunity to amend. It found that the defects were substantive and would not be cured by better pleading, and noted that the plaintiffs had already declined a prior opportunity to amend.

Judge Vincent L. Briccetti granted in part and denied in part Iovate’s motion to dismiss. Sabatano’s express-warranty claim, and Barzoloski’s express-warranty and implied-warranty claims, were allowed to proceed. All other claims were dismissed. The court ordered Iovate to answer the amended complaint by July 6, 2020.