What's next for NPA and CRN in their complaints against New York state?

Photo © iStockphoto.com/KLH49

The New York law banning the sale of weight management and muscle-building supplements has officially gone into effect as of April 22, 2024. When New York’s Governor Kathy Hochul signed the bill into law at the end of October, it was the first of a series of bills that proposed to do the same thing: ban minors from buying weight management and muscle-building supplements. Industry has been fighting similar laws in New Jersey, California, Rhode Island, and Massachusetts, successfully preventing their passage. In California and New York, both state’s Governors vetoed similar bills that crossed their desks.

In the case of the California state law, Governor Gavin Newsome explained that “dietary supplements for weight loss are not considered drugs…this measure would require [the California Department of Public Health (CDPH)] to evaluate every individual weight loss and dietary supplement product for safety, which is beyond the scope of the department’s capabilities.” This would result in a lengthy and costly process given the amount of supplements on the market.

In Hochul’s case, she also cited concerns about the Department of Health (DOH) being left to determine what products should be restricted by the law. “DOH does not have the expertise necessary to analyze ingredients used in countless products, a role that is traditionally played by FDA…It would be unfair to expect retailers to determine which products they can and cannot sell over the counter to minors, particularly while facing the threat of civil penalties,” explained Hochul.

Unfortunately, renewed efforts by advocates of the bill did find success in New York state. The revised text seemed to have provided Hochul with a more satisfactory definition of what constitutes a product for “weight loss or muscle building,” and offered the courts multiple factors to consider when making a determination. The new bill also named specific ingredients, such as “creatine, green tea extract, raspberry ketone, garcinia cambogia, green coffee bean extract,” while making an exception for protein products unless they include ingredients that if taken alone would constitute a product for “weight loss and muscle building.” The legislation also provides specific examples of the types of marketing these products may contain.

The passage of the New York legislation set the stage for similar legislation across the country. In response to the bill’s passage, on December 4th, 2023, the Natural Products Association (NPA; Washington, D.C.) filed a lawsuit against the state in the Eastern District seeking a permanent injunction. More recently, on March 13, 2024, the Council for Responsible Nutrition (CRN; Washington, D.C.) filed its own lawsuit in the Southern District seeking injunctive relief as well.

With the law being scheduled to take effect on April 22, both plaintiffs pursued a motion for a preliminary injunction, which would pause the law’s enforcement until the end of the lawsuit. This type of motion has a high standard and can be difficult to achieve, but the goal was to prevent enforcement of the law until the judge decided the outcome of the lawsuit. CRN was able to file this motion on April 4th, while NPA’s motion was stayed pending the decision on CRN’s motion. On April 20, CRN’s motion was denied by the judge. While the judge determined that CRN’s motion failed to demonstrate that the law created irreparable harm to its members, and was unconvinced by the association’s arguments, including that the law violated the first amendment, or that it preempted federal law, the judge did rule that CRN had standing to sue on behalf of members. According to CRN’s president and CEO, Steve Mister, this alone was an important hurdle for the trade group to clear.

“Each time you’re bringing a lawsuit, you’re required to have standing, meaning that you can show that you have some kind of injury from whatever action it is that you’re challenging. That’s particularly hard in a case where an association is basically stepping into the shoes of its members, and we have to show that the members actually have standing,” explains Mister. “The significance of it in this case is that as we were filing this litigation, the ground underneath our feet was moving because the Second Circuit where the New York district sits came down with a new decision just as we were filing our lawsuit, in a case called Do No Harm vs. Pfizer, and it changed the requirements for standing and increased what an association has to be able to show on behalf of its members. So, there was a big question as to whether or not we would be able to survive the Attorney General’s challenge against us that we didn’t have standing to sue on behalf of our members…We had nine of our member companies who filed signed declarations attesting to the kinds of injuries that they were going to suffer as a result of these age restrictions, and the judge was persuaded by all of that.”

Now that the judge on CRN’s case has made a decision on that preliminary injunction, NPA can now proceed with their own, however, there are some caveats.

“[The judge] is going to now, unfortunately, limit us to seeking any preliminary relief to the Dormant Commerce Clause,which is a claim in our case that was not presented in the CRN case,” explains Kevin Bell, of Arnall Golden Gregory LLP, NPA’s counsel in its lawsuit. “She’s essentially going to adopt a lot of what the judge in CRN’s case ruled.”

This is unfortunate, says Bell, because despite having some overlap in their claims, there would have been differences in how the claims are argued. That said, the idea behind that Dormant Commerce Clause is that the law is “unfairly benefiting New York citizens to the detriments of non-New York citizens,” says Bell. He provides the example of shipping. With the new law, it will be easier for New York citizens to go to a brick-and-mortar retailer given the mandates on age verification. This is to the detriment of online retailers or direct-to-consumer brands, says Bell, because they will have to find a vendor delivering packages in New York state that will do age-verification at the door. According to Bell, many of the largest vendors such as FedEx and UPS don’t have policies for age-verification of 18 and up, only 21 and up as it relates to alcohol and tobacco. Not only that, but consumers that can legally buy these products because they’re over 18 are inconvenienced by having to sign for the package.

While the judge in CRN’s lawsuit has ruled the trade group has standing, no decision has been made on the Attorney General’s motion to dismiss. For NPA, Bell says that the opposing counsel on their case has indicated that they too will file a motion to dismiss. “That will get briefed after the preliminary injunction motion and I believe all briefing on that is supposed to be completed by July 1st,” states Bell.

Vagueness

The judge on CRN’s case was not convinced by the group’s argument that the law was too vague, but CRN continues to advance this claim, and has filed a motion for clarification. “We would respectfully disagree [with the judge] and we think even from his order, it is not clear what he intends to have products covered versus those products that are not covered,” says Mister. “So much of this statute revolves around how the products are being labeled, marketed or otherwise represented to be weight loss or bodybuilding. Those categories are not clear. What does it mean to be represented to be a muscle building product, or otherwise, otherwise represented in that way?”

NPA’s complaint also makes the case for vagueness. “We’re not talking about whether the law is difficult to comply with, are easy to comply with. We’re talking about it being so vague that it’s almost impossible to understand the metes and bounds of what is not supposed to be given to minors and based on I think everyone’s reading, it’s so vague that it could extend so broadly as to capture things that most likely were never intended.”

Speaking from the National Association of Chain Drug Stores Meeting, Mister says that this is the case for many retailers. “[Large chain drug retailers] are as confused as we are as to about which products are appropriately restricted and which ones aren’t, and that means that as a result, they’re being conservative and they are most likely putting products into this category that shouldn’t be there. And that means they’re chilling claims for those products out of an abundance of caution. And that’s exactly what we were afraid would happen…because the categories are so amorphous, retailers are restricting a lot of products they shouldn’t be.”

Timing

If you’re wondering how it was that CRN’s motion for a preliminary injunction was heard before NPA’s motion despite filing months ahead of CRN, the answer is “procedure,” namely the procedure of the judge assigned to NPA’s case.

“The judge that we got in the Eastern District of New York has individual rules aside from the local in which she requires additional letter briefing before any motion is filed,” says Bell, describing it as a practice that is starting to be used more across the country.“The judge in the Southern districts where CRN filed its complaint about four months later, they got a judge whose individual practice did not require that for this motion. So, they didn’t have to go through this round of letter briefing where we file a letter brief, [the] New York Attorney General’s office files one seven days later, the judge eventually sets a hearing, and then you talk about it.”

Additionally, NPA was also dealing with the law mentioned previously by CRN coming out of the Second Circuit court that NPA had to consider and therefore amend its complaint.

While both trade groups were trying to get their motions for a preliminary injunction filed before the law’s passage, the judge in CRN’s case interpreted when CRN filed its motion as contradictory to its claim that this was an emergency motion to prevent irreparable harm to its members. While NPA was dealing with procedural gridlock, it does beg the question of why CRN filed its complaint when it did. According to Mister, CRN was simply exhausting all other avenues.

“We tried to do some other things first before we brought a lawsuit. I mean, you never want to sue your regulators if you can avoid it, right?” says Mister. “We had follow up conversations with the legislators who were the sponsors of the bill to see if there were some things that they could do to perhaps revisit this with new legislation that would be more narrowly focused on what they were trying to address. We had conversations with the governor’s office and with the Attorney General’s office to see if we could delay enforcement if we could get a guidance from the state that would interpret what it meant to be a weight loss [product].”

When all these other strategies failed, the Board of Directors was consulted and they decided a lawsuit was necessary. “That [was] our last opportunity. So, even though the judge was somewhat critical of the fact that we waited to file I think it was because he didn’t know about all of these things that had gone on before,” says Mister. “We feel very comfortable with the fact that you only sue the regulator as a last resort and we wanted to exhaust these other things first.”

Dueling lawsuits?

While CRN did treat the lawsuit asa last resort, did it make sense for them to file when another lawsuit was already filed? From Bell’s perspective, this is not best litigation strategy.

“When you have a situation like this where you have on a common goal, then filing separate lawsuits in separate jurisdictions…with now two sets of opposing counsels fighting instead of one, is not in my opinion optimal litigation strategy at all,” says Bell. “There’s overlap in some of our claims, but to be honest with you, these are cases that probably should have been filed together, or at least in the same courtso you could increase your legal attacks. Even if we were trying to get there in different ways, being able to present all those ways makes a big difference.”

There’s no sense on looking back at what could have been, but from Mister’s perspective, having these two lawsuits with the same goal is not a negative thing.

“I think this is a case of where by having two pieces of litigation, you’re getting two bites at the apple. You can think of it as...belts and suspenders. By having both of these lawsuits in play, you get two opportunities to try to strike down the law,” says Mister. “In our litigation, we have made some challenges to the law that are not in the other lawsuit. We focus on the 1st amendment. We focus on the infringement of commercial speech, which is not addressed in the other lawsuit. So, that allows us to raise different claims in the two venues. And in fact, I think the other litigation makes a claim that we chose not to argue, and so now they’re going to move ahead on that on that score. So, I don’t think it’s a problem to have them both going on at the same time.”

As of the writing of this article, both plaintiffs still have the opportunity have their case heard, but that can still be snatched away if the judges rule in favor of the New York Attorney General’s motions to dismiss. In CRN’s case, the judge’s decision on standing offers some optimism, but the rest of the opinion indicates that CRN has an uphill battle in convincing the judge of its arguments. NPA still has an opportunity at preliminary injunctive relief but being limited to arguing the Dormant Commerce Clause is certainly a disadvantage. In the meantime, with the law in effect, retailers are left to figure out the best way to comply with the law absent of substantive guidance from the state.

Update (5/3/24 10:24 AM EST): On April 30, 2024, the Judge in CRN's case denied its motion for clarification.