Law Firm Prevails on Motion to Dismiss False Advertising Lawsuit Against Supplement Manufacturer for Allegedly Selling Designer Drug Ostarine

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The United States District Court of Arizona will allow a lawsuit to proceed against supplement maker Custom Nutraceuticals for allegedly selling a steroid-like compound called Ostarine. The lawsuit was brought by Los Angeles Law Firm Tauler Smith LLP on behalf of supplement maker Nutrition Distribution and claims that New York manufacturers, Custom Nutraceuticals and DNA Pharma marketed the Selective Androgen Receptor Modulator (SARM) Ostarine without disclosing to purchasers the side effects and by falsely labeling the product "NOT FOR HUMAN CONSUMPTION."

The U.S. District Court will allow claims against supplement maker Custom Nutraceuticals LLC (“Custom”), JRM Nutrasciences and Jason Mancuso dba DNA Pharma proceed after denying defendants’ Motion to Dismiss in a ruling published on July 8. Custom was sued by competitor Nutrition Distribution in federal court on January 26, 2016 (Case 2:16-cv-00173-DGC). According to the First Amended Complaint, Defendants marketed the SARM “Ostarine” as “NOT FOR HUMAN CONSUMPTION” while simultaneously advertising and selling its product as a new miracle body building drug.”

Plaintiff Nutrition distribution alleged in Court papers that Defendants’ ability to market the bodybuilding drug Ostarine without disclosing its harmful side effects or disclosing that international anti-doping groups have banned the product had a harmful effect on the marketplace and potentially to individual consumers. Plaintiff, who sells its own line of bodybuilding supplements, further alleged “users of [Ostarine] have little incentive to use a natural product.”

Defendants filed a motion to dismiss claiming that the lawsuit should be dismissed or stayed due to the “primary jurisdiction doctrine” which provides that certain matters involving nutritional supplement regulations be under the exclusive purview of the Food and Drug Administration (“FDA”).

The Court rejected Defendants’ theory, holding that “the Court need not consult the FDA to determine whether it is false and misleading to label a product as ‘not for human consumption’ while touting the benefits of such consumption…. Nor does the Court require the FDA’s expertise to determine whether it is false and misleading to market a product to competitive athletes while neglecting to mention that it has been banned by the World Anti-Doping Agency and the U.S. Anti-Doping Agency.” (Opinion at 3:13-16,23-26). The Court continued its analysis by observing “Plaintiff’s theories do not require the Court to determine whether Ostarine is a drug or whether Defendants’ sale of Ostarine violated the FDCA [“Food, Drug, and Cosmetic Act”]. Even if Defendants are lawfully marketing Ostarine as a nutritional supplement, their statements about the product may still be false and misleading.” (Opinion, 4:25-5:3).

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Robert Tauler
Tauler Smith LLP
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