Elysium's Reply Brief Defending Motion to Dismiss Big Complaint
So now Elysium has shat out another pile of sophistry in support of their attempt to have ChromaDex's SDNY complaint dismissed. You can read the reply here:
Of course it's not ALL sophistry, but it's worse than the last one, which means pretty bad. In addition to offering weak arguments, there is a scattershot nature to the argument that makes me wonder whether this wasn't delegated to newer associates with inadequate oversight, which makes me in turn wonder whether Elysium isn't finally running out of gas or hope.
Elysium's first argument is:
ChromaDex does not admit that, but what's important is the word "Many." Many is not good enough to defeat a Motion to Dismiss. If ChromaDex has alleged at least one advertisement, then that element is satisfied, and the claim proceeds. The fact that you only stabbed the victim three times and not eleven times is certainly relevant, but it's not going to get your case dismissed.
As an aside, there is something slightly perverse about hearing Elysium argue that some of its challenged communications don't constitute "advertising" because they were insufficiently disseminated. Only an Alzheimer's patient who stopped taking their Niagen would have forgotten that not long ago Elysium argued in this same court, in this same matter, that a private email sent by a third party was adequately disseminated to constitute advertising. But now when the shoe is on the other foot Elysium argues that the standard for public dissemination is much higher. Now Elysium tells us that its own statements to its customers that are subsequently disseminated on public discussion boards are not advertisements, even though it still insists that third-party statements about ChromaDex distributed in private emails are advertisements. According to Elysium's Reply Brief, "numerous" statements relied on by ChromaDex are either not commercial speech or not widely disseminated, but Elysium does not specifically indicate any other statements that fail the dissemination test. This kind of general arm-waving isn't going to defeat a motion to dismiss.
Elysium next contends that ChromaDex has not identified any false statements. We have been through this before. I previously pointed to these alleged false statements:
ChromaDex says that the statements were "false" advertising because (1) Elysium claims that Basis is FDA approved when it's not, (2) Elysium claims that Basis is the only supplement clinically proven to raise NAD+ levels when it's not, (3) Elysium claims that Mystery Basis is more pure than ChromaDex ingredients, when it's not, and (4) Elysium claims that Mystery Basis is the same as thing that was tested in the clinical study it published, when it's not.
Elysium specifically denies that it claims that Basis is FDA approved. Elysium says that if you you read the entire statement, not just the part that ChromaDex excerpted, you will see that Elysium does NOT claim FDA approval for its only product. Here is the entire statement that Elysium asks us to read (from footnote 4 of the Reply Brief):
"Our process for all products begins with a comprehensive evaluation of all available scientific literature and culminates in a product becoming available for purchase. In between, there are many important steps. The steps below [which include ' we conduct rigorous safety studies for new dietary ingredient (NDI) submission to the FDA' ] help us discover and commercialize new products".
I would have concluded the opposite, that if "all products" get FDA submissions, then the only product does, too. Elysium wants us to see that the second-to-last word in the sentence is "new," which means that the entire statement only applies to NEW products, not their only product.
That strikes me as plainly wrong, but it isn't outrageous. Elysium enters outrageous mode -- or what Elon Musk might call "Ludicrous Mode" when it argues that it did not falsely claim that Basis was the "only supplement clinically proven to raise NAD+ levels" and the "first cellular health product informed by genomics."
ChromaDex says those are false assertions because Niagen came before Basis. Elysium outrageously or ludicrously argues in this Reply Brief that Niagen is an ingredient, not a supplement, so Basis is the first supplement with these characteristics.
It's true that at the time of the statement ChromaDex was selling Niagen as an ingredient, but OTHERS were selling it as a supplement. In other words, Niagen was being sold as a supplement Before Basis was being sold as a supplement, and THAT means (1) Elysium's statement is literally false, and (2) I am correct when I accuse Elysium of sophistry.
Next Elysium retreats to its favorite and strongest position, which is that Mystery Basis, or Basis-with-Toluene, is not unsafe.
Empirically, I have a great deal of sympathy for this argument, because I personally don't mind traces of toluene -- in fact, I wish it smelled more like gasoline than it does -- and I am going to consume some Mystery NR later tonight (my supply has not yet run out).
Legally, however, I don't really understand why we are talking about safety in the context of this motion to dismiss a false advertising claim. Although I don't mind me some toluene, I guaranty you that others disagree and they refuse to consume Mystery NR because of it. This is not an FDA enforcement proceeding in which we debate whether toluene is safe in small quantities; this is a false advertising proceeding in which we debate whether Elysium has made purity and safety claims that are factually accurate. So the question isn't whether toluene is safe; it's whether Elysium has improperly failed to disclose it, or deceptively claimed regulatory assurances that it has not earned. Elysium can't win this argument by saying that IF we had gone to the FDA they would have approved it, so let's just say that we did go the the FDA.
Or, to be more technical, I am not finding where "lack of safety" is a required element in any cause of action that ChromaDex pleaded. Here is how ChromaDex expressed the same point in the Opposition Brief that Elysium is purporting to Reply to, but is maybe instead just ignoring:
CMDX does not allege in the Complaint that the toluene levels themselves are “unsafe” (which is properly before the FDA on CMDX’s citizen petition); rather, in this false advertising case it alleges that Elysium misleads consumers and has never disclosed the presence of toluene in Basis, which is undoubtedly a material fact in a purchasing decision. ¶ 71. The Court need not substantively decide the FDA issue of whether toluene is present in unsafe levels to determine whether Elysium’s failure to disclose it to consumers, while at the same time touting Basis’ safety, violates the Lanham Act.
You can read yourself Elysium's argument that ChromaDex forgot to plead that it was injured by Elysium's false statements about its competing product, and that there were alleged defects in the ChromaDex's tortious interference claim. I just want to highlight this one additional audacious argument from Elysium's brief:
ChromaDex has no response to the authority making clear that allegations that a party had fraudulent intent in participating in negotiations do not meet the high bar for "criminal or tortious" conduct.
That's pretty rich coming from a party that is actively asserting a fraud claim in the Central District of California based on statements made during negotiations.