Hi-Tech Pharmaceuticals Wins Appeal at 11th Circuit against AllMax for Protein Spiking and Misleading Protein Content Claims

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Dec 05, 2018, 07:00 ET

NORCROSS, Ga., Dec. 5, 2018 /PRNewswire/ -- Hi-Tech Pharmaceuticals was successful in their appeal against AllMax to overturn a verdict wrongfully handed down by the district court. The appeal from the dismissal of a complaint raised questions about the relationship between the labeling requirements of the Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and federal laws against deceptive advertising. Hi-Tech Pharmaceuticals, Inc., filed a complaint that the label of a protein-powder supplement distributed by HBS International Corp. (AllMax) misleads customers about the quantity and quality of protein in each serving, violating the federal Lanham Act, 15 U.S.C. § 1125(a).

One of the Allmax products HBS distributes, the "Ultra-Premium 6-Protein Blend Hexa[P]ro," is a protein-powder drink mix marketed as a bodybuilding and workout-recovery aid. The front of the panel identifies the product as an "Ultra-Premium 6-Protein Blend" with "25 G[rams] Protein Per Serving," and it touts the product's "6 Ultra-High Quality Proteins" and "5 Amino Acid Blend with BCAAs [Branch-Chain Amino Acids]". The left side of the label identifies HexaPro as "an Ultra-Premium, Ultra-Satisfying Blend of 6 High-Quality Proteins." It elaborates on that claim by identifying the six whole-protein sources that HexaPro contains: whey protein concentrate, milk protein concentrate, whey protein isolate, micellar casein, egg albumin, and hydrolyzed whey. And it states that the product "is also fortified with 5 Amino Acids to enhance recovery". In its complaint, Hi-Tech alleged that HexaPro's label misleads consumers in three distinct but related ways.

The first concerns the quantity of protein in a serving of HexaPro. Although HexaPro contains whole proteins, it also contains free-form amino acids and other non-protein ingredients. Hi-Tech alleges that that an analysis that excludes these "spiking agents" and counts only "total bonded amino acids"—which alone are molecularly complete proteins—yields an "actual protein content" of "17.914 grams per serving," not 25 grams per serving.

Second, Hi-Tech alleges that the label is misleading about the source of the protein content. In Hi-Tech's view, the label suggests that the product's entire stated protein content derives from the whole-protein sources identified on the left side of the panel. Observing that the front label identifies HexaPro as an "Ultra-Premium 6-Protein Blend," Hi-Tech alleges that this "statement of identity is intended to lead consumers to believe that the Product contains protein derived exclusively from the 'Ultra-Premium 6-Protein Blend."

Third, Hi-Tech alleges that the front of the label is misleading about both the quantity and the source of the product's protein content. Hi-Tech alleges that the proximity of the phrase "Ultra-Premium 6-Protein Blend" to the phrase "25 G Protein Per Serving" on the front of the label misleads consumers into believing that HexaPro "contains 25 grams of the 'Ultra-Premium 6-Protein Blend'-type protein per serving," that is, the six whole-protein sources. This representation is untrue because the product is "spike[d] . . . with free form amino acids and non-protein ingredients" and, in fact, "contains only 17.914 grams of the 'Blend'-type protein per serving."

In analyzing Hi-Tech's claims the 11^th Circuit agreed with Hi-Tech that the district court erred in dismissing its claim under the Lanham Act. The Court stated "Hi-Tech has pleaded facts to support a plausible inference that a reasonable consumer would find HexaPro's label misleading. And HBS is mistaken to argue that the Food, Drug, and Cosmetic Act bars Hi-Tech's claim under the Lanham Act. The district court concluded that the complaint does not allow a plausible inference that HexaPro's label is misleading, which is the only ground on which HBS challenged the facial sufficiency of the complaint. We disagree with that ruling and reverse the dismissal of Hi-Tech's claim of false advertising under the Lanham Act.

The Court stated: "As an initial matter, we reject HBS's contention that we may disregard the supposedly "conclusory" allegation of the true whole-protein content of HexaPro when assessing the sufficiency of the complaint. Hi-Tech's allegation that a serving of HexaPro contains "17.914 grams" of bonded amino acids—that is, molecularly complete proteins—is not in any sense a "legal conclusion". The front of the label identifies HexaPro as an "Ultra-Premium 6-Protein Blend" that contains "25 G Protein Per Serving," and the left side of the label declares that HexaPro "is an Ultra-Premium, Ultra-Satisfying Blend of 6 High-Quality Proteins," which are enumerated. The nutrition-facts panel on the right side of the label represents that each serving of HexaPro contains 25 grams of protein. Despite these representations, HexaPro—taking the facts alleged as true, as we must—"does not contain 25 grams of the 'Ultra-Premium 6-Protein Blend'-type protein per serving," that is, the six whole-protein sources listed on the left side of the panel. "Rather, because [HBS] spike[s] [HexaPro] with free form amino acids and non-protein ingredients, [HexaPro] contains only 17.914 grams of the 'Blend'-type protein per serving." Considering the label as a whole and taking its statements in context, we find it plausible that a reasonable consumer would be misled to believe that a serving of HexaPro contains 25 grams of protein derived from the "6-Protein Blend" comprising the "6 High-Quality Proteins" listed on the label. HexaPro's label provides no suggestion that the claimed 25 grams of protein per serving derives from any source other than the whole-protein ingredients that make up the "Ultra-Premium 6-Protein Blend." Not counting the 25-grams figure, the label never uses the word "protein" to refer to anything other than those six ingredients. The label never explains that the figure of 25 grams includes free-form amino acids or other non-protein ingredients. Indeed, the label appears consistently to treat "amino acids" as separate from and providing distinct nutritional benefits from "protein." Based on the total impression given by the label, it is plausible that only sophisticated consumers schooled in federal regulations or nutrition science would understand or even suspect that free-form amino acids or other non-protein ingredients form any part of HexaPro's stated 25 grams of protein per serving.

"This ruling ensures all companies marketing proteins are on a level playing field," said Jared Wheat, President, of Hi-Tech Pharmaceuticals, Inc. We filed this appeal to ensure bad law was not made by the district court's ruling. We are appreciative to Judge Pryor and Tjoflat, and the 11^th Circuit panel for their hard work in ruling on this case of first impression. "Hi-Tech expects to prevail in its quest to clean up the protein field of bad actors trying to get an unfair advantage," stated Wheat.

About Hi-Tech Pharmaceuticals

Hi-Tech Pharmaceuticals (https://www.hitechpharma.com/) is a leading global dietary supplement manufacturer that develops, manufactures and distributes supplements and over-the-counter (OTC) and prescription pharmaceuticals, and other nutritional products. The company ranks among the top dietary supplement companies and generic pharmaceutical companies in several markets around the world and has among the largest capacity of U.S.-based manufacturers.Hi-Tech Pharmaceuticals has impressive capabilities to supply the global demand of pharmaceuticals. On an annual basis, Hi-Tech Pharmaceuticals can manufacture 35 billion tablets and 10 billion capsules. Hi-Tech Pharmaceuticals can also package 500 million bottles, 250 million blister packs, and 150 million pacquettes.

SOURCE Hi-Tech Pharmaceuticals, Inc.