State v. Living Essentials, LLC ( 2015 )


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  • State v. Living Essentials, LLC, No. 443-7-14 Wncv (Teachout, J., February 26, 2015)
    [The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
    accompanying data included in the Vermont trial court opinion database is not guaranteed.]
    STATE OF VERMONT
    SUPERIOR COURT                                                                                         CIVIL DIVISION
    Washington Unit                                                                                        Docket No. 443-7-14 Wncv
    STATE OF VERMONT
    Plaintiff
    v.
    LIVING ESSENTIALS, LLC, AND
    INNOVATION VENTURES, LLC,
    Defendants
    DECISION
    Defendants’ Motion to Dismiss and to Strike (MPR #1)
    and the State’s Motion to Strike (MPR #3)
    Defendants Living Essentials, LLC, and Innovation Ventures, LLC, market and sell a
    beverage, in various formulations, known as “5-hour ENERGY®.” The State alleges that the
    manner in which Defendants have done so violates Vermont’s Consumer Protection Act, 9
    V.S.A. §§ 2451–2481x. Specifically, the State alleges that Defendants have made the following
    misleading and unsubstantiated representations in violation of 9 V.S.A. § 2453(a): that the
    products have various benefits, such as helping one “focus” (Count 1); that the high energy
    levels that the products cause are not followed by a “crash” (Count 2); that a large survey of
    doctors shows that the vast majority recommend the products (Count 3); and that the products
    are “suitable” for adolescents to consume (Count 4). The State seeks an injunction against
    further violations of the Act, restitution for certain consumers, disgorgement of profits, civil
    penalties, and investigation and litigation costs and fees.
    Defendants have filed a Rule 12(b)(6) motion to dismiss. They argue that all claims
    relying on an alleged lack of substantiation should be dismissed because that theory is not
    cognizable under the Vermont Act. They argue that Count 4 should be dismissed because (1) the
    FDA has primary jurisdiction to determine the safety of the product; (2) adolescents may
    lawfully consume caffeinated products such as 5-hour ENERGY®; (3) the representation is
    implied and implied representations are not subject to the Act; and (4) Vermont’s attorney
    general has no lawful authority to regulate who may consume 5-hour ENERGY®. Defendants
    argue that Count 1 should be dismissed because the alleged misrepresentations are non-
    actionable puffery. Finally, Defendants ask the court to strike paragraphs 99 and 100 of the
    complaint as impertinent and scandalous. V.R.C.P. 12(f).
    The State opposes dismissal and asks the court to strike two studies submitted into the
    record by Defendants or to convert the motion to dismiss into one for summary judgment and
    give it a fair chance to respond accordingly.
    1
    Defendants’ dismissal arguments are out of step with the standard for dismissal under
    Rule 12(b)(6). In Vermont, motions to dismiss are “‘not favored and rarely granted.’ This is
    especially true ‘when the asserted theory of liability is novel or extreme,’ as such cases ‘should
    be explored in the light of facts as developed by the evidence, and, generally, not dismissed
    before trial because of mere novelty of the allegations.’” Alger v. Dep’t of Labor & Indus., 
    2006 VT 115
    , ¶ 12, 
    181 Vt. 309
    (citations omitted); see also Colby v. Umbrella, Inc., 
    2008 VT 20
    , ¶
    13, 
    184 Vt. 1
    (“The complaint is a bare bones statement that merely provides the defendant with
    notice of the claims against it.”); Bock v. Gold, 
    2008 VT 81
    , ¶ 4, 
    184 Vt. 575
    (“the threshold a
    plaintiff must cross in order to meet our notice-pleading standard is ‘exceedingly low’”).
    The State alleges several counts of deception consisting of claims made in advertisements
    that Defendants are unable to substantiate. The advertising substantiation doctrine has a long
    history before the Federal Trade Commission. See Dee Pridgen and Richard M. Alderman,
    Consumer Protection and the Law §§ 11:3 (WL updated Nov. 2014) (describing the origins of
    the doctrine). The issue presented by this case is whether the doctrine is available to demonstrate
    violations of the Vermont Act. There is no binding authority and the issue is not so
    straightforward that the court is inclined to consider it absent an exploration “in the light of facts
    as developed by the evidence.”
    Defendants’ other dismissal arguments are similarly predicated on issues that will be
    better evaluated in evidentiary context once the facts have a chance to unfold, whether on
    summary judgment or at trial. These arguments rely on nuances drawn from statements alleged
    to appear in advertisements and regulatory motivations attributed to the attorney general by
    Defendants. The court declines to evaluate these sorts of arguments based on the allegations of
    the complaint alone.
    Defendants ask the court to strike two paragraphs of the complaint that refer to publicly
    available articles by third parties that have provocative titles implying that some people might
    believe that energy drinks may kill the consumers who drink them. The State does not allege
    that 5-hour ENERGY® is deadly. It cites the articles in support of allegations the drink’s health
    effects are not known and have prompted investigations. Because these are not impertinent and
    scandalous allegations and there is no prejudice, the court declines to strike them.
    The State’s motion to strike is denied as well. The court ignored Defendants’ extra-
    pleading materials and the record is not amenable to summary judgment.
    ORDER
    For the foregoing reasons, Defendants’ motion to dismiss and to strike is denied; the
    State’s motion to strike is denied.
    Dated at Montpelier, Vermont this 26th day of February 2015.
    _____________________________
    Mary Miles Teachout,
    Superior Judge
    2
    

Document Info

Docket Number: 443

Filed Date: 2/26/2015

Precedential Status: Precedential

Modified Date: 4/23/2018