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  • Writer's pictureShelly Albaum

First Chaos in New York, Now Madness

Updated: Feb 12, 2020

Elysium has proposed in New York to file a Third Amended Counterclaims that is not just audacious or daring, it's right over the edge -- I would call it "contemptuous."

You have to understand that you can always find a lawyer who will say anything. When the GWBush administration wanted to turn morality on its head by unilaterally declaring torture legal and the Geneva Conventions "quaint," attorney John Yoo was ready and willing to pen the torture memos.

Then a few months ago, Donald Trump's personal attorney, William Consovoy, told a federal appellate judge, Denny Chin of the United States Court of Appeals for the Second Circuit, that if President Trump pulled out a handgun and shot someone on 5th Avenue, local authorities could not investigate, could not do anything about it. "Nothing could be done? That's your position?" asked the court. "That is correct," replied Consovoy.

And just last week in Iowa, after the New York Times reported that the Iowa Caucus delegate tally was clearly based on bad math:

"In the Times review of the data, at least 10 percent of precincts appeared to have improperly allocated their delegates, based on reported vote totals. In some cases, precincts awarded more delegates than they had to give; in others, they awarded fewer. More than two dozen precincts appeared to give delegates to candidates who did not qualify as viable under the caucus rules.

The Iowa Democratic Party found a lawyer, Shayla McCormally, to offer this astonishing advice: “The incorrect math on the Caucus Math Worksheets must not be changed to ensure the integrity of the process.” McCormally's argument was that the incorrect tally was a public record, and public records cannot be changed.

This is just nonsense. Anybody closely following 2017's Oil States PTAB drama, in which the SCOTUS considered finding the Inter Partes Review Process unconstitutional because it wrongly deprived people of a property right, will recall the counterargument that Justice Ginsburg made from the bench, "There must be some means by which the Patent Office can correct the errors that it's made."

The Supreme Court, but not counselor Shayla McCormally, thinks that it is a fundamental principle of law that governments sometimes make mistakes, and there has to be a way for them to correct those.

Of course, the Iowa scenario happens all the time in the real world, where one legal rule says you can't do something and another legal rule says you must do the same thing. There is an entire course in law school devoted to this general problem of competing rules. It is called "Conflict of Laws." Whatever is the right answer in Iowa, the WRONG answer is for some lawyer to just declare that one rule trumps the other (as well as trumping common sense).

Why the legal madness of Bush II, Trump, and the Iowa Caucuses is now visited upon our poor beleaguered ChromaDex-Elysium litigation I do not know, but here we are.

I have to say, I'm not a big fan of ChromaDex's "unsubstantiated claims" attacks on Elysium's marketing. The FDA has made a bright-line (or maybe it's a dim-fuzzy-line) rule that you can't say that a health supplement is intended to "diagnose, treat, cure, or prevent any disease." In fact, you have to affirmatively say the opposite.

So supplement manufacturers end up doing this marketing dance where they say weird things, like that the product "supports health," which seems to say something but doesn't. Both ChromaDex and Elysium are trying to navigate this marketing line, asserting that their respective products may well be very good for you, but not exactly able to say why that might be true.

I get it that a fair playing field requires that both sides play by the same rules, but over-policing innuendo near the border not only creates a glass-house problem for both sides, but also attempts to stoke outrage around behavior that is actually pretty close to what the law, in all its weirdness, contemplates.

Both sides do a lot to abide by their DSHEA labeling obligations, so I'd rather not see our clumsy civil litigation system getting tangled up in "Gotcha" allegations around the occasional arguable misstep.

But that kind of over-arguing is totally different from what Elysium put in their proposed amended counterclaims.

Elysium's innovation in this complaint is an allegation that in one study NR supplementation caused a decrease in white blood cell counts. Therefore, says Elysium, NR is not safe and trusted, and does have negative side effects, and ChromaDex has spoken falsely in its advertisements.

Probably the most fundamental reason this is an outrageous legal argument will turn out to be that it is factually untrue. For example, we may find that a different study showed that NR actually strengthened the ability to create blood cells, including white blood cells. Or we might find that decreasing white blood cells is a GOOD thing, representing "a calmer immune system," as Mike on the Yahoo Board says. Healthy white blood cell count actually falls within a pretty broad range, so the observed fluctuations might fall within that range and be indicative of nothing.

[Update Feb 12: As Marshmallow on the Yahoo Finance board points out, "Neutrophils are put out by the body to handle inflammation. So a lower neutrophil level might be PROOF of less inflammation with TruNiagen."]

But even if it were true that NR reduced white blood cell counts and that this were a bad thing, doesn't that necessarily mean that Elysium's Basis has the exact same negative effect, and that Elysium's own advertising is equally false?

Elysium's pleading is the ultimate example of shooting oneself in the foot.

When ChromaDex accuses Elysium of shipping product with acetamide residue (or worse, knowingly and intentionally doing so), ChromaDex is pointing to a difference between the two competing products -- Elysium has a different manufacturer, and a different manufacturing process, which results in a different residue.

The same is true again when ChromaDex accuses Elysium of tolerating an LDL-raising product component, pterostilbene, because Niagen does not include pterostilbene, and in fact ChromaDex doesn't even sell it anymore.

But for Elysium to point to a study of NR, and tell the Court that the study proves NR is unsafe and untrustworthy, when NR is the primary ingredient in Basis, is just mind-boggling.

There are slight differences between cigarette brands, because they have different additives and different nicotine levels, etc. But when studies showed the smoking caused cancer, not one cigarette company told the public that the research was done on Marlboroughs, which shows that Marlboroughs cause cancer, but tells us nothing about Camel, Kent, or Kool. That would have been ridiculous.

And yet, here is Elysium telling the Court and the world that NR in Niagen is harmful, but NR in Basis is healthy.

No, they really said, specifically, exactly, that:

"ChromaDex is aware that if it were publicly known that Tru Niagen endangers consumers in this manner, not a single consumer would opt for Tru Niagen over other, safer NAD precursor products on the market, including Elysium’s own Basis." (emphasis added)

The only hope for Elysium here is that -- assuming again that the white blood cell conclusion had some scientific validity -- that there was something in Basis that would prevent the effect that they say is inherent in NR. Perhaps, for example, the presence of pterostilbene supports the growth of white blood cells -- or the presence of acetamide has that effect? There's nothing in the complaint that would explain why Elysium believes that NR behaves differently in this respect when it is sold as Basis instead of as Niagen. I have seen no study that says Basis is different in this respect, or that pterostilbene's presence could somehow negate this effect, nor any scientific explanation of how it even could possibly be true.

What on earth makes Elysium believe, and why would any consumer believe, that Basis is "safer" than Niagen, if a study of NR showed this effect?

We will eventually hear from ChromaDex on this issue -- at summary judgment, if not before -- and then we'll have a better idea of whether the report in this study is statistically aberrant -- one of the 5% of random fluctuations that falls outside one standard deviation. Or whether the finding isn't actually a bad thing. Or whether the finding is invalid, or insignificant, or misleading for some other reason.

But declaring the primary ingredient in your own product dangerous when it appears in your competitor's product -- which is what Elysium has done -- isn't just bad science; it's bad lawyering.

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