United States District Court, S.D. California
NUTRITION DISTRIBUTION LLC, an Arizona Limited Liability Company, Plaintiff,
PEP RESEARCH, LLC, a Texas Limited Liability Company dba International Peptide; BRIAN REYNDERS, an individual; FRED REYNDERS, an individual; MASTERCARD INTERNATIONAL INCORPORATED, a Delaware Corporation; AUTHORIZE.NET, a Utah Corporation; AMAZON PAYMENTS, a Washington Corporation; and DOES 1 through 10, inclusive, Defendants.
WILLIAM Q. HAYES United States District Judge
matter before the Court is the motion to dismiss filed by
Defendants PEP Research LLC, Brian Reynders, and Fred
Reynders. (ECF No. 11).
December 30, 2016, Plaintiff Nutrition Distribution LLC filed
a first amended complaint. (ECF No. 11). The amended
complaint alleges a cause of action for false advertising in
violation of § 42(a)(1)(B) of the Lanham Act against
Defendant PEP Research LLC dba International Peptide
("PEP") and a cause of action for a violation of
the Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. § 1962, against Defendants
PEP, Brian Reynders, Fred Reynders, Mastercard International
Incorporated, Authorize.net, Amazon Payments, and Does 1
January 13, 2017, PEP, Brian Reynders, and Fred Reynders
("Defendants") filed a motion to dismiss for
failure to state a claim. (ECF No. 11). On February 20, 2017,
Plaintiff filed a response in opposition. (ECF No. 13). On
February 27, 2017, Defendants filed a reply. (ECF No. 14).
ALLEGATIONS OF THE COMPLAINT
is a "cutting edge sports supplement manufacturer and
marketer" and "leader in the nutritional supplement
market, specifically for bodybuilding." (ECF No. 9 at
¶ 24). "Plaintiff has several categories of
bodybuilding products, including pre-workouts,
muscle-gainers, fat burners, and male performance
enhancement." Id. ¶ 25. "Plaintiff
has introduced numerous natural supplements that directly
compete with Defendant's 'Research Chemicals, '
including but not limited so, 'Advanced PCT, '
"UltraReps, ''StackedBCAA, ' 'SuperSize,
' 'Gym Juice, ' and
'GermanCreatine.'" Id. ¶28.
PEP is a competing supplement company. Id. ¶
29. Defendant PEP is engaged in "false and misleading
advertising and statements in connection with its various
purported 'research peptides and chemicals, '
including but not limited to, numerous well-known
prescription only drugs, Selective Androgen Receptor
Modulators ('SARMS') and synthetic peptides
(collectively, the 'Research Chemicals')."
Id. ¶ 1. Defendant PEP offers
"prescription-only drugs" such as Sildenafil
Citrate and Talafadil for sale on its website. Id.
¶ 2. "Like the other products advertised and
available for sale on its website, Defendant [PEP] has
mislabeled these products as 'not for human
consumption' and intended for laboratory research
[PEP] markets and sells various S ARMs, which are synthetic
drugs with similar effects to illegal anabolic steroids . . .
[and] may pose significant health and safety risks to
consumers." Id. ¶ 4. Defendant PEP
"fails to disclose that SARMs are specifically
prohibited for use in sporting events by the World
Anti-Doping Agency and the U.S. Anti-Doping Agency, despite
the fact that Defendant markets its products to bodybuilders,
competitive athletes, and other consumers seeking to improve
their physical performance and physiques." Id.
Defendant [PEP] advertises and offers for sale various
synthetic peptides, which cannot be dispensed for human use
without a prescription from a licensed medical practitioner
due to their toxicity and potentially harmful effects."
Id. ¶ 6. "Defendant [PEP] mislabels these
products as 'not for human consumption' and
'intended for laboratory research only, ' but clearly
markets its 'research chemicals' to consumers for
personal use." Id. ¶ 6.
Defendant represents to consumer that its so-called
"research chemical" Sermorelin is commonly used as
a "doping substance in sports, " and assures
consumers of the product's safety for personal use,
"Sermorelin alone or combined with GHRP-2 and GHRP-6 is
a harmless and efficient way to stimulate and enhance your
body's growth hormone production."
[T]he product description for Defendant's "research
chemical" Clenbuterol acknowledges human consumption,
despite its purported "disclaimers" -
"Clenbuterol has been popularized in the public mind
recently by media potrayals of off-label use for fat loss, as
well as some professional athlete doping scandals involving
the drug." [Defendant PEP] then proceeded to post
advertisements on its Facebook account containing a free
product give away contest for Clenbuterol, and to award a
personal fitness trainer as the contest recipient of a free
bottle of Clenbuterol."
Id. ¶ 8. "Defendant's use of falsely
marketed substances has the tendency to deceive a substantial
segment of the public and consumers . . . into believing that
they are purchasing a product with different
characteristics." Id. ¶ 50. "The
deception is material because it is likely to influence a
consumer's purchasing decision, especially if the
consumer is unaware of the serious risks of using these
purported 'Research Chemicals, ' and/or steroids or
illegal substances." Id. ¶ 51.
"[Defendant PEP's] 'Research Products'
directly compete with Plaintiffs products . . . ."
Id. ¶ 53. "Defendant's false and
misleading advertising is harmful to the marketplace for
dietary and natural nutritional supplements, including
Plaintiffs products, and potentially to individual
consumers." Id. ¶39. "[U]sers of
[Defendant PEP's] 'Research Chemicals' have
little incentive to use Plaintiff s natural nutritional
supplements until they are hurt or the 'Research
Chemicals' are taken off the market." Id.
"Plaintiff has suffered both an ascertainable economic
loss of money and reputational injury by the diversion of
business from Plaintiff to [Defendant PEP] and the loss of
goodwill in Plaintiffs products." Id. ¶
Rule of Civil Procedure 12(b)(6) permits dismissal for
"failure to state a claim upon which relief can be
granted." Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil
Procedure 8(a) provides that "[a] pleading that states a
claim for relief must contain... a short and plain statement
of the claim showing that the pleader is entitled to
relief." Fed.R.Civ.P. 8(a)(2). Dismissal under Rule
12(b)(6) is appropriate where the complaint lacks a
cognizable legal theory or sufficient facts to ...