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Joshua Debernardis v. IQ Formulations, LLC, 18-11778 (2019)

Court: Court of Appeals for the Eleventh Circuit Number: 18-11778 Visitors: 19
Filed: Nov. 14, 2019
Latest Update: Mar. 03, 2020
Summary: Case: 18-11778 Date Filed: 11/14/2019 Page: 1 of 27 [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 18-11778 _ D.C. Docket No. 1:17-cv-21562-DPG JOSHUA DEBERNARDIS, on behalf of themselves and all others similarly situated, CHRISTINA DAMORE, on behalf of themselves and all others similarly situated, Plaintiffs - Appellants, versus IQ FORMULATIONS, LLC, a Florida limited liability company, EUROPA SPORTS PRODUCTS, INC., Defendants - Appellees. _ Appeal from the Unite
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              Case: 18-11778    Date Filed: 11/14/2019       Page: 1 of 27


                                                                             [PUBLISH]



                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                 No. 18-11778
                           ________________________

                       D.C. Docket No. 1:17-cv-21562-DPG



JOSHUA DEBERNARDIS,
on behalf of themselves and all others similarly situated,
CHRISTINA DAMORE,
on behalf of themselves and all others similarly situated,

                                                   Plaintiffs - Appellants,


                                       versus


IQ FORMULATIONS, LLC,
a Florida limited liability company,
EUROPA SPORTS PRODUCTS, INC.,

                                                   Defendants - Appellees.

                           ________________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
                         ________________________

                               (November 14, 2019)
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Before WILSON, JILL PRYOR, and SUTTON,∗ Circuit Judges.

JILL PRYOR, Circuit Judge:

       Plaintiffs Joshua Debernardis and Christina Damore appeal the district

court’s dismissal of their claims against defendants IQ Formulations, LLC and

Europa Sports Products, Inc. The plaintiffs argue that the district court erred in

concluding they suffered no injury in fact and thus lacked standing. Their

allegations that they purchased from the defendants dietary supplements that the

Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq, banned

from sale are sufficient, they contend, to establish that they suffered an injury in

fact. After careful consideration and with the benefit of oral argument, we

conclude that the plaintiffs plausibly alleged that they suffered an economic loss

when they purchased supplements that were worthless because the FDCA

prohibited sale of the supplements. Because the plaintiffs have standing to pursue

their claims, we vacate and remand.

       I.     FEDERAL REGULATION OF DIETARY SUPPLEMENTS

       The plaintiffs’ theory of standing rests on the premise that federal law

prohibited the defendants from selling the supplements the plaintiffs purchased.




       ∗ Honorable Jeffrey S. Sutton, United States Circuit Judge for the Sixth Circuit, sitting by
designation.
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To explain why the supplements could not lawfully be sold, we begin with a brief

overview of the law regulating the sale of dietary supplements.

       The FDCA authorizes the Food and Drug Administration (“FDA”) to

regulate a variety of products—including food, drugs, and cosmetics—to “protect

the public health.” 21 U.S.C. § 393(b)(2); see POM Wonderful LLC v. Coca-Cola

Co., 
573 U.S. 102
, 108 (2014) (“The FDCA statutory regime is designed primarily

to protect the health and safety of the public at large.”); Medtronic, Inc. v. Lohr,

518 U.S. 470
, 475 (1996). In 1994, Congress amended the FDCA, through the

Dietary Supplement Health and Education Act (“DSHEA”), to set guidelines

governing the FDA’s regulation of dietary supplements. 1 See Pub. L. No. 103-417,

108 Stat. 4325 (1994). Congress intended the DSHEA to “protect[] the right of

access of consumers to safe dietary supplements . . . to promote wellness.” 
Id. § 2(15)(A)
(emphasis added). And Congress expressly imposed a duty on the FDA

to “take swift action” to keep “unsafe or adulterated” dietary supplements off the

market. 
Id. § 2(13).



       1
          A “dietary supplement” is a product “intended to supplement the diet” that contains one
of the following ingredients: a vitamin; a mineral; an herb or other botanical; an amino acid; a
dietary substance used to supplement the diet by increasing the total dietary intake; or a
concentrate, metabolite, extract, or combination of any such ingredient. 21 U.S.C. § 321(ff)(1).
The product also must be intended for ingestion in tablet, capsule, powder, soft gel, gelcap, or
liquid form or, if not in such a form, the product must not be represented as “conventional food”
or the “sole item of a meal or . . . diet.” See 
id. §§ 321(ff)(2),
350(c)(1)(B).
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       The sale of “adulterated” dietary supplements is expressly banned by the

FDCA and the DSHEA. See 21 U.S.C. §§ 331(a) (prohibiting the sale of

adulterated foods), 342(f) (setting forth when a dietary supplement is deemed an

adulterated food). A supplement is adulterated if: (1) it “presents a significant or

unreasonable risk of illness or injury” when taken as directed by its label; (2) it

contains a “new dietary ingredient”; (3) the Secretary of Health and Human

Services declares it to “pose an imminent hazard to public health or safety”; or

(4) it contains a poisonous substance that renders it injurious to health. See 
id. § 342(f)(1).
       The plaintiffs in this case alleged that the dietary supplements they

purchased were adulterated because they contained “new dietary ingredients.” A

“new dietary ingredient” is one that was not marketed in the United States before

October 15, 1994. See 
id. §§ 342(f)(1)(B);
350b. 2 Congress created a presumption

that supplements containing new dietary ingredients generally should not be sold.

See 
id. §§ 342(f)(1)(B);
350b. The presumption reflected Congress’s

determination that when a dietary ingredient had no history of use in the United

States, there was “inadequate information to provide reasonable assurance that




       2
         With this definition, Congress effectively grandfathered in any dietary supplements that
were on the market when the DSHEA was enacted in October 1994. See DSHEA, Pub. L. No.
103-417, 108 Stat. 4325 (1994) (reflecting that the DSHEA was enacted on October 25, 1994).
                                                4
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[the] ingredient does not present a significant or unreasonable risk of illness or

injury.” 
Id. § 342(f)(1)(B).
      The presumption that a supplement containing a new dietary ingredient is

unsafe may be overcome with sufficient proof. There are two ways to establish

that a supplement containing a new dietary ingredient is safe enough to be sold.

Under the first exception, a supplement containing a new dietary ingredient may be

sold if it contains “only dietary ingredients which have been present in the food

supply as an article used for food in a form in which the food has not been

chemically altered.” 
Id. § 350b(a)(1).
Under the second exception, such a

supplement may be sold if there is “a history of use or other evidence of safety

establishing” that when the dietary ingredient is used as recommended or

suggested by its labeling it is “reasonably [] expected to be safe” and at least 75

days before beginning to sell the supplement, the manufacturer or distributor

provided the FDA with the information that was the basis for the conclusion that

the supplement is reasonably expected to be safe. 
Id. § 350b(a)(2).
      Viewed as a whole, the FDCA, as amended by the DSHEA, demonstrates

that Congress intended to bar the sale of dietary supplements that included

ingredients posing too great a risk to public health. With this background about

Congress’s regulation of dietary supplements in mind, we now discuss the

plaintiffs’ allegations to determine whether standing has been established.


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     II.     FACTUAL BACKGROUND AND PROCEDURAL HISTORY

       This case arises out of the plaintiffs’ purchase of the dietary supplement

Metabolic Nutrition Synedrex (“Synedrex”). 3 Since 2013, IQ has manufactured

and sold Synedrex and another dietary supplement, Metabolic Nutrition E.S.P.

(together, the “supplements”). Marketed to consumers as energy stimulants, both

supplements contain the ingredient MethylPentane Citrate, which is more

commonly known as “DMBA.”

       Consumers could purchase the supplements directly from IQ through its

website or from Europa, IQ’s exclusive distributor for the supplements. In

addition to selling the supplements directly to consumers, Europa sold them to

retailers throughout the United States, including Walgreens and

NaturalBodyInc.com, which in turn sold the supplements in their retail stores

and/or online.

       Each plaintiff purchased and used Synedrex. Debernardis purchased

Synedrex from Walgreens.com in September 2015. Damore purchased Synedrex

from websites including NaturalBodyInc.com and eBay.com in June 2015,

February 2016, and August 2016.



       3
         In reviewing whether the district court erroneously dismissed the complaint for lack of
standing, we look to the facts as they are alleged in the plaintiffs’ complaint. See Bell Atl. Corp.
v. Twombly, 
550 U.S. 544
, 570 (2007); Church v. City of Huntsville, 
30 F.3d 1332
, 1336 (11th
Cir. 1994).

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      After purchasing Synedrex, the plaintiffs sued IQ and Europa in federal

court, bringing a putative class action. They sought to represent three potential

classes: (1) both plaintiffs sought to represent a class of all persons in the United

States who purchased the supplements, (2) Debernardis sought to represent a class

of all persons in Illinois who purchased the supplements, and (3) Damore sought to

represent a class of all persons in New York who purchased the supplements. The

plaintiffs brought claims against IQ under the Florida Deceptive and Unfair Trade

Practices Act, Fla. Stat. § 501.201 et seq.; against both defendants under the

Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et

seq; against both defendants under New York General Business Law § 349, et seq;

and against both defendants for common law fraud and unjust enrichment. As the

basis for all the claims, the plaintiffs alleged that the defendants had engaged in

unlawful, deceptive, and unjust conduct when they sold the supplements and failed

to disclose that sale of the supplements was illegal in the United States.

      According to the complaint, the FDCA prohibited the sale of the

supplements because the supplements were “adulterated” and unsafe for human

consumption. Specifically, DMBA, one of the ingredients in the supplements,

qualified as a “new dietary ingredient.” Because the supplements contained a new

dietary ingredient, the plaintiffs alleged, they were adulterated for purposes of the

FDCA and presumed to be unsafe for human consumption unless there were


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sufficient indicia that the new dietary ingredient was safe. Here, neither party has

alleged or argued that the first exception—that the supplements contained only

dietary ingredients that had been present in the food supply—applied. And the

plaintiffs alleged that the supplements did not meet the second exception because

the defendants failed to provide the FDA with premarket information showing that

DMBA had a history of harmless use or other evidence of its safety.

      To further support their allegations that the FDCA banned the sale of the

supplements, the plaintiffs alleged facts showing that the FDA had determined that

DMBA was a new dietary ingredient and that other dietary supplements containing

DMBA were adulterated. In April 2015—before the plaintiffs purchased their

supplements—the FDA sent warning letters to 14 companies that sold supplements

containing DMBA. The FDA warned each company that its product was

adulterated because DMBA qualified as a new dietary ingredient and the company

had failed to provide the FDA with the appropriate premarket notice demonstrating

DMBA’s safety.

      The complaint further alleged that each plaintiff was harmed as a result of

purchasing the supplements. Each plaintiff suffered an injury by purchasing

supplements that could not be “legally sold or possessed” and had “no economic or

legal value.” Doc. 1 at ¶ 50. Because the supplements had no economic value,

each plaintiff paid an “unwarranted amount” to purchase the supplements. 
Id. 8 Case:
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        Both defendants moved to dismiss the complaint, raising, among other

arguments, that the plaintiffs lacked standing because their complaint failed to

establish that they suffered an injury in fact. The defendants argued that the

plaintiffs suffered no injury because the plaintiffs received the benefit of the

bargain they made when purchasing the supplements. In particular, the defendants

pointed out the lack of any allegation that the supplements failed to work as

intended or that the plaintiffs paid a premium for the supplements. In response, the

plaintiffs argued that they adequately alleged an economic injury by alleging that

the supplements they purchased were worthless because the FDCA prohibited their

sale.

        The district court granted the defendants’ motions to dismiss, concluding

that the plaintiffs lacked standing because they failed to allege an injury in fact.

The court acknowledged that an economic harm would qualify as a concrete injury

but determined that the plaintiffs alleged no economic harm. The court explained

that even if the supplements could not legally be sold, the plaintiffs received the

benefit of their bargain because there was no allegation that the supplements failed

to perform as advertised, that the supplements caused any adverse health effects, or

that the plaintiffs paid a premium for the supplements. After concluding that the

plaintiffs suffered no injury in fact and lacked standing, the court did not address




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the defendants’ other arguments about why the claims should be dismissed. The

plaintiffs appeal the dismissal of their claims for lack of standing.

                         III.   STANDARD OF REVIEW

      Whether the plaintiffs have standing to bring suit is a threshold jurisdictional

issue subject to de novo review. London v. Wal-Mart Stores, Inc., 
340 F.3d 1246
,

1251 (11th Cir. 2003).

                                  IV.   ANALYSIS

      The Constitution limits the power of the judiciary to “Cases” and

“Controversies.” U.S. Const. art. III, § 2. To satisfy the case-or-controversy

requirement, a plaintiff must have standing to sue. See Spokeo, Inc. v. Robins,

136 S. Ct. 1540
, 1547 (2016). The standing doctrine has “developed in our case

law to ensure that federal courts do not exceed their authority as it has been

traditionally understood.” 
Id. The doctrine
“limits the category of litigants

empowered to maintain a lawsuit in federal court to seek redress for a legal

wrong.” 
Id. To satisfy
the standing requirement, a “plaintiff must have (1) suffered an

injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant,

and (3) that is likely to be redressed by a favorable judicial decision.” 
Id. As the
parties invoking federal court jurisdiction, the plaintiffs bear the burden of

establishing these elements. 
Id. “Where, as
here, a case is at the pleading stage,


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the plaintiff must clearly allege facts demonstrating each element.” 
Id. (alteration adopted)
(internal quotation marks omitted).

      The primary standing issue in this appeal is whether the plaintiffs

sufficiently alleged that they suffered an injury in fact. Europa also raises a

second, separate standing issue: whether the plaintiffs’ allegations were sufficient

to establish that their injuries were fairly traceable to Europa’s conduct. We

address both arguments below.

A.    The Plaintiffs Alleged Sufficient Facts to Establish that Each Suffered
      an Injury in Fact.

      We begin with the question of whether the plaintiffs’ allegations were

sufficient to establish that they suffered an injury in fact. To establish an injury in

fact, a plaintiff must allege that he suffered “‘an invasion of a legally protected

interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not

conjectural or hypothetical.’” 
Spokeo, 136 S. Ct. at 1548
(quoting Lujan v.

Defenders of the Wildlife, 
504 U.S. 555
, 560 (1992)). For an injury to be concrete,

it “must be de facto; that is, it must actually exist.” 
Id. (internal quotation
marks

omitted). The Supreme Court has explained that the injury must be “real, and not

abstract.” 
Id. (internal quotation
marks omitted). In many cases, the question of

whether the plaintiff “has a cognizable injury sufficient to confer standing is

closely bound up with the question of whether and how the law will grant him

relief.” Braden v. Wal-Mart Stores, Inc., 
588 F.3d 585
, 591 (8th Cir. 2009). Yet
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we must “not . . . conflate Article III’s requirement of injury in fact with a

plaintiff’s potential causes of action, for the concepts are not coextensive.” 
Id. In this
case, the plaintiffs argue that they experienced a concrete injury

because they incurred an economic loss when they purchased the supplements.

Certainly, an economic injury qualifies as a concrete injury. See Clinton v. New

York, 
524 U.S. 417
, 432-33 (1998); MSPA Claims 1, LLC v. Tenet Fla., Inc.,

918 F.3d 1312
, 1318 (11th Cir. 2019) (explaining that an economic injury is the

“epitome” of a concrete injury). A person experiences an economic injury when,

as a result of a deceptive act or an unfair practice, he is deprived of the benefit of

his bargain. See Carriuolo v. Gen. Motors Co., 
823 F.3d 977
, 986-87 (11th Cir.

2016) (holding that class members bringing Florida Deceptive and Unfair Trade

Practices Act claims were denied the benefit of their bargain and thus injured when

they purchased vehicles that were represented as having three perfect safety ratings

but actually had no safety ratings). A plaintiff’s damages under a benefit of the

bargain theory are calculated based on “the difference in the market value of the

product or service in the condition in which it was delivered and its market value in

the condition in which it should have been delivered according to the contract of

the parties.” Rollins, Inc. v. Heller, 
454 So. 2d 580
, 585 (Fla. Dist. Ct. App. 1984)




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(internal quotation marks omitted).4 Ordinarily, when a plaintiff purchases a

product with a defect, the product retains some value, meaning her benefit-of-the-

bargain damages are less than the entire purchase price of the product. See 
id. But “[a]
notable exception” to this general rule applies when the “product is

rendered valueless as a result of a defect.” 
Id. When a
plaintiff receives a

worthless product, his benefit of the bargain damages will be equal to the entire

purchase price of the product. 
Id. The benefit-of-the-bargain
theory thus

recognizes that a purchaser who acquires a product with significant defects may

effectively receive nothing of value. See 
id. The plaintiffs,
relying on a benefit-of-the-bargain theory, argue that they

have standing to press their claims because they experienced an economic loss

when they paid money to purchase the supplements and in return received

adulterated supplements that could not lawfully be sold and thus were worthless.

To evaluate the plaintiffs’ benefit-of-the-bargain theory, we must consider two

questions: (1) does a purchaser acquire a worthless product when he purchases an

adulterated supplement? And, if so, (2) did the plaintiffs adequately allege that the

supplements they purchased were adulterated?




       4
         In discussing the nature of an injury under a benefit of the bargain theory, we rely on
Florida cases because the parties looked to Florida law and thus waived any argument that we
should look to some other state’s law or that Florida law was inconsistent with general benefit-
of-the-bargain contract principles.
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       Beginning with the first question, we accept, at least at the motion to dismiss

stage, that a dietary supplement that is deemed adulterated and cannot lawfully be

sold has no value. Through the FDCA, as amended by the DSHEA, Congress

banned the sale of adulterated dietary supplements because of its concern that such

substances could not safely be ingested. See 21 U.S.C. §§ 331(a), 342(f)(1)(B),

393(b)(2). A person who purchased an adulterated dietary supplement thus

received a product that Congress judged insufficiently safe for human ingestion.

Given Congress’s judgment, we conclude that the purchaser of such a supplement

received a defective product that had no value. This conclusion is consistent with

the well-established benefit-of-the-bargain theory of contract damages, which

recognizes that some defects so fundamentally affect the intended use of a product

as to render it valueless. See 
Rollins, 454 So. 2d at 585
.

       Turning to the second question, we conclude that the complaint plausibly

alleged that the supplements the plaintiffs purchased were adulterated. According

to the complaint, the supplements contained DMBA.5 The complaint further

alleged that DMBA was not marketed in the U.S. before 1994, and therefore it

qualified as a new dietary ingredient.6 Because the supplements contained a new


       5
          The defendants argue that MethylPentane Citrate, the relevant ingredient in the
supplements, is not the same as DMBA. But at the motion to dismiss stage, we must accept as
true the plaintiffs’ allegation that the supplements contained DMBA.
       6
       Other allegations in the complaint establish the plausibility of the plaintiffs’ allegation
that DMBA is a new dietary ingredient. For example, before the plaintiffs purchased the
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dietary ingredient, they were presumed to be adulterated. 21 U.S.C. §§ 342(f),

350b. And accepting the complaint’s allegations as true, this presumption was not

overcome. Neither party contends that the supplements contained only dietary

ingredients that were present in the food supply. See 21 U.S.C. § 350b(a)(1). And

the complaint alleged that before selling the supplements, neither IQ nor Europa

provided any notice to the FDA showing that DMBA had a history of harmless use

in food products or supplements or containing other evidence of DMBA’s safety.

Therefore, the plaintiffs adequately alleged that the supplements that they

purchased were adulterated, meaning the FDCA banned their sale.

        The district court held, and the defendants argue, that the plaintiffs’

allegations were insufficient to establish standing because the complaint included

no allegation that the supplements failed to perform as advertised or were

purchased at a premium due to a misrepresentation about the product. To support

this argument, the defendants cite a string of cases holding that plaintiffs had

standing when they alleged that a product failed to perform as advertised or was


supplements, the FDA had warned more than a dozen other companies that sold products
containing DMBA that their products were adulterated because they contained a new dietary
ingredient.
        At oral argument, the defendants argued that these warning letters carried little
significance because they were sent after the plaintiffs purchased the products. But the
complaint alleged that the FDA sent the warning letters about DMBA on April 28, 2015 and that
Debernardis purchased supplements in September 2015 and Damore purchased supplements in
June 2015, February 2016, and August 2016. We need not decide and express no opinion
whether the warning letters would be relevant if they were sent after the plaintiffs made their
purchases.
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purchased at a premium. 7 See, e.g., James v. Yamaha Motor Corp., No. 15-23750,

2016 WL 3083378
(S.D. Fla. May 31, 2016) (concluding that boat purchasers

alleged a financial injury in the form of diminution of value by alleging that they

purchased boats advertised as having “fully operational, safe, and reliable motors”

but received boats with engines subject to premature failure); Marty v. Anheuser-

Busch Cos., 
43 F. Supp. 3d 1333
, 1352 (S.D. Fla. 2014) (concluding that plaintiffs

adequately alleged that they suffered an economic harm when they paid a premium

to purchase imported beer but received beer that was brewed domestically). But

none of the defendants’ cases involved allegations that the plaintiff had acquired a

product that could not lawfully be sold. These cases found standing where the

products did not work as advertised or where the plaintiffs had paid a premium—

meaning these allegations were sufficient to establish standing—but they did not

hold that such allegations were necessary to establish standing.

       In contrast, our conclusion—that the plaintiffs have standing because they

allegedly experienced an economic loss when they purchased a product that the

FDCA banned from sale because it was presumptively unsafe—is consistent with



       7
          The district court and defendants acknowledge that a plaintiff also has standing if she
alleges that she was physically injured by the product. Of course, physical injuries are distinct
from economic injuries. There is no requirement that a plaintiff have experienced physical harm
to have an economic injury. See Adinolfe v. United Techs. Corp., 
768 F.3d 1161
, 1172 (11th Cir.
2014) (recognizing that economic harm and physical injury are distinct types of injury that can
give rise to standing). So the fact that the plaintiffs experienced no physical injury does not
mean that they experienced no economic injury.
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the only decision from another circuit to have addressed standing in this context.

The Ninth Circuit, albeit in an unpublished opinion, held that a consumer in a

similar situation adequately alleged that she suffered an injury in fact. See Franz v.

Beiersdorf, Inc., 745 F. App’x 47 (9th Cir. 2018) (unpublished). In Franz, a

consumer purchased a skin lotion that was advertised as improving skin firmness.

Id. at 48.
She sued the manufacturer under California’s unfair competition law,

claiming that she was injured by purchasing a lotion that qualified as a “drug”

under the FDCA but had not been approved by the FDA. 
Id. at 48-49.
After the

district court dismissed the complaint for lack of standing, the Ninth Circuit

reversed, holding that the consumer had standing. 
Id. The court
explained that the

consumer suffered an injury in fact when she allegedly spent money to purchase a

product that “should not have been sold” because it was illegal to sell the product.

Id. at 49.
Like the plaintiff in Franz, here the plaintiffs established an injury in fact

for standing purposes by alleging that they purchased such a product.

      In addition, at least one other circuit has recognized that under a benefit-of-

the-bargain theory an economic injury occurs when the purchaser acquires a

worthless product, even if there is no indication that she was physically harmed by

the product, the product failed to work as intended, or she paid a premium for the

product. See In re Aqua Dots Products Liability Litig., 
654 F.3d 748
(7th Cir.

2011). In Aqua Dots, the Seventh Circuit considered whether parents who


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purchased a defective toy had standing to sue even though their children were not

injured by the toy’s defect. The toy consisted of small beads that could be fused

together with an adhesive to create designs. 
Id. at 749-50.
Some of the toys were

manufactured using a substitute adhesive, which when swallowed metabolized into

gamma-hydroxybutyric acid, commonly known as the “date rape” drug. 
Id. at 749.
Some children were injured after playing with the toy when they swallowed the

beads and ingested the drug. 
Id. at 749-50.
A group of parents whose children

were not injured sued the manufacturer, distributors, and retailers of the toy. 
Id. at 750.
After the district court refused to certify a class, the parents brought an

interlocutory appeal to the Seventh Circuit. 
Id. The Seventh
Circuit addressed as a threshold matter whether the parents had

standing. The court concluded that the parents had standing because they

experienced a loss when “they paid more for the toys than they would have, had

they known the risks the beads posed to children.” 
Id. at 751.
Because the

Seventh Circuit found standing where the parents sought a refund of the entire

purchase price, the court necessarily accepted the parents’ theory that a toy that

could poison their children had no value. See 
id. at 750.
The court expressly

rejected the argument that the parents lacked standing because their children had

not been physically injured. 
Id. at 750-51.
Just like the parents in Aqua Dots, the




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plaintiffs in this case alleged that they experienced an economic injury when they

paid to purchase an unsafe and therefore worthless product.

      The defendants try to distinguish Aqua Dots by arguing that the Seventh

Circuit concluded there was standing because the parents alleged that they paid a

premium to purchase the toys. We disagree with this characterization of the

Seventh Circuit’s decision, which does not indicate that the parents alleged they

paid a premium to purchase this particular brand as compared to similar toys. The

parents in Aqua Dots instead relied on a different theory, alleging that they paid

more for the toy than they would have if they had known about the risk that it

would poison children (in which case it would have been worthless to them). See

id. at 750-51.
      We acknowledge that a district court reached the opposite result in a dietary

supplement case. See Hubert v. Gen. Nutrition Corp., No. 15-cv-1391, 
2017 WL 3971912
(W.D. Penn. Sept. 8, 2017). The plaintiffs in Hubert purchased

nutritional supplements containing the ingredients picamilon, BMPEA, or acadia

rigidula. 
Id. at *1.
They sued the retailer who sold the supplements, alleging that

they would not have purchased the supplements if they had known about the

dangers of ingesting picamilon, BMPEA, and acadia rigidula or if they had known

that FDCA banned the sale of products with these ingredients. See 
id. at *7
(explaining that the plaintiffs alleged they would not have purchased the


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supplements if the seller had disclosed that they “contained mislabeled ingredients

which supposedly pose serious health risks or were unlawful”). The district court

concluded that the plaintiffs lacked standing because they failed to allege an injury

in fact. The court explained that the plaintiffs had not been deprived of the benefit

of the bargain because they consumed the supplements and alleged no adverse

health consequences nor that the products failed to work for their intended purpose

or to deliver the promised benefits. 
Id. at *8.
      The district court in Hubert acknowledged the plaintiffs’ allegations that

they were deprived of the benefit of the bargain when they purchased supplements

that could not lawfully be sold under the FDCA, but it failed to analyze whether

these allegations established that the plaintiffs purchased a worthless product and

thus suffered an economic injury. See 
id. at *7
-9. Given the court’s failure to

grapple with the plaintiff’s argument that the products were worthless because they

could not lawfully be sold, we are unpersuaded by Hubert.

      The defendants contend our decision will mean that any consumer who

purchased a product that could not legally be sold for any reason will have

acquired a worthless product and thus have standing to sue. But we are not

deciding today whether a consumer who alleges he purchased a product that could

not legally be sold under a different statutory scheme acquired a worthless product.

We caution that our decision is limited to the specific facts alleged in this case—


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that the plaintiffs purchased dietary supplements that Congress, through the FDCA

and the DSHEA, had banned from sale with the purpose of preventing consumers

from ingesting an unsafe product.8

       To sum up, Congress through the FDCA and the DSHEA banned adulterated

supplements to protect consumers from ingesting products that Congress judged to

be insufficiently safe. The complaint’s allegations establish that the plaintiffs

purchased adulterated dietary supplements that they would not have purchased had

they known that sale of the supplements was banned. Because the plaintiffs were

deprived of the entire benefit of their bargain, we conclude they adequately alleged

that they experienced economic loss.

B.     The Plaintiffs Alleged Sufficient Facts to Show That Their Injuries Are
       Fairly Traceable to Europa.

       We now consider Europa’s argument that the plaintiffs lack standing

because as alleged, their injuries were not fairly traceable to Europa’s conduct. 9



       8
          Nor are we addressing whether a plaintiff would have standing if she allegedly
purchased a product that lawfully could be sold but came with inadequate warnings, see In re
Johnson & Johnson Talcum Powder Prods. Mktg., Sales Practices & Liability Litig., 
903 F.3d 278
, 281-82 (3d Cir. 2018), or a product that was lawfully sold at the time of purchase but whose
sale later was prohibited, see O’Neil v. Simplicity, Inc., 
574 F.3d 501
, 504 (8th Cir. 2009)
(holding that grandparents were not deprived of the benefit of their bargain when they purchased
a drop-side crib but the crib later was subject to a recall by its manufacturer and the Consumer
Product Safety Commission warned consumers not to use the crib).
       9
         Europa raised this argument for the first time at oral argument. We nonetheless
consider the argument because standing is “a threshold jurisdictional question which must be
addressed.” AT&T Mobility, LLC v. NASCAR, 
494 F.3d 1356
, 1359 (11th Cir. 2007) (internal
quotation marks omitted).
                                               21
             Case: 18-11778      Date Filed: 11/14/2019    Page: 22 of 27


To establish standing, a plaintiff must allege that her injury is “fairly traceable to

the challenged conduct of the defendant.” 
Spokeo, 136 S. Ct. at 1547
. Under this

requirement, the “line of causation” between the alleged conduct and the injury

must not be “too attenuated.” Allen v. Wright, 
468 U.S. 737
, 752 (1984),

abrogated on other grounds by Lexmark Int’l, Inc. v. Static Control Components,

Inc., 
572 U.S. 118
(2014).

      Europa argues that the line of causation is too attenuated because the

plaintiffs never directly alleged that it distributed any of the supplements they

purchased. We conclude that the plaintiffs’ economic losses were fairly traceable

to Europa’s conduct because their factual allegations support an inference that

Europa distributed the supplements each plaintiff purchased. The complaint

alleged that only two entities supplied the supplements to consumers: IQ and

Europa. IQ, the manufacturer, never distributed supplements to retailers, although

it did sell supplements directly to consumers through its website. IQ relied on

Europa to deliver its supplements to retailers, who sold the products to consumers.

According to the complaint, the retailers that Europa supplied included Walgreens

and NaturalBodyInc.com. The plaintiffs alleged that that Debernardis purchased

IQ’s supplements from Walgreens through its website and Damore purchased IQ’s




                                           22
               Case: 18-11778        Date Filed: 11/14/2019        Page: 23 of 27


supplements from NaturalBodyInc.com.10 As the sole distributor that supplied

supplements to retailers, only Europa could have provided the supplements the

plaintiffs bought.11

                                    V.      CONCLUSION

       The district court erred in concluding that the plaintiffs lacked standing. The

defendants raised in the district court a number of other arguments about why the

plaintiffs’ claims should be dismissed. But “[b]ecause none of these issues were

decided initially, we decline to address them for the first time on appeal.” Leal v.

Ga. Dep’t of Corrs., 
254 F.3d 1276
, 1280-81 (11th Cir. 2001). We thus vacate the

district court’s order granting the motion to dismiss and remand for further

proceedings consistent with this opinion.

       VACATED and REMANDED.




       10
         The complaint also alleged that Damore purchased supplements through the website
eBay.com from a vendor named BF Nutrition but did not address how BF Nutrition acquired the
supplements it sold. We need not decide, though, whether the complaint supports an inference
that Europa distributed the supplements sold by BF Nutrition. The plaintiffs alleged that Damore
purchased supplements multiple times, and their allegations are sufficient to support the
conclusion that Europa distributed at least some of the supplements Damore purchased.
       11
          We emphasize that we are deciding only that the complaint’s allegations sufficiently
established that the plaintiffs’ injuries were fairly traceable to Europa for purposes of the motion
to dismiss. At the summary judgment stage, the plaintiffs will be required to come forward with
evidence to support their allegations that Debernardis purchased Synedrex from Walgreens,
Damore purchased Synedrex from NaturalBodyInc.com, and Europa supplied Synedrex to
Walgreens and NaturalBodyInc.com. See 
Lujan, 504 U.S. at 561
(explaining that standing is an
“indispensable part of the plaintiff’s case” and “must be supported in the same way as any other
matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of
evidence required at the successive stages of the litigation”).
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             Case: 18-11778     Date Filed: 11/14/2019    Page: 24 of 27


SUTTON, Circuit Judge, concurring. In joining the court’s opinion, I wish to add a

few words about the razor’s edge of Article III jurisdiction.

      Just as Congress and the state legislatures do not have the final say over

whether a law satisfies the First Amendment, they do not have the final say over

whether something is an injury under Article III. Spokeo, Inc. v. Robins, 
136 S. Ct. 1540
, 1548–50 (2016). And just as there is not “an anything-hurts-so-long-as-

Congress-says-it-hurts theory of Article III injury,” Hagy v. Demers & Adams, 
882 F.3d 616
, 622 (6th Cir. 2018), there is not an anything-hurts-so-long-as-the-plaintiff-

says-it-hurts theory of Article III injury, Lujan v. Defs. of Wildlife, 
504 U.S. 555
,

563 (1992). Article III sets a judicially enforceable baseline that a claimant suffer

genuine harm or risk of harm, one that requires at a minimum that the injury “exist”

in the real world independent of a legislature’s choice to confer the right to sue and

independent of the plaintiff’s claim to be hurt. 
Spokeo, 136 S. Ct. at 1548
–49.

      What makes today’s case difficult is that the plaintiffs rest a seemingly

concrete injury (dollars-and-cents economic harm) on a purely procedural violation

(the defendant’s failure to file a notice with the federal Food and Drug

Administration). Joshua Debernardis and Christine Damore say they were injured

when IQ Formulations sold them dietary supplements that were illegal under federal

law, a defect they say made the supplements worthless. They hang their injury in

fact on what made the supplements illegal to sell—IQ Formulations’ failure to notify


                                          24
             Case: 18-11778     Date Filed: 11/14/2019   Page: 25 of 27


the Food and Drug Administration that it was adding a “new dietary ingredient” to

two of its products and to provide the government with evidence that the new

ingredient would be safe. See 21 U.S.C. §§ 342(f)(1)(B), 350b(a)(2). But neither

claimant alleges any traditional injuries from buying or using IQ Formulations

supplements, say that the products made them sick or did not work as advertised.

Nor do they claim that the allegedly new ingredient posed any real risk of future

injury, say that consumption of the product would increase the likelihood of

obtaining this or that disease. Cf. In re Aqua Dots Prods. Liab. Litig., 
654 F.3d 748
,

750–51 (7th Cir. 2011). All Debernardis and Damore say is that they would not

have bought the supplements had they known that IQ Formulations failed to comply

with federal law.

      Debernardis and Damore nonetheless plausibly allege an injury in fact—that

they paid more for IQ Formulations’ dietary supplements than they would have paid

had they known the company did not follow the law. This difference in price states

a concrete economic harm that satisfies Article III standing’s injury in fact element,

no matter the label we give it. Clinton v. New York, 
524 U.S. 417
, 432–33 (1998);

Dubuisson v. Stonebridge Life Ins. Co., 
887 F.3d 567
, 575 (2d Cir. 2018); Aqua

Dots, 654 F.3d at 751
; Mazza v. Am. Honda Motor Co., 
666 F.3d 581
, 595 (9th Cir.

2012). Without the benefit of discovery, we are not in a position to second guess the

harm they allege. And that suffices to permit the case to proceed.


                                         25
             Case: 18-11778    Date Filed: 11/14/2019    Page: 26 of 27


      That conclusion comes with two qualifications and one reminder.            The

discovery process may unearth facts that undermine Debernardis and Damore’s

standing to bring this claim. We reverse today in part because it is plausible for a

consumer to allege that he relies on strict compliance with Food and Drug

Administration regulations when making choices about what products to buy. At

summary judgment, each claimant will need evidence to back the point up. Why

was the product worthless to each of them? How did it deliver less than expected?

Did each of them use the product even after they knew of the labeling deficiency?

The answers to these questions and others will determine whether the case may

proceed further and, if so, how.

      At the next stages of the case, it’s also a good idea to keep in mind the easy-

to-miss distinctions between (1) injury in fact (a constitutional imperative),

(2) statutory injury (an element of the plaintiff’s cause of action), and (3) damages

(a remedies calculation). Nothing guarantees that the Article III injury that gets

Debernardis and Damore in the courthouse door is compensable under their legal

theory or, if it is, that a jury will agree that the supplements they bought were

worthless as opposed to worth less than the full purchase price.

      Even if the plaintiffs’ state-law claims eventually fail for lack of Article III

standing at the summary judgment stage, they may be able to vindicate them in state

court. The States, it’s well to remember, take a variety of approaches to standing,


                                         26
             Case: 18-11778     Date Filed: 11/14/2019   Page: 27 of 27


with many of them having no case-or-controversy requirement at all. ASARCO, Inc.

v. Kadish, 
490 U.S. 605
, 617 (1989). In some States, a claimant might even be able

to get an advisory opinion about whether a plaintiff alleging this kind of claim has

standing to bring it. Cf. In re Advisory Op. to the Governor, 
483 A.2d 1078
, 1079

(R.I. 1984); Duncan v. FedEx Office & Print Servs., Inc., 
123 N.E.3d 1249
, 1256–

57 (Ill. App. Ct. 2019). So long as the plaintiffs choose to proceed in federal court,

however, they must play by the federal rules. See Nicklaw v. Citimortgage, Inc., 
839 F.3d 998
, 1003 (11th Cir. 2016).




                                         27

Source:  CourtListener

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