The Natural Products Association (NPA) has filed amicus curiae brief in the U.S. Supreme Court defending the dietary supplement industry against an overreaching and potentially damaging decision by the Ninth Circuit Court of Appeals.
The case, Matrixx Initiatives, Inc. v. Siracusano, presents the critical question of whether mere nondisclosure of adverse event reports (AERs) can give rise to liability under federal securities laws—even when those reports are not statistically significant. In an unprecedented decision, the Ninth Circuit held that the answer is “yes,” and permitted a class action lawsuit to proceed.
“While the case involves an over-the-counter product, there are clear implications for the supplement industry, especially as the reporting requirements for OTCs and supplements were enacted in the same piece of legislation,” said John Gay, Executive Director and CEO of the Natural Products Association. “In this brief, we were able to focus on our industry’s perspective, and bring to bear NPA’s experience with the legislative history of the law that created the AER system.”
“The decision is wrong because evaluation of safety signals is a scientific judgment ultimately made by the FDA. Companies cannot possibly guess in advance what will be deemed adequate disclosure years later in collateral litigation,” said Scott Bass, of NPA’s counsel Sidley Austin LLP. “The statute explicitly states that AERs are not proof of causation.”
“The practical consequence of the Ninth Circuit’s decision, if it is not reversed, is that manufacturers of dietary supplements very likely will be forced to disclose all AERs, however insignificant, in order to avoid merit less—but expensive—strike suits against the supplement industry,” said Jonathan Cohn, who authored the brief for Sidley Austin.
“The Ninth Circuit’s action is not good for manufacturers, not good for consumers, and just is not good law. We hope the Supreme Court will agree,” said Gay.
The Natural Products Association (NPA), founded in 1936, is the largest and oldest nonprofit organization dedicated to the natural products industry, representing more than 10,000 retailers, manufacturers, wholesalers and distributors of natural products, including foods, dietary supplements, and health/beauty aids. As the leading voice of the natural products industry, the NPA’s mission is to advocate for the rights of consumers to have access to products that will maintain and improve their health, and for the rights of retailers and suppliers to sell these products. Visit www.NPAInfo.org.