Opinion
B160352.
7-8-2003
NATIONAL COUNCIL AGAINST HEALTH FRAUD, INC., Plaintiff and Appellant, v. BOTANICAL LABORATORIES, INC, et al., Defendants and Respondents.
Law Offices of Morse Mehrban, Morse Mehrban, Marc Angelucci for Plaintiff and Appellant. Foley & Lardner, Tami S. Smason, Shana T. Mintz; Alvin J. Lorman for Defendants and Respondents.
Respondents manufacture homeopathic remedies. They are being sued for false advertising and unfair business practices. Respondents successfully moved to strike the complaint on the grounds that it is a Strategic Lawsuit Against Public Participation (SLAPP). (Code Civ. Proc., § 425.16.) We affirm the judgment in favor of respondents because there is no reasonable probability that appellant will prevail on its claims.
This opinion will refer to the statute as section 425.16 or the anti-SLAPP statute.
FACTS
Allegations in Appellants Complaints
Appellant National Council Against Health Fraud, Inc., is a nonprofit organization that "focuses upon health misinformation, fraud and quackery as public health problems." Appellant opposes homeopathic remedies and is suing those who manufacture them. Appellants eight lawsuits assert fundamentally the same claims. The cases were related in the trial court and are consolidated on appeal.
The manufacturers are respondents Botanical Laboratories, Inc.; Boericke & Tafel, Inc.; Nelson Bach USA Ltd.; Washington Homeopathic Products; Natures Way Products, Inc.; Hylands, Inc.; Standard Homeopathic Co.; and Weleda, Inc.
Appellant challenges the labeling and promotion of respondents homeopathic products. Appellant lists hundreds of products sold by respondents that address every conceivable malady, from acne to varicose veins. Appellant asserts that none of respondents homeopathic products "performs any of the functions attributed thereto" and that respondents knew or should have known that their advertising "was untrue and misleading." Respondents have allegedly violated Business and Professions Code provisions that regulate unlawful advertising and business practices.
Respondents Demurrers to the Complaints
Respondents filed consolidated demurrers. They argued that federal law preempts appellants claims; that homeopathic remedies should be regulated by administrative agencies, not by the courts; and that appellant has failed to plead its claims with sufficient particularity. Appellant opposed the demurrers.
Respondents Consolidated Motion to Strike Under the Anti— SLAPP Statute
In addition to their demurrers, respondents also brought a motion to strike the complaint under the anti— SLAPP statute. Respondents argued that appellants lawsuit attacks constitutionally protected commercial speech. Because appellants claims affect protected speech, respondents reasoned that appellant must establish a reasonable probability of prevailing on its claims.
Appellant opposed the motion to strike, arguing that it is likely to prevail on its claim that respondents engage in false advertising regarding the efficacy of their drugs. In support of its opposition, appellant submitted declarations from three experts. Dr. Blumenkrantz, a physician specializing in kidney disease and nutrition, stated, "It is commonly known within the medical community that homeopathic remedies, in general, are untested for efficacy. Absent contradictory evidence, I will have to assume the same to be true of the homeopathic remedies at issue in this case. Given the lack of such testing, most modern medical practitioners and nutritionists reject homeopathic remedies as a legitimate part of their practice." According to Dr. Blumenkrantz, patients are likely to be misled about the products effectiveness in treating or curing any ailment.
Appellants second expert, John Budny, is a medical biochemist, toxicologist and forensic examiner. He stated that the only scientifically valid means of objectively assessing the efficacy of a drug is through clinical trials, and the drug must be manufactured under strict regulation. Budny explained that homeopathy originated some 200 years ago, and that its followers conduct "provings" in which herbs, minerals and animal substances are administered to healthy people and their effects observed. The "provings" are not clinical investigations using scientific protocols, thus "there is no biochemical or scientific basis for claims about the efficacy of homeopathic remedies in relieving or treating a health condition or symptom."
Appellants third expert, James Adams, Jr., is a pharmacologist and pharmaceutical chemist who studies the physical and chemical properties of plant, mineral and animal substances and the manner in which drugs are absorbed and used in the body. Like the other experts, Adams declared that the only valid means of assessing the efficacy of a drug is through clinical trials using modern scientific protocols and, once a drug is approved, by employing stringent manufacturing practices.
Appellants attorney declared that respondents websites and sales literature do not say anything about clinical trials or investigations performed on their products. Respondents countered that they are not required to perform clinical trials as a matter of law, and that appellant failed to show that respondents representations regarding the effects of their products are untrue, misleading, unlawful, fraudulent, unfair or deceptive.
Actually, the website pages attached to the attorneys declaration state that the products of respondent Botanical Laboratories are "clinically tested" and adhere "to strict pharmaceutical quality standards." Likewise, promotional material from the other respondents mentions the use of clinical studies to determine efficacity.
False advertising and unfair competition actions may be brought by the government or by any person or entity acting on behalf of the public. (Bus. & Prof. Code, §§ 17204, 17535.) The plaintiff bears the burden of proving that the defendants advertising claim (1) is false or misleading and (2) is likely to deceive the reasonable consumer to whom the practice was directed. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267, 833 P.2d 545;
The Trial Courts Ruling
The trial court granted respondents motion for dismissal based on the anti-SLAPP statute. The court found that respondents had engaged in protected commercial speech, and that appellant had failed to show a probability of succeeding on the merits of its case. The court sustained demurrers to appellants complaint with leave to amend. By stipulation, appellants complaint was dismissed with prejudice.
DISCUSSION
1. Ruling on the SLAPP Motion
a. Standards for Reviewing SLAPP Motions
The anti-SLAPP statute is aimed at curbing "lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." ( § 425.16, subd. (a).) The statute safeguards statements made in connection with issues of public interest and "any other conduct in furtherance of the exercise" of the right to petition or the right of free speech. ( § 425.16, subd. (e).) The goal is to eliminate meritless litigation at an early stage of the proceeding. (Macias v. Hartwell (1997) 55 Cal.App.4th 669, 672.) An order granting a special motion to strike pursuant to section 425.16 is directly appealable. (§ 425.16, subd. (j).)
There are two components to a motion to strike brought under section 425.16. First, the defendant must make a threshold showing that the lawsuit arises from protected First Amendment activity. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, if the lawsuit affects protected speech, the court determines whether there is a reasonable probability that the plaintiff will prevail on the claim. ( § 425.16, subd. (b)(1); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76; Schoendorf v. U.D. Registry, Inc. (2002) 97 Cal.App.4th 227, 238.).
We need not address the first step of the anti-SLAPP analysis: appellant concedes that its claims fall within section 425.16 because they affect protected commercial speech. Thus, the only question is whether appellant is likely to prevail on its claims.
Plaintiff bears the burden of establishing a probability of prevailing on the merits. ( § 425.16, subd. (b)(1).) The trial court considers "the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." ( § 425.16, subd. (b)(2).) "In order to establish the requisite probability of prevailing [citation], the plaintiff need only have "stated and substantiated a legally sufficient claim." [Citation.] Put another way, the plaintiff "must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."" (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.)
Resolution of the motion does not require evidence weighing or credibility determinations; rather, the court decides the motion on the affidavits, seeing whether, as a matter of law, plaintiff has failed to show a necessary element of its claim or there is a complete defense. (Wilson v. Parker, Covert & Chidester (2002) 28 Cal.4th 811, 821; Walker v. Kiousis (2001) 93 Cal.App.4th 1432, 1444; Kashian v. Harriman (2002) 98 Cal.App.4th 892, 906.) Review of the trial courts determination is de novo. (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585.)
b. Unlawful Advertising and Business Practices Claims
False advertising is unlawful. Business and Professions Code section 17500 makes it unlawful "with intent directly or indirectly to dispose of real or personal property . . . to make or disseminate . . . before the public in this state . . . [by any] means whatever, . . . any statement, concerning that real or personal property . . . which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading." A violation of Business and Professions Code section 17500 constitutes unfair competition under Business and Professions Code section 17200. South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 878.)
Appellant has abandoned its second cause of action under Business and Professions Code section 17508.
c. Appellant Failed to Show a Probability of Prevailing on Its Claims
It is apparent from appellants pleadings and its expert affidavits that appellant performed no tests to determine the efficacy of respondents products. Instead, appellant broadly asserts that (1) homeopathic remedies are, in general, untested for efficacy and (2) most of the modern medical community rejects homeopathic remedies. From this, appellant leaps to the conclusion that all of respondents products are worthless; therefore, any advertising claiming that respondents products are efficacious is false and misleading.
The generalities asserted by appellants experts are insufficient to survive respondents motion to strike under the anti-SLAPP statute. Appellants medical expert Dr. Blumenkrantz could only "assume" that respondents homeopathic remedies are not clinically tested; biochemist Budny questioned the methods by which homeopathic remedies have developed over the last 200 years; and pharmacology expert Adams stated that drug efficacy can only be measured through clinical trials. None of the experts say anything about the efficacy of respondents specific products, nor do they rebut the veracity of any statement made by respondents.
In the context of a lawsuit against manufacturers of homeopathic remedies, "there is nothing in the nature of a false advertising action that makes it difficult for a plaintiff to prove the allegations of the complaint. The homeopathic remedies are marketed and readily available for testing by a plaintiff. The falsity of the advertising claims may be established by testing, scientific literature, or anecdotal evidence." (National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc. (2003) 107 Cal.App.4th 1336, 1348.) Appellant presented no admissible, prima facie evidence that respondents advertising is, in fact, false. As a result, appellant cannot establish a probability of prevailing. Demonstrably false advertising is, of course, a necessary element of appellants claim. In addition, appellant presented no evidence at all that respondents advertising is likely to deceive consumers.
Appellant has failed to establish any likelihood of prevailing on its unfair business practices claim. An unfair business practice ""offends an established public policy or . . . is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers."[]" (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.) Appellant contends that the standard for an unfair business practice is met here because "one should not be able to claim a drug is efficacious without having conducted a controlled clinical investigation on the drug."
There are two problems with appellants argument. First, there is no evidence that respondents failed to conduct clinical investigations on their products. Second, even if we presume that respondents did not conduct clinical investigations, appellant cites no federal or state law requiring that homeopathic remedies be subjected to controlled clinical investigations.
The Food, Drug and Cosmetic Act allows the marketing of the drugs listed in the Homeopathic Pharmacopoeia of the United States. (21 U.S.C. § 321(g)(1); National Council Against Health Fraud, Inc. v. King Bio, supra, 197 Cal.App.4th at p. 1348; U.S. Food & Drug Admin. Off. of Regulatory Affairs, Compliance Policy Guides (rev. 1995) § 400.400 (CPG 7132.15) <http://www.fda.gov/ora/compliance ref/cpg/cpgdrg/cpg400-400.htl., p. 1> hereinafter, FDA Compliance Policy Guides.) Homeopathic remedies must meet the standards for strength, quality and purity set forth in the Homeopathic Pharmacopoeia. (21 U.S.C. § 351(b).) The government acknowledges that a products compliance with those standards "does not establish that it has been shown by appropriate means to be safe, effective, and not misbranded for its intended use." (FDA Compliance Policy Guides, supra, at p. 2.) If a homeopathic remedy is promoted for uses "significantly beyond recognized or customary practice of homeopathy," federal policies on health fraud would apply. (Id. at p. 1.)
California also recognizes the Homeopathic Pharmacopoeia as an "official compendium." (Health & Saf. Code, § _ 109985.)
Given the federal governments recognition of the Homeopathic Pharmacopoeia, appellant has to show that respondents remedies are promoted for uses significantly beyond what is customary in homeopathy. Appellant made no effort to do so. Instead, appellant lumped all of respondents hundreds of products together, without making any distinctions between them. Absent evidence from appellant, we cannot discern whether any of respondents products were promoted for noncustomary uses. All we are left with is appellants belief that the federal government should not recognize homeopathic remedies in the first instance.
2. Ruling on the Demurrers
Respondents raised a number of issues in their demurrers to the complaints. We do not reach the issues raised by the demurrers because we have already determined that the complaints were properly dismissed pursuant to the anti-SLAPP statute. There is no need to find more than one basis for dismissing the complaints.
CONCLUSION
Appellant believes that no one should be allowed to market homeopathic remedies. Congress has decided otherwise, and officially recognizes the Homeopathic Pharmacopoeia. Appellants broad-brush approach of sweeping all homeopathic remedies into a single bag marked "undesirable" simply does not work in the courts, where each claimed instance of unfair advertising and unfair business practice must be closely scrutinized. Appellant failed to present any admissible evidence in this case that respondents are guilty of false advertising and unfair business practices with respect to any of their products.
DISPOSITION
The judgment is affirmed.
We concur: NOTT, J., and ASHMANN-GERST, J.