Sep 5, 2018
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What is a Lie? How to Decide? Who Decides?

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Recently Rudy Giuliani was broiled for saying that the truth isn’t the truth.  Denying a tautology won’t typically earn one high marks for logic.  Add in the callback to Pontius Pilate’s “What is truth” question, and it sounds like bad epistemology in service of bad morality.  But we’re not here to talk politics.  Nor are we here to try to answer Pilate’s question.  Maybe the Drug and Device Law Daughter, who is just starting her second year at Harvard Divinity School, can field such questions.  We cannot.

As a former prosecutor of mail frauds and wire frauds and as a current defender of companies accused of consumer fraud, the question we have faced is usually more along the lines of “what is a lie.” It is not merely the opposite side of the street, though it surely is in the same neighborhood.  Liars are everywhere.  They overstate their income when applying for a loan.  They understate their income when reporting to the IRS.  They use sucker lists to lure retirees into investing in nonexistent oil wells.   They loot companies via creative accounting.  They tell us our table will be ready in “just a few minutes.”  They tell us our flight is “On Time.”  They check the box saying they have read and they accept the terms and conditions.  They pretend not to want the last slice of pizza.

What makes something a lie that leads to liability?    Even putting aside the difficult issue of discerning a defendant’s intention to prevaricate, how does the law tackle claims that someone did wrong by uttering something at odds with the truth?  The police are not the truth police, and civic dockets could not bear the strain if every lie led to a lawsuit.  So the law has introduced concepts of materiality and detrimental reliance.  A lie is actionable only if it made a difference. It had to have fooled someone who is not a fool.  It had to have caused harm.

One summer, between our junior and senior years in college, we worked in the New Jersey legislature.  It was the summer of the FBI’s Abscam investigation (see American Hustle).  A couple of politicians, including a U.S. Senator, six members of the House of Representatives, a New Jersey State Senator, and the Mayor of Camden, did perp walks on their way to corruption convictions.   But the legislators and staffers we worked with were a competent and honorable group.  One of them focused on consumer fraud matters.  He told us that anytime a state investigator wanted to ring up some citations, all that was required was a visit to a nearby supermarket.  Weigh some packaged meat, compare to the stated weight, and – voila! – there would almost certainly be a discrepancy.  Evaporation and the passage of time produced a lie.   Thankfully, a rule of reason prevailed.   Nobody was really deceived or hurt.   Let’s be grownups about this.   There are plenty of real frauds to pursue.  It wasn’t cynicism; it was realism, aided by a set of reasonable priorities.

Years later, we found ourselves in Southern California.   It’s hard to say why it’s so, but it quickly became clear to us that folks on the west coast were a lot less tolerant of puffery or even the slightest deviation from their idea of truth and purity.  Is it a state of innocence?  Does life under perpetually sunny skies foster a heightened sense of entitlement?  Look at the lawsuits alleging that a company incorrectly called its product organic or natural.  They are not all filed in California, but it seems that most of them are.  Even so, most of those lawsuits don’t get much traction in the courts, because a regulatory agency had made a determination  of what could and could not be put on a product label.  In such cases, courts don’t need to engage in science, or semantics, or epistemology.  It turns out that sometimes Pontius Pilate’s question is preempted.

Today’s case originated in Southern California: Welk v. Nutraceutical Corp., 2018 U.S. Dist. LEXIS 135595, 2018 WL 3818033 (S.D. Cal. Aug. 10, 2018).  The plaintiff had purchased liquid vitamin B12 and complained that the packaging overstated its contents.  The claim centered on test results from a “reputable supplement analysis center located in California” showing that, once opened, the liquid vitamin B12 “undergoes degradation at an unknown rate.”  After only 11 days, a sample of the product weakened from 255 ug/ml to 213 ug/ml.  The plaintiff contended that the amount of B12 eventually “becomes negligible and ineffective.” Thus, the bottle’s label was “untrue, false, and misleading.”  The complaint included various actions for misrepresentation, and did so on behalf of a purported class of consumers.

Tell the truth: this claim does not exist unless it is a class action, right?  And what does that tell you?

Stepping back for a moment, doesn’t this claim remind you of the statement on cereal boxes about how the contents may have settled? When you are a child, this statement might possibly have arrived as unpleasant news.  Open a box of Cap’n Crunch, and one is greeted by almost as much air as nuggets of cavity-inducing goodness. But as adults, we read this statement with calm resignation.  Perhaps that is because we, too, our bodies and our minds, have settled over time.

The defendant in Welk moved to dismiss the claim for various reasons.  The best of those reasons was that the claim was preempted by the Food, Drug, and Cosmetic Act, as amended by the Nutrition Labeling and Education Act.  There is an express preemption provision barring state law food labeling requirements that are “Not identical” to federal regulations.  The FDA regulates the labeling of the “quantitative amount” of nutrient supplements such as vitamin B12, and decrees application of a specific testing methodology.  The defendant’s labeling complied with the FDA’s labeling and testing methodology.

How does the plaintiff endeavor to evade preemption?  The plaintiff argued that the defendant improperly failed to disclose the fact of degradation.  But that assertion of degradation rests upon a testing methodology that is certainly not “identical” to the one mandated by the FDA.  Accordingly, the court, in a very short, very to-the-point decision, held that the plaintiff’s misrepresentation claims were preempted and must be dismissed.  Was the vitamin label a lie?  Not really.  As with many of the cases we encounter, the alleged lie was one of omission.  Tell me more, says the plaintiff.  One can always think of more.   How to decide?  There’s a scientific test.  Who decides?  The FDA.

We cannot count ourselves surprised by the result in Welk.  It is consistent with several others we have seen in food and nutraceautical cases.   But we do count ourselves as envious.  Most of our cases involve drugs and medical devices.  (No surprise there; take a look at the title of this blog.  Please don’t accuse us of false advertising because today’s case involves neither a drug or device.  We’re about to tie it together, okay?  Okay.  Here goes.). The preemption language for medical devices is there, but it’s been unduly watered down by a couple of courts.  The logic for preemption of drug labeling is there, but it, too, was overly cabined in some regrettable judicial decisions that are starting to collapse from their contradictions. (Many of those decisions indulged in a presumption against preemption – a presumption that has since been discredited.) Imagine if food preemption rules applied to all the products regulated by the FDA. Think of the logic, consistency, clarity, and efficiency.  We could use a little more of that in the DDL world.

That is no lie.



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Article Categories:
conflict preemption · FDA · Fraud · Preemption

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