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
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 United..
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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).
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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.
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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).
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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
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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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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
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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.
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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,
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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