Asterisk Can’t Save Ad Claims, California Court Says

Advertising Law

In a false advertising suit challenging the labeling for a dietary supplement, a California federal court ruling reinforced that a disclosure cannot save an unsupported ad claim.

Eugene Anthony and Amanda Holt sued Pharmavite over the claim “May help support healthy hair, skin and nails,” which appeared on packaging for three different biotin supplements sold by the defendant. Each health benefit representation included either an asterisk or obelisk symbol following the claim.

The asterisk symbol referred to a disclaimer on the back of the label, stating: “Biotin may help support healthy hair, skin, and nails in those that are biotin deficient.” Similarly, the obelisk led to a back label disclaimer that read: “May help support healthy hair, skin, and nails in those that are biotin deficient.”

Anthony and Holt alleged the claims were false and misleading because the defendant’s products do not provide any benefits to the general population. According to the plaintiffs, the human body requires only a finite amount of biotin on a daily basis and any excess is automatically flushed from the body.

Citing a report by the National Academy of Sciences Institute of Medicine, Anthony and Holt alleged that individuals require just 30 micrograms of biotin per day, so the only individuals who benefit from the defendant’s products (which contain between 2,500 and 3,000 mcg) are those with extremely rare biotin deficiencies—less than 0.00138 percent of the population.

Pharmavite moved to dismiss the putative class action. While U.S. District Judge Edward M. Chen found that a reasonable consumer was likely to be deceived by the defendant’s claims, he ultimately granted the motion based on the plaintiffs’ failure to plead with “particularity.”

“A reasonable consumer, representing a significant portion of the population, could understand this representation to mean that there is a possibility that he/she will experience benefits to his/her hair, skin, and nails from using the Biotin Products,” the court said. “But, as Plaintiffs allege, the vast majority of the population—well over 99.9 percent—cannot possibly derive any benefits from the Biotin Products, because all but the rarest of individuals already receive more than enough biotin from their daily diets. Accordingly, assuming the truth of Plaintiffs’ allegations, ‘a significant portion of the general consumer public or of targeted consumers, acting reasonably in the circumstances, could be misled’ by the health benefit representation into believing that the Biotin Products might support healthy hair, skin, and nails.”

As for the asterisk and obelisk directing consumers to the disclaimers, Judge Chen found two problems. First, there was a question of fact—whether a reasonable consumer would notice and follow the symbols to the disclaimers, the court said, noting that the U.S. Court of Appeals for the Ninth Circuit has rejected the premise that “reasonable consumers should be expected to look beyond misleading representations on the front of the box to discover the truth from the … small print on the side of the box.”

Second, even assuming the asterisk was sufficient to catch a consumer’s eye, the substance of the disclaimer was lacking, the court said. “For instance, the disclaimer does not state that the Biotin Products would not benefit those who are not biotin deficient,” the court wrote. “Nor does it explain that exceedingly few people are in fact biotin deficient. A reasonable consumer, experiencing hair, skin or nail problems, might plausibly believe that he or she has a biotin deficiency or would otherwise benefit from the product.”

Nonetheless, the court granted the defendant’s motion to dismiss, finding the plaintiffs’ complaint “lacking in the particularity of pleading,” as it made “no mention of the asterisk or disclaimer at all” and instead set forth the allegations “in vague and general fashion.”

Judge Chen granted the plaintiffs leave to amend the complaint with regard to the false advertising allegations, but dismissed Anthony and Holt’s request for injunctive relief with prejudice, as they failed to allege their intention to purchase the defendant’s products again in the future. “More critically, Plaintiffs’ claim is predicated on the premise that, as a matter of scientific fact, biotin supplements ‘are unneeded, superfluous, and will not provide any benefits’ to anyone without a biotin deficiency.”

To read the order in Anthony v. Pharmavite, click here.

Why it matters: Although the court granted the defendant’s motion to dismiss, it allowed the plaintiffs leave to amend the false advertising claim and provided something of a road map for the amended complaint. For advertisers, the decision provides a lesson in the risks of using an asterisk or obelisk to amend an ad claim with back panel disclosures.



pursuant to New York DR 2-101(f)

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