Court Opinion

ID: 8212233
Source: CourtListenerOpinion
Date Created: 2022-10-06 16:00:29.50202+00
Date Added: 2024-06-11T16:42:08.448419
License: Public Domain

United States Court of Appeals
                              For the Eighth Circuit
                          ___________________________

                                  No. 21-3150
                          ___________________________

          Christine Vitello, on behalf of herself and others similarly situated

                          lllllllllllllllllllllPlaintiff - Appellant

                                             v.

                                       Natrol, LLC

                         lllllllllllllllllllllDefendant - Appellee
                                        ____________

                      Appeal from United States District Court
                    for the Eastern District of Missouri - St. Louis
                                    ____________

                               Submitted: June 15, 2022
                                Filed: October 6, 2022
                                    ____________

Before LOKEN and KELLY, Circuit Judges, and MENENDEZ, District Judge.*
                            ____________

LOKEN, Circuit Judge.

       The Missouri Merchandising Practices Act (“MMPA”) declares unlawful the
use “of any deception, fraud, false pretense, false promise, misrepresentation, unfair
practice or the concealment, suppression, or omission of any material fact in

      *
       The Honorable Katherine M. Menendez, United States District Judge for the
District of Minnesota, sitting by designation.
connection with the sale . . . of any merchandise in trade or commerce.” Mo. Rev.
Stat. § 407.020.1. The MMPA authorizes a private damage action by any consumer
who “purchases or leases merchandise . . . and thereby suffers an ascertainable loss
of money or property . . . as a result of the use . . . by another person of a method, act
or practice declared unlawful.” § 407.025.1. The primary issue on this appeal is
whether a pharmaceutical purchaser suffers an ascertainable loss caused by the
seller’s misrepresentation of supporting clinical studies when the product’s packaging
states that it does not provide the benefit the purchaser is seeking. The district court
answered this question in the negative and, based on Christine Vitello’s discovery
admissions, granted Natrol, LLC’s motion for summary judgment dismissing
Vitello’s MMPA and unjust enrichment claims. Vitello appeals. Reviewing the grant
of summary judgment de novo, we affirm. See Toben v. Bridgestone Retail
Operations, LLC, 751 F.3d 888, 896 (8th Cir. 2014) (standard of review).

                                    I. Background

       A. The Transactions at Issue. Vitello was diagnosed with attention-deficit
disorder (“ADD”) in 2004 and was prescribed Adderall to treat symptoms that
included “[b]eing forgetful, disorganized, scatterbrained” and “[n]ot being able to
retain anything.” Apart from isolated pauses to avoid negative side effects, Vitello
used Adderall as prescribed for thirteen years, noticing a “pretty significant difference
in memory and concentration.”

       On June 22, 2017, Vitello saw Cognium, a “nutraceutical” manufactured by
Natrol, on sale in Arnold, Missouri. Cognium, according to Natrol’s advertising,
improves memory and concentration. Its packaging stated that Cognium is “powered
by Cera-Q, a natural protein from silkworm cocoons,” and can improve “Memory
Recall Efficiency” by 90% when taken twice daily for four weeks. The box claimed
that “[n]ine clinical studies in adults, seniors and children showed statistically
significant improvements in memory and cognition in 4 weeks or less when taken as

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directed.” The Cognium bottle also contained two disclaimers that frame the issue
on appeal: first, below “Clinically Proven to Improve Memory and Concentration”
statements, an FDA-mandated disclaimer for all nutritional supplements:

      These statements have not been evaluated by the Food and Drug
      Administration. This product is not intended to diagnose, treat, cure or
      prevent any disease.

See 21 C.F.R. § 101.93(c)(2). Second, at the end of the “Supplement Facts”
statements: “Consult your healthcare professional prior to use if you have or suspect
a medical condition, are taking prescription drugs, or if you are pregnant or lactating.”

      After reading the packaging, Vitello purchased a box of Cognium for $19.97.
Without consulting her doctor, Vitello quit Adderall “cold turkey” and started taking
Cognium five to seven days later. She took Cognium twice daily for sixty days,
purchasing a second bottle on July 31 for $16.97. She noticed no positive effect in
memory or concentration, feeling “almost exactly the same on Cognium as before I
was on Adderall.”

       In June 2018, Vitello filed a putative class action complaint against Natrol,
seeking damages for herself and establishment of a National Class and Missouri
Consumer Subclass. Vitello alleged that, prior to her purchases of Cognium, two of
the nine clinical studies noted on its packaging had been retracted, including one for
“data fabrication and falsification”; that Natrol did not update its packaging or inform
consumers of the retractions; and that Vitello “would not have purchased the
Cognium and sustained the loss had [Natrol] disclosed in its box/packaging, bottle,
and brochure that two (2) of the nine (9) clinical studies had been retracted for data
manipulation and fraud/fabrication.” She asserted causes of action for violations of
the MMPA and unjust enrichment. After suit was filed, consistent with its advertised

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money back guarantee, Natrol issued a refund check to Vitello for the purchase price
of the two bottles of Cognium she bought. Vitello refused to cash the check.

       B. Procedural History. In December 2018, the district court1 denied Natrol’s
Rule 12(b)(6) motion to dismiss the Class Action Complaint for failure to state a
claim, concluding that Vitello alleged sufficient facts to support the elements of her
MMPA and unjust enrichment damage claims. The court issued a case management
order directing that discovery first proceed on class certification issues. After
discovery including interrogatories, document production, and depositions of Vitello
and a Natrol representative, Vitello moved for class certification. Natrol opposed and
moved for summary judgment dismissing Vitello’s individual claims, submitting in
support a Statement of Uncontroverted Material Facts. Rather than respond to the
Statement, Vitello filed a motion seeking additional discovery from two Natrol
potential expert witnesses. See Fed. R. Civ. P. 56(d).

      After considering both parties’ motions and reviewing the completed
discovery, the district court2 concluded that one of Natrol’s summary judgment
arguments posed a purely legal question -- whether Vitello’s admissions at her
deposition that she took Cognium as a substitute for Adderall without consulting her
doctor precluded her from proving an MMPA or unjust enrichment claim. The court
denied Vitello’s Rule 56(d) motion because it sought additional discovery not
relevant to this issue of law and ordered her to respond to Natrol’s summary judgment
motion. After Vitello did so, the court found her brief largely unresponsive. The
court granted summary judgment for Natrol on both the MMPA and unjust
enrichment claims, concluding that Vitello’s admissions that she purchased Cognium

      1
       The Honorable Rodney W. Sippel, United States District Judge for the Eastern
District of Missouri.
      2
       The Honorable Sarah E. Pitlyk, United States District Judge for the Eastern
District of Missouri, to whom the case had been reassigned.

                                         -4-
as a substitute for the Adderall prescribed to treat her ADD, without consulting her
physician, was direct non-compliance with the disclaimers printed on the Cognium
packaging that precluded her from proving her MMPA and unjust enrichment claims
as a matter of law. With Vitello’s individual claims dismissed, the court determined
the sole named plaintiff could not represent the purported class and dismissed the
entire action. See In re Milk Prod. Antitrust Litig., 195 F.3d 430, 436 (8th Cir. 1999),
cert. denied, 529 U.S. 1038 (2000). On appeal, Vitello argues the district court erred
in granting summary judgment dismissing her MMPA and unjust enrichment claims.

                                  II. MMPA Issues

       Vitello alleges that Natrol violated the MMPA by failing to disclose the prior
retraction of two of nine clinical studies Natrol claimed supported Cognium’s
advertised memory and cognition benefits. Vitello alleges that she would not have
purchased the product if Natrol had not made these misrepresentations, and that she
“did not experience any improvement in her memory, concentration or cognition”
while taking Cognium. To prove this MMPA claim, Vitello must show that she “(1)
purchased merchandise . . . from [Natrol]; (2) for personal, family or household
purposes; and (3) suffered an ascertainable loss of money or property; (4) as a result
of an act declared unlawful under the [MMPA].” Murphy v. Stonewall Kitchen, LLC,
503 S.W.3d 308, 311 (Mo. App. 2016). At issue on appeal is the ascertainable loss
element of the MMPA private right of action in Mo. Rev. Stat. § 407.025.1.

       Missouri courts have interpreted the ascertained loss element of this statutory
MMPA claim as incorporating Missouri’s long-standing “benefit of the bargain”
common law fraud remedy. See Sunset Pools of St. Louis, Inc. v. Schaefer, 869
S.W.2d 883, 886 (Mo. App. 1994). “The ‘benefit of the bargain’ rule awards a
prevailing party the difference between the value of the product as represented and
the actual value of the product as received.” Thompson v. Allergan USA, Inc., 993
F. Supp. 2d 1007, 1012 (E.D. Mo. 2014).

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       In concluding that Vitello cannot establish an ascertainable loss as a matter of
law, the district court relied on Natrol’s Statement of Uncontroverted Material Facts,1
and in particular on many of Vitello’s own sworn statements, including that she was
diagnosed with ADD in 2004; her doctor prescribed Adderall, an FDA-approved
stimulant to treat cognitive dysfunction; from 2004 through 2017, she relied on
Adderall to be able to concentrate; she stopped taking Adderall “cold turkey,” without
consulting her physician, because she hoped Cognium would be “a better alternative”
to treat her ADD symptoms, offering the same benefits without negative side effects;
she read the box before purchasing and read the carton and bottle and a pamphlet
inside the carton before consuming Cognium; she was aware of and probably read the
two disclaimer warnings; she did not read the nine clinical studies at issue and would
purchase health supplements supported by fewer than nine studies; she “took
[Cognium] and it didn’t work”; she does not hope to recover more from Natrol than
the amount she paid for Cognium; and she refused Natrol’s refund check.

       Based on these admissions, the district court concluded that Vitello cannot
establish she suffered “an ascertainable loss . . . as a result of” Natrol’s alleged
unlawful non-disclosures. § 407.025.1. At the time of the transactions, Vitello was
aware that Cognium was not intended to serve as a substitute for the physician-
prescribed Adderall then treating her ADD. Yet she purchased and used it for just
that purpose. As the district court explained:

      Under the benefit of the bargain rule, establishing ascertainable loss
      requires that the value of Cognium “as represented” is less than the
      “actual value.” Murphy, 503 S.W.3d at 313. At the time Vitello
      purchased it, Cognium’s packaging clearly stated that it was not

      1
       Because Vitello did not respond to this Statement, those facts “shall be
deemed admitted for purposes of summary judgment.” E.D. Mo. Local Rule 4.01(E).
Vitello’s Rule 56(d) motion for additional discovery did not excuse her failure to
comply with this Rule. See Roe v. St. Louis Univ., 746 F.3d 874, 881 (8th Cir. 2014).

                                         -6-
      intended to treat any disease and cautioned consumers to consult their
      healthcare providers if they had any medical condition or were taking
      prescription drugs. “As represented,” then, Cognium was a nutraceutical
      that would not treat ADD. Vitello cannot . . . establish ascertainable loss
      by showing that the product failed to do something it never purported to
      be capable of. . . . Vitello never “bargained” for Cognium as a
      replacement for Adderall, so she cannot have lost that purported benefit.
      Thus, regardless of any alleged misrepresentation of the clinical basis
      for the claims Natrol did make, Vitello cannot succeed on her MMPA
      claim.

       We conclude the district court’s reasoning is consistent with the statute and
Missouri MMPA precedent. Vitello testified she felt “almost exactly the same on
Cognium as before I was on Adderall.” Thompson v. Allergan USA, Inc. is
analogous. In Thompson, the court dismissed an MMPA claim that defendant was
overfilling an eyedrop medication’s single-dose dispensers:

      Plaintiff has . . . not alleged that the [product] was anything other than what it
      has always purported to be -- a single-use vial. Accordingly, Plaintiff has
      failed to allege that she did not receive the benefit of the medication for which
      she bargained. In short, Plaintiff bargained for a single dosage . . . she received
      what was always purported to be a single dosage, and the medication
      performed as a single dosage.

993 F. Supp. 2d at 1012. Here, Vitello purchased a product that expressly stated on
the label it was “not intended to” do what she stated she purchased it for, serve as a
substitute treatment for her prescription medication. Thus, for Vitello, the actual
value of the Cognium she purchased, and the value of Cognium without Natrol’s
alleged marketing misrepresentations, was the same -- as Vitello said in her
interrogatory answers, “zero.” The benefit of the bargain rule does not apply in this
situation, so Vitello cannot prove that she suffered ascertainable loss “as a result of”
Natrol’s unlawful practice. See Plubell v. Merck & Co., 289 S.W.3d 707, 714 (Mo.
App. 2009).

                                          -7-
        Vitello’s arguments to the contrary are unpersuasive. She argues that summary
judgment was improper because whether she would have purchased Cognium if she
had known about the two retracted studies is a triable issue of fact. Maybe so. But
that fact would not establish MMPA ascertainable loss. Alternatively, she relies on
Missouri cases holding that certain affirmative defenses “cannot, as a matter of law,
defeat an MMPA claim.” Murphy, 503 S.W.3d at 312-14 (“ingredients list” defense);
Huch v. Charter Commc’ns, Inc., 290 S.W.3d 721, 725-27 (Mo. 2009) (voluntary
payment defense). But Natrol does not rely on its disclaimers as an affirmative
defense. Assuming without deciding that Natrol’s claims regarding the nine clinical
studies were unlawful acts under the MMPA and that the packaging disclaimers
would not lead a reasonable consumer to question those fraudulent claims, Vitello has
still failed to show ascertainable loss resulting from the unlawful acts.

        Finally, Vitello argues that the district court’s interpretation of the ascertainable
loss element is contrary to the Supreme Court of Missouri’s recognition that the
MMPA’s broad purpose is “to preserve fundamental honesty, fair play and right
dealings in public transactions” and “protect those that could not otherwise protect
themselves.” Huch, 290 S.W.3d at 724, 727 (Mo. 2009) (quotations omitted). But
the district court did not hold that Natrol’s disclaimers protect it from MMPA
liability. Rather, applying Missouri’s benefit of the bargain rule, a generous common
law fraud remedy, the court concluded that Vitello could not prove a critical element
of her statutory claim. This is analogous to the Supreme Court of Missouri’s
statement in denying relief in Chochorowski v. Home Depot U.S.A., 404 S.W.3d 220,
228 (Mo. 2013): “There is no conflict between the intention of the legislature in
enacting the MMPA and the application of the basic tenets of contract law to the
transaction in this case.”

                                            -8-
                              III. Unjust Enrichment

       Vitello also appeals the district court’s grant of summary judgment dismissing
her claim of unjust enrichment, an issue her briefs barely address. To prove this
claim, Vitello must show (1) she conferred a benefit and enriched Natrol; (2) the
enrichment was at Vitello’s expense; and (3) it would be unjust for Natrol to retain
the benefit. See Hawkins v. Nestle USA Inc., 309 F. Supp. 3d 696, 708 (E.D. Mo.
2018). The third element is most significant. “Mere receipt of benefits is not enough
when there is no showing that it would be unjust for defendant to retain the benefit
received.” S & J, Inc. v. McLoud & Co., 108 S.W.3d 765, 768 (Mo. App. 2003)
(quotation omitted). Here, Natrol received a benefit at Vitello’s expense -- the
wholesale price of the Cognium she purchased. However, the district court
concluded, “[b]ecause Vitello purchased Cognium to replace Adderall despite her
awareness of [the two disclaimers] . . . . her disadvantage is unconnected to Natrol’s
alleged wrongful conduct and she cannot establish that it was ‘unjust’ for Natrol to
retain the purchase price.” We agree. Cf. Bratton v. The Hershey Co., No.
2:16-cv-4322-C-NKL, 2018 WL 934899 at *4 (W.D. Mo. Feb. 16, 2018). We further
note that Vitello’s refusal of Natrol’s check refunding the purchase price, the only
disadvantage Vitello claimed in her deposition testimony, might foreclose this claim.

                                  IV. Conclusion

      The judgment of the district court is affirmed.
                     ______________________________

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