Facts

The district attorney offices in Napa, Alameda, Marin, Monterey, Orange, Santa Clara, Santa Cruz, Shasta, Solano and Sonoma counties, in the name of the People of the State of California, sued Iovate Health Sciences, Inc., a Canadian corporation, and Iovate Health Sciences USA, Inc., its American affiliate. The lawsuit related to the advertising claims defendants made and disseminated while marketing numerous dietary supplement products. Laboratory tests revealed that one of defendants' dietary supplements (Cold MD) contained lead in concentrations exceeding that allowed by Proposition 65.

PLAINTIFF'S CONTENTIONS:
Plaintiff alleged that defendants engaged in false and misleading advertising in connection with their dietary supplement products because of defendants' failure to provide competent and reliable scientific evidence to support the advertising claims made for these products. Plaintiff alleged that because of these false and misleading claims, defendants' products were misbranded, in violation of the Sherman Law. Plaintiff also alleged that because of the lead levels in one of these products, defendants violated Proposition 65 for having failed to place proper warnings on them. Lastly, plaintiff alleged that defendants sold new unapproved drugs, in violation of the Sherman Law. All of these activities constituted unfair competition.

Result

Defendants paid $1,200,000 in civil penalties, $250,000 in investigative costs, and $50,000 in cy pres restitution, for a total settlement amount of $1.5 million.