More Litigation! Elysium Answers Complaint, Attacks Blogger, and Adds Claims
Elysium Health has answered ChromaDex's complaint in New York and added a plethora of new claims that, unlike the prior New York claims, aren't susceptible to Noerr-Pennington pre-emption, because they are not based on ChromaDex's FDA petition.
Elysium also used quite a few paragraphs in the complaint to attack me and Right of Assembly.
You can read Elysium's Answer and Counterclaims here:
Let's start with Elysium's new claims for False Advertising, Unfair Competition, and Deceptive Practices, then we'll review my cameo in the complaint:
Here is what Elysium does not like:
(1) ChromaDex gives the false impression that it discovered NR
(2) ChromaDex gives the false impression that it is the only seller of NR
(3) ChromaDex falsely claims that its products have been reviewed and tested by the FDA
(4) There is a NEW Prop 65 chemical to worry about in Niagen -- acetimide
(5) The Niagen recommended dose is TOO HIGH because the FDA submissions referred to 180mg per day, not 250 mg/day
(6) The Niagen recommended dose is TOO LOW because the efficacy tests that ChromaDex relies on include dosages of 1,000mg/day not 250mg/day
(7) ChromaDex's 60% increase in NAD claim is deceptive because the participants in the study that shows 60% gain did not use 250mg/day
(8) ChromaDex improperly suggests that Basis is "counterfeit," when in fact the Mystery NR does not purport to be Niagen
(9) ChromaDex falsely claims that Niagen is the only NR to be safety-tested, when Basis has safety testing also
(10) ChromaDex places ads on Right of Assembly, which and impliedly endorses the blog's claims
(11) The Right of Assembly blog falsely claims hat ChromaDex's NR product can prevent or treat a whole litany of diseases
I won't hazard a guess as to which if any of these allegations is true, and if true actionable.
For example, I don't honestly know what is the right way to refer to a product that is willfully infringing a patent that it formerly licensed, like an iPhone not made by Apple. Is it counterfeit? Is it pirated? Is it unlicensed (that's what I use in my blog)? Is it black market?
Also for example, there is a fine distinction between whether Dr. Brenner discovered NR, or Dr. Brenner discovered the NR Kinase pathways, or Dr. Brenner discovered that NR has the properties that are the only reason it is an ingredient in Niagen and in Basis. My sense has been that ChromaDex generally characterizes Dr. Brenner has the discoverer of NR's properties, not NR itself, although in the sound-bite world if brief ads and article headlines, I can imagine the short-form occasionally gets used. Is the short-form substantially accurate (when compared to, say, a suggestion by Elysium that it might have discovered the properties that make NR special), or is it materially false?
I guess we'll need some more lawyers!
I do have some opinions about what Elysium has said about me and my blog, however. Here is what Elysium has to say about me:
20. ChromaDex perpetuates this deceptive advertising campaign by placing targeted advertisements – through which customers are a simple click away from ChromaDex’s website on which its product can be purchased – on an affiliate website maintained by one of its shareholders with the grandiose title “Right of Assembly,” but which almost exclusively touts ChromaDex’s product and chronicles various disputes between ChromaDex and Elysium. That blogger is an affiliate of ChromaDex who is compensated for every sale made by ChromaDex to a consumer who navigates to ChromaDex’s Tru Niagen website from the blog and makes a purchase, and ChromaDex is as responsible for the contents of the blogger’s statements as if it made them directly. Moreover, by taking the affirmative intentional step of placing its advertising on the blog, ChromaDex impliedly endorses the claims made by the blogger.
21. Appended to nearly every post on that blog is a statement that FDA will not permit ChromaDex to make claims that its NR product treats any disease, but that the affiliate does not believe those same restrictions apply to him, after which he claims that ChromaDex’s NR product can prevent or treat a whole litany of diseases. ChromaDex exploits the affiliate’s recklessness by endorsing those disease claims by placing targeted advertising on the blog. This conduct is not just unlawful, it is reprehensible.
80. ChromaDex uses its deceptive marketing practices to prey on those with life- altering and life-threatening diseases by using an affiliate’s website to peddle the purported preventative and curative effects of its product to the public. ChromaDex misleadingly creates the impression with consumers that its Niagen-containing Tru Niagen prevents and cures diseases.
81. ChromaDex is well aware that it is not allowed to say directly that NR treats any disease because it lacks the kind of extensive clinical data FDA regulations require to support statements like that. Indeed, the Tru Niagen website has a disclaimer in tiny text at the bottom of practically every page that states “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” Thus, ChromaDex is knowingly deceiving customers and misleading the public through statements made on its affiliate’s blog.
82. Seeking to accomplish indirectly what it is not brazen enough to do directly, ChromaDex misleads the public and consumers by placing its advertisements and direct links to purchase Tru Niagen on blog posts created and maintained by one of its shareholders, who purports to be a non-practicing lawyer, on a website he maintains, right-of-assembly.org. This blogger discloses on his blog that he is “a ChromaDex associate, and may earn a small commission on purchases from ChromaDex if you were referred directly from this site and completed a purchase.” This makes him a ChromaDex affiliate, and makes ChromaDex as responsible for the content of his statements about NR, Niagen, and Tru Niagen as if it had made the statements directly.
83. ChromaDex is well aware of this blogger and the contents of his website. He has written about discussions he has had with ChromaDex management, including during a visit to ChromaDex headquarters.
84. Through an investment advisor barred by FINRA for acts including improper promotion of ChromaDex stock, ChromaDex has caused a number of the blog posts to be widely distributed to individuals who had signed up to receive investor alerts from ChromaDex, including at least one New York resident.
85. At least one of those blog posts had been forwarded to the investment advisor by ChromaDex’s then-CEO.
86. Because it was aware that this blogger, who as a shareholder has an obvious and direct financial interest in helping ChromaDex, wrote posts that contained fawning coverage of ChromaDex, were harshly critical of Elysium, and giddily praised Tru Niagen, ChromaDex decided that the blog was an ideal vehicle through which it could target credulous consumers. Thus, it elected to place advertising for Tru Niagen on virtually every blog posted. By doing so, it implicitly vouched for their content.
87. The ChromaDex affiliate makes repeated claims about the efficacy of Tru Niagen in preventing and/or curing diseases on upwards of 20 blog posts – posts that are flooded with advertisements for Tru Niagen, and with direct links to purchase the product. In these posts, the affiliate states:
ChromaDex isn’t allowed to say that NR treats any disease, because the FDA has not approved that. But the FDA does not regulate me, so I am free to tell you that the scientific evidence is growing that NR supplements replenish cellular NAD, which can protect against MANY ailments, including Alzheimers, Heart Disease, Parkinson's Disease, Breast Cancer, alcohol induced liver poisoning, chemotherapy induced peripheral neuropathy, organ injury from sepsis and in my own experience, Restless Legs Syndrome (RLS). You can find out more here: AboutNAD.com.
88. AboutNAD.com is a website maintained by ChromaDex.
89. ChromaDex is responsible for these statements by its affiliate. Moreover, it impliedly endorses them by placing advertising on the blog. ChromaDex is preying on consumers suffering from or living in fear of the listed diseases and conditions, giving them false hope that Tru Niagen will cure or prevent their suffering. These representations are false, misleading to consumers, and meant to influence consumers to purchase NR from ChromaDex, and drive sales away from its competitors, including Elysium.
90. And there can be no doubt that these advertisements touting NR as a cure or preventative for disease are hitting their mark. Indeed, customers of Tru Niagen have posted product reviews on Amazon’s Tru Niagen page, stating that they made their purchases for reasons that strongly echo the blog’s disease claims. For example:
A customer review dated September 18, 2018, stated, “While there is research linking NR supplementation and cardiovascular health, the only cognitive benefits I could see are related to Alzheimer’s and Parkinson[’]s.”
A customer review dated September 10, 2018, stated “I bought it to help stave off Alzheimer’s.”
A customer review dated February 18, 2018, stated, “the research also says that replenishing NAD appears to protect against Alzheimer[’]s, breast cancer, heart disease, and more.”
91. In addition to the economic harm caused to Elysium by ChromaDex’s false disease claims in the form of lost sales, ChromaDex’s false advertising also damages Elysium’s reputation and the goodwill it has built up over years of effort and substantial investment. The affiliate’s claims regarding treatment of disease refer to “NR supplements,” not solely to ChromaDex’s Niagen or Tru Niagen. Accordingly, customers suffering from or fearing any of the diseases the affiliate claims NR can prevent or treat, could be misled by this affiliate into purchasing Elysium’s Basis, which is, after all, a supplement containing NR, in the expectation that it will cure or protect them. Elysium, the seller of the NR supplement they take, will then be the likely subject of their ire should they conclude they have been misled, notwithstanding the fact that it will have been ChromaDex, through its affiliate, not Elysium, that gave them that false hope.
That is quite a bit of attention for Right of Assembly, and the first question you'd want to ask is what I am doing merits so much attention? We'll answer that last.
But let's start with some demonstrably false allegations:
Elysium complains that my blog, "Right of Assembly," has a "grandiose title." That's pretty rich coming from a company named "Elysium Health." Here's what "Elysium" means, according to Wikipedia:
Elysium or the Elysian Fields...is a conception of the afterlife that...was reserved for mortals related to the gods and other heroes. Later, it expanded to include those chosen by the gods, the righteous, and the heroic, where they would remain after death, to live a blessed and happy life, and indulging in whatever employment they had enjoyed in life.
When it comes to "grandiose," my reference to the First Amendment is pretty pale by comparison.
Elysium falsely alleges that ChromaDex places targeted advertisements on my website -- or, in Elysium's exact words, "it elected to place advertising for Tru Niagen on virtually every blog posted."
That's just not true. My website does accept some Google ads. But this is a fully automated system, and I don't know what ads are running (they aren't targeted at me), and for the most part the advertisers don't know where their ads are running. I have no reason to believe that ChromaDex is directing that ads be placed on my site.
What Elysium is probably instead referring to is the sponsored links from Commission Junction, but I place those myself; ChromaDex has no role in it.
Elysium also falsely accuses me of claiming that Niagen cures diseases. Here is Elysium's actual language: "...he claims that ChromaDex’s NR product can prevent or treat a whole litany of diseases." That is also not true.
What I have said elsewhere and will repeat now is that although I am obviously not bound by the FDA's labeling requirements, I did not follow that disclaimer with an improper statement about Niagen. And Elysium obviously knows that, because they quoted my disclaimer, and then MISquoted me later in their counterclaims.
My disclaimer said, "Scientific evidence is growing that NR Supplements replenish NAD" -- [that's not a statement about any product, it is simply a reiteration of ad copy that both Elysium and ChromaDex use], and the scientific evidence is growing that "replenish[ing] cellular NAD can protect against many ailments" which is also a true statement about the science. It is SUCH a true statement, that I then linked to studies supporting each one.
That's a far cry from saying that Niagen cures Alzheimers or Basis cures Parkinson's Disease, even though I have an entire page devoted to exploring the science that indicates NAD replenishment may prove efficacious for treating Parkinson's disease. And THAT page links to ScienceOfParkinsons.com, which is exploring the same question. There is simply nothing wrong with drawing attention to these scientific studies.
Which is why, I suppose, Elysium felt the need to misquote me and distort my language by saying "he claims that ChromaDex's NR product can prevent or treat a whole litany of diseases." That's not what I said.
But what's REALLY interesting is that my goal in all this blogging has been to try to say accurate things, so on or around October 4th, some anonymous participant on the Yahoo Finance Message Board using a one-time alias of "Greg" suggested that the paragraph in question improperly suggested that NR "helps with all these diseases,"
I went back in to my blog right away and changed all the disclaimers to have more precise language. For the past ten days that paragraph within all my disclaimers has read:
There is no scientific study that says that NAD replenishment by any method treats, cures, or prevents any disease, nor does ChromaDex claim it. The human studies so far only indicate safety and efficacy in replenishing NAD. However, I am watching the science carefully because research in rodents and animal models is suggesting that replenishment of cellular NAD may end up being useful for treating Alzheimers, Heart Disease, Parkinson's Disease, Breast Cancer, alcohol-induced liver poisoning, chemotherapy-induced peripheral neuropathy, organ injury from sepsis -- and in my own personal experience, Restless Legs Syndrome (RLS). You can find out more at AboutNAD.com, where they are tracking many of the studies.
So Elysium's complaint is REALLY a counterfactual, not-well-founded paper, because it complains about language that had been removed from my website for about a week before their counterclaims were filed, but they don't acknowledge that or inform the court.
I also take exception to Elysium's claim that Right of Assembly is "almost exclusively" devoted to the ChromaDex/Elysium litigation. There's actually quite a bit of other content on there; it's just not the part that Elysium and its lawyers enjoy reading.
AND I take exception to Elysium referring to me as "purporting" to be a non-practicing lawyer. It takes no effort whatsoever to look me up in the California Bar, and see that I am active and in good standing. Elysium's reference is unprofessional, disrespectful, and unnecessary.
Elysium is also in error when they say, "And there can be no doubt that these advertisements touting NR as a cure or preventative for disease are hitting their mark," and then quotes 3 amazon reviews in which customers mention Alzheimers -- one of the three reviews was MINE, so I guess that explains why it sounds like me, but it certainly doesn't show that anything I am saying is "hitting the mark," especially when there are 500+ other amazon reviews not surveyed.
But that's not the real reason why Elysium is wrong when they say "there can be no doubt that these advertisements touting NR as a cure" are hitting their mark.
The bigger reasons why Elysium is wrong about this is first because there are no "advertisements" touting a cure. The language they don't like is not in ad advertisement, but buried fairly deep in a disclaimer, and it is followed by links to studies that reveal the relevant science. So there is GREAT doubt not only that many people read deep into my disclaimers, but that they weren't more influenced by the scientific studies I linked to.
The obvious reality is that anyone in the world can type "alzheimers NR" into Google and get a flood of information suggesting that NR could be used to treat alzheimers. Here, I'll do it:
The top hit is the National Institutes of Health. And my blog doesn't even make the front page, or even the first five pages. So the idea that I am responsible for the world's interest in NR and Alzheimers is comically, laughably, ludicrous, and certainly not a responsibly supported assertion.
So why, after mischaracterizing, misquoting, and disparaging my blog does Elysium go on to make the following allegation, which is both factually and legally indefensible?
ChromaDex decided that the blog was an ideal vehicle through which it could target credulous consumers. Thus, it elected to place advertising for Tru Niagen on virtually every blog posted...by taking the affirmative intentional step of placing its advertising on the blog, ChromaDex impliedly endorses the claims made by the blogger.....This makes him a ChromaDex affiliate, and makes ChromaDex as responsible for the content of his statements about NR, Niagen, and Tru Niagen as if it had made the statements directly. [emphasis added]
Factually, this is just false. As I have indicated before, ChromaDex has not placed any ads on my blog.
Legally, I am baffled as to what the legal theory would be that would make Chromadex "as responsible for the content of his statements...as if it had made the statements directly."
I am not an employee of ChromaDex, I am not an agent of ChromaDex. ChromaDex doesn't tell me what to say, and did not direct me to put any ads on my website. I can't wait to hear what is the legal theory that makes ChromaDex responsible for everything I say on my website, or even everything I say about NR.
But what Elysium is saying here is not just wrong, it is also disingenuous. Why?
Elysium ALSO has an affiliate program, and it is run by the SAME EXACT COMPANY that administers ChromaDex's affiliate program -- Commission Junction. Here are Elysium's program terms (I am not an Elysium affiliate):
You will notice that an affiliate advertiser can give publishers some guidelines, like (below), "Don't highlight that we have 7 Nobel Laureates on our team (don't want it to seem like they are a marketing ploy..."
But nowhere does Elysium accept responsibility for every word spoken by an affiliate as if it were their own.
If Elysium doesn't like what an affiliate says, their remedy is to terminate the affiliate's participation in the program, and if they fail to do so I STILL don't see how that makes them responsible for the publisher's words as if they had spoken them themselves.
And so Elysium's mischaracterization of ChromaDex's rights and obligations within the affiliate program simply can't be out of ignorance, because Elysium is participating in the exact same program. And if not ignorance, then why?
Why has Elysium spent a HUGE amount of time in their complaint on my blog?
And why have they used the judicial process to assert facts that lack evidentiary support (like, that ChromaDex places ads on my site) and assert legal conclusions that are not warranted by any known or advisable law (like, that ChromaDex is responsible for all the statements of its affiliates as if it had made those statements itself)?
I sense an improper purpose, and the evidence of that improper purpose can be found plain within Elysium's counterclaims. Elysium says,
(1) I am a "purported" lawyer
(2) I "wrote posts that contained fawning coverage of ChromaDex, were harshly critical of Elysium"
(3) My blog "almost exclusively touts ChromaDex’s product"
And THAT is what they really care about.
If Elysium REALLY cared what my disclaimer said, then they could have dropped me a line, or they could have noticed and alerted the court that I clarified the language BEFORE they filed their complaint.
If Elysium REALLY cared whether ChromaDex advertises on my site, they could have looked at their OWN Commission Junction terms and conditions and seen how it works -- or, again, they could have asked me.
I think what Elysium would really like to do is to shut down criticism of their business model and their marketing methods by a citizen journalist, and they have spun up all these false pretexts, not-well-founded in facts and law, but relying on judicial process, in order to harass me, derogate me, impliedly threaten me, and ultimately dissuade me from publishing.
That is what I think is going on here.
UPDATE OCTOBER 16, 2018
I hope Elysium left some room in its federal complaint to also attack ScienceTrends.com, which today published some text that sounds an AWFUL lot like what I write in my blog (emphasis added), and there is a Tru Niagen ad right next to it:
Is Science Trends reprehensibly and unlawfully preying on people who suffer from hearing loss, obesity, cancer, and NAFL? Or are they just accurately describing the state of the emerging science with respect to NR and NAD?