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Engert v. Quincy Bioscience, LLC

United States District Court, W.D. Texas

October 8, 2019

MAX ENGERAT, JACK PURCHASE, AND RONALD ATKINSON, ON BEHALF OF THEMSELVES AND ALL OTHER SIMILARLY SITUATED, Plaintiffs
v.
QUINCY BIOSCIENCE, LLC Defendant

          THE HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE.

          REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          SUSAN HIGHTOWER UNITED STATES MAGISTRATE JUDGE.

         Before this Court are Defendant Quincy Bioscience, LLC's Motion to Dismiss Plaintiffs' First Amended Class Action Complaint, filed on June 21, 2019 (Dkt. No. 22); Plaintiffs' Response, filed on July 12, 2019 (Dkt. No. 24); and Defendant Quincy Bioscience, LLC's Reply, filed on July 26, 2019 (Dkt. No. 27). On July 24, 2019, the District Court referred the above motion to the undersigned Magistrate Judge for Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1), Federal Rule of Civil Procedure 72, and Rule 1 of Appendix C of the Local Rules of the United States District Court for the Western District of Texas (“Local Rules”).

         I. BACKGROUND

         Defendant Quincy Bioscience, LLC (“Defendant”), a foreign limited liability company organized under the laws of Wisconsin, manufactures, markets, sells, and distributes Prevagen, a dietary supplement made with the protein apoaequorin. Defendant's advertising and labeling state that Prevagen will “improve memory within 90 days” and support a “sharper mind, ” “clearer thinking, ” and “healthy brain function.” Dkt. No. 14 at ¶ 1.

         Plaintiffs Max Engert, Jack Purchase, and Ronald Atkinson (“Plaintiffs”) are Texas residents who acquired and consumed Prevagen. Plaintiffs allege that Defendant's advertisements regarding Prevagen “are false and misleading and designed to dupe consumers into purchasing a supplement that has no effect whatsoever on the brain.” Id. Plaintiffs allege that Defendant made and continues to make numerous false statements regarding Prevagen “on its website, through its commercials, on the packing, and on the bottle itself.” Id. at ¶ 37. Plaintiffs allege that Prevagen does not work as represented and contend that Defendant has repeatedly made, and continues to make, false statements about its ability to improve memory and affect the brain.

         Plaintiffs contend that Prevagen does not improve memory or support healthy brain function, a sharper mind, or clearer thinking. Plaintiff alleges that Prevagen's only active ingredient is apoaequorin, a protein that when ingested undergoes digestion, where it is broken down into its amino acid constituent parts. “As a result of being digested into amino acids, by the time that it reaches the bloodstream, Prevagen is no different than any other protein, such as those found in fish, turkey, bologna, etc. (none of which improve memory or brain function).” Id. at ¶ 27. Plaintiffs allege that the daily dose of Prevagen provides only a trivial amount of amino acids compared to the substantial amount of amino acids supplied by other proteins in daily diets.

         Plaintiffs further allege that even if Prevagen were to somehow enter the bloodstream as apoaequorin (and not in its digested form as amino acids), it does not and cannot pass through the blood-brain barrier, and thus it can never enter the brain. “Given that it cannot enter the brain, it can have no effect on brain function, including memory.” Id. at ¶ 28. Plaintiffs also allege that Defendant's claim that Prevagen has been “clinically tested” to improve memory within 90 days is false. Id. at ¶ 34. Plaintiffs contend that there has never been an independent, randomized, controlled clinical trial subjected to a peer review process that supports Defendant's claims. Plaintiffs assert that “there is no scientific basis for the representations by Defendant that Prevagen improves memory.” Id. at ¶ 36. Plaintiffs also allege that consumers in Texas, particularly the elderly, have been significantly harmed by Defendant's false and misleading advertisements.

         On February 25, 2019, Plaintiffs filed this class action lawsuit against Defendant, on behalf of themselves and all others similarly situated, pursuant to Rule 23 of the Federal Rules of Civil Procedure, alleging claims under the Texas Deceptive Trade Practices Act (“DTPA”), Tex. Bus. & Com. Code § 17.41 et seq.; breach of express and implied warranties; and a violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-12.[1] Plaintiffs bring this action on behalf of the “Texas Class, ” consisting “of all citizens of Texas who, within the last four years prior to the filing of this Complaint, purchased Defendant's product Prevagen, ” as well as the “National Class, ” consisting “of all citizens of the United States who, within the last four years prior to the filing of this Complaint, purchased Defendant's product Prevagen.” Id. at ¶¶ 10-11. Plaintiffs seek to recover their economic losses, treble damages, exemplary damages, attorney's fees, costs and interests, and all other relief to which they and the Class Members are entitled.

         On June 21, 2019, Defendant filed the instant Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that Plaintiffs fail to state a claim because the clinical trial on which Defendant premised its advertisements for Prevagen conclusively demonstrates that Defendant's marketing statements about Prevagen were both truthful and fully substantiated. Alternatively, Defendant argues that all of Plaintiffs' claims fail to meet the pleading requirements of Federal Rule of Civil Procedure 9(b).

         II. LEGAL STANDARDS

         Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss an action for failure to state a claim on which relief can be granted. In deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim, the court “accepts all well-pleaded facts as true, viewing them in the light most favorable to the [nonmovant].” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (internal quotation marks omitted). The Supreme Court has explained that a complaint must contain sufficient factual matter “to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the [nonmovant] pleads factual content that allows the court to draw the reasonable inference that the [movant] is liable for the misconduct alleged.” Ashcroft, 556 U.S. at 678. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotations and citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. “The court's review is limited to the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010). Rule 9(b) provides that, “in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Fifth Circuit precedent interprets Rule 9(b) strictly, requiring the plaintiff to “specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.” Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir. 1997); Nathenson v. Zonagen, Inc., 267 F.3d 400, 412 (5th Cir. 2001).

         III. ANALYSIS

         A. Extrinsic Evidence

         Defendant first argues that all of Plaintiffs' claims asserted in this case fail because Defendant's clinical drug trial (“the Study”), on which Defendant allegedly premised its advertisements for Prevagen, “conclusively demonstrates that Quincy's marketing statements about Prevagen were both truthful and fully substantiated.” Dkt. No. 22 at p. 1. Plaintiffs argue that the Court should not consider the Study because it “is extrinsic evidence that cannot be considered in a Rule 12(b)(6) Motion.” Dkt. No. 24 at p. 14. The Court agrees.

         “In determining whether a plaintiff's claims survive a Rule 12(b)(6) motion to dismiss, the factual information to which the court addresses its inquiry is limited to the (1) the facts set forth in the complaint, (2) documents attached to the complaint, and (3) matters of which judicial notice may be taken under Federal Rule of Evidence 201.” Walker v. Beaumont Indep. Sch. Dist., __F.3d__, 2019 WL 4458378, at *4 (5th Cir. Sept. 18, 2019); see also Lone Star Fund, 594 F.3d 383, 387 (5th Cir. 2010). “When a defendant attaches documents to its motion that are referenced in the complaint and are central to the plaintiff's claims, however, the court can also properly consider those documents.” Inclusive Cmtys. Project, Inc. v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019); see also Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004).

         In this case, Plaintiffs neither referred to the Study in their First Amended Complaint (“FAC”) nor attached the Study to their FAC. See Tostado v. Citibank (S. Dakota), N.A., 2009 WL 4598030, at *1 (W.D. Tex. Dec. 3, 2009) (finding Defendant's attached evidence was outside of the pleadings where Plaintiff did not cite the specific document attached). Nevertheless, Defendant argues that the Court should consider the Study in this Motion to Dismiss because Plaintiffs mentioned the Study in their Original Complaint. “An amended complaint supersedes the original complaint and renders it of no legal effect unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleading.” King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994). Accordingly, Plaintiffs' FAC replaced the Original Complaint “for all purposes, ...


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