When doing a review of your labels and advertising material, you think about Federal regulations and the risk of state Attorney Generals or district attorneys investigating your claims, but what about private attorneys?

You may believe that the only worry you could have about claims from a private attorney concern the physical injury resulting from the consumption of your product.  You may think that based on your ingredients you do not have much to worry about because the risk of someone being injured is very small.  However, there is a rise of another type of claim, one that is more dangerous and more expensive than a personal injury claim.

That type of claim is a class action claim based on a false advertising or a misbranding theory. A class action lawsuit is a form of a lawsuit that is brought by one party on behalf of a large group of individuals all having the same grievance. Recently we have been made aware of 2 such lawsuits – one in California and the other in New Jersey. These actions are based not on the theory that the product is dangerous or has hurt someone but that consumers were defrauded into buying the product based on false advertising or that the product contains an ingredient that is not a dietary supplement and therefore is misbranded as a dietary supplement.

These cases are difficult and expensive to defend.  Usually they are resolved with a payment to all members of the class in the form of a small payment, a coupon for future purchases or some other remuneration.  However in addition, the defendant must pay all the administrative fees and most expensively the plaintiff’s attorney fees for bringing the action on behalf of the class.  All of these expenses can amount to several hundred thousand if not millions of dollars in costs and fees.  This is in addition to your own attorney fees and costs.  And to make matters worse, most if not all of these costs are not covered by insurance.

So when you begin thinking about formulating and advertising that new product give thought to not only what a regulator might say but whether or not you, in an effort to clamor for the attention of a consumer or to introduce that next new ingredient make yourself an easy target for a class action law firm to try to hit the jackpot.