In re: Elysium Health-Chromadex Litigation

Background

The case involves ChromaDex, Inc., a supplier of the dietary ingredient nicotinamide riboside, and Elysium Health, Inc., a former ChromaDex wholesaler that became a competitor. The parties asserted false-advertising and unfair-competition claims under the federal Lanham Act and deceptive-trade-practices claims under New York General Business Law § 349. Elysium’s third amended counterclaims also included a copyright-infringement claim.

The existing counterclaims alleged that ChromaDex made misleading statements about Tru Niagen, including statements about its safety, effectiveness, clinical support, and status as an authorized or legitimate source of nicotinamide riboside. The proposed supplemental allegations concerned ChromaDex press releases and related consumer reactions about whether Tru Niagen could mitigate, prevent, treat, diagnose, or cure COVID-19. The proposed allegations also referred to a November 2020 warning letter from the Food and Drug Administration and Federal Trade Commission concerning those representations.

Motion to Amend

Elysium moved under Federal Rule of Civil Procedure 15(d), which allows a court, with reasonable notice and on appropriate terms, to permit a party to add allegations about events occurring after the pleading being supplemented. Elysium sought three changes: removal of its copyright claim, addition of an allegation about an October 2020 change to the ChromaDex website, and addition of approximately 25 paragraphs concerning COVID-19-related statements.

The first two requests were unopposed. The request to remove the copyright claim was granted, and the request to add the website allegation was also granted. ChromaDex opposed the COVID-19 allegations.

Court’s Analysis

The court explained that supplemental facts must have a sufficient connection to the original pleading. It found that the proposed COVID-19 allegations had only an attenuated relationship to the existing allegations. The proposed allegations concerned different representations, about different product characteristics, made at different times and through different means. They focused on ChromaDex’s own press releases and clinical-study descriptions, while the existing counterclaims focused in significant part on whether ChromaDex was responsible for statements by a blogger or affiliate and whether those statements were misleading.

The court also found undue delay. According to the opinion, Elysium knew or should have known about the press releases and consumer reactions months before filing its motion, yet did not raise the proposed amendment while repeatedly seeking extensions of discovery. The court concluded that the December 14, 2020 motion came too close to the February 9, 2021 fact-discovery deadline and the planned trial preparation.

The court further found that allowing the new allegations would cause undue prejudice to ChromaDex. The additional claims would require substantial new discovery, including renewed document searches and review, possible additional expert and third-party discovery, and additional preparation for trial. The court also concluded that the amendment would substantially delay resolution of a case that had already been pending since 2017 and had received several discovery extensions.

The court did not decide whether the proposed COVID-19 allegations would state a legally sufficient claim. It held that the connection, delay, and prejudice grounds independently, and especially in combination, were sufficient to deny that part of the motion.

Disposition

The court directed the Clerk of Court to close Docket No. 166, stating that the motion was GRANTED IN PART and DENIED IN PART. The motion was granted as to removal of the copyright-infringement claim and addition of the website allegation, and denied as to the COVID-19-related allegations. The court also directed the Clerk to close Docket No. 157 because it no longer remained pending.