United States: SDNY TKOs MMA Fighter's Fraud Claims vs. Dietary Supplements

For at least forty years we've been hearing that soccer is going to supplant baseball, basketball, or football among America's top three sports. It hasn't happened. Maybe we heirs of Washington, Jefferson, Ruth, Rice, and Chamberlain have limited enthusiasm for one-nil scores and players diving and mimicking death throes in a cheap effort to extract a penalty kick.

Meanwhile, we have seen boxing subside in the country's consciousness, bullied out of the way by mixed martial arts (MMA). It's hard to believe one of those M's does not stand for mayhem. Forget about the Marquis of Queensbury's niceties. In MMA, the contestants are free to kick, choke, and elbow each other. Hit a man when he's down? That's not forbidden in MMA. Nope, that's when the action is just getting started. Pretty much anything goes in MMA.
But you cannot use anabolic steroids. If you test positive, you get suspended. Rules are rules.

The plaintiff in In re Lyman Good Dietary Supplements Litigation, 2018 U.S. Dist. LEXIS 131668 (SDNY Aug. 6, 2018), was an MMA fighter who was suspended because he tested positive for a banned substance. The court employs the short-hand reference "andro" for the banned substance, and so shall we. The plaintiff claimed that he had unknowingly ingested andro that was present in two dietary supplements that had been labeled to be free of any banned substances. The plaintiff alleged that the manufacturers and sellers of the dietary supplements promised that the products were "safe," "without the use of banned substances," "banned substance free," and in compliance with "strict quality assurance procedures." The presence of andro broke such promises, and the plaintiff's career had suffered a serious bruise. The plaintiff sued the manufacturers, high ranking executives at the manufacturers, and the retailer. The causes of action were interesting, including some you'd expect (breach of warranties, fraud, deceptive practices, false advertising, negligence, and strict liability) and some you wouldn't (intentional infliction of emotional distress, assault and battery). The defendants moved to dismiss and ended up winning more than they lost.

The court dismissed the claims for fraud, assault and battery, and intentional infliction of emotional distress. Fraud claims are subject to heightened pleading requirements, which the complaint didn't come within a puncher's chance of satisfying. All we get are general allegations of fraudulent intent, along with generalized motive to earn profits. That isn't nearly enough. The court applied a rear naked choke to the fraud claim and counted it out. The assault and battery claim was a wild swing and miss. The plaintiff's theory was that putting a substance in someone's body without consent is battery, but there was no case support for that, plus the plaintiff never alleged the requisite intention to inflict injury. Here comes a reverse guillotine, and watch the court slice off the assault and battery claims. Lack of intent is also what doomed the claim for intentional (or reckless) infliction of emotional distress. The court also could identify no alleged outrageous conduct that went "beyond all possible bounds of decency." (To be sure, when one is dealing with MMA, it might seem difficult to meet that standard.)

The court dismissed the claims against the executives, both on the merits and for want of personal jurisdiction. Suing executives is fairly rare, and there are reasons for that. Piercing the corporate veil requires a showing that the executives exercised compete domination and disregarded corporate formalities, including use of corporate funds for personal purposes. At most, the complaint alleged that the individual defendants were high-level officers with wide-ranging authority, but an officer or director is not personally liable for the torts of a corporation merely by reason of occupying an important office. The complaint utterly failed to allege that the executives used corporate domination to perpetrate a fraud. In any event, there was no personal jurisdiction over the individuals. They all had general authority over their corporations, but were not the primary drivers of the particular transactions in New York that gave rise to the litigation. Hello sleeper hold, and good-bye claims against the individual defendants.

The retailer prevailed on most of its motions to dismiss. The claims for implied warranty of fitness for particular purpose, express warranty, and false advertising were carried out of the ring, but the claim of implied warranty of merchantability emerged unscathed. The only express warranty by the retailer listed in the complaint was a statement in its 10-K annual report that the company used quality control procedures and that it refused to sell products that did not comply with law or were unsafe. Those representations are pretty general, and the plaintiff did not even claim to have read them or relied upon them prior to purchase. Nor did the annual report constitute a form of advertisement. The court granted the plaintiff leave to amend the claim for implied warranty of fitness for particular purpose because, even though the complaint was bereft of any assertions that the plaintiff and the store had any conversations about how the plaintiff would use the supplements to prepare for MMA combat, the plaintiff wanted to add six paragraphs alleging precisely such conversations. If such conversations did take place, it would not be "outside the realm of reasonable knowledge" that professional competitions require drug testing. Thus, the particular purpose warranty claim might live to fight again.

The opinion in Lyman Good is solid and clear. It goes through the different causes of action and defendants one-by one, jab by jab. It reminds us that MMA is not the only place where rules are rules.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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