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Judge Upholds Dismissal of Relacore Suit

Plaintiffs allege fraudulent, misleading statements by manufacturer

By Jon Hood
ConsumerAffairs.com

August 20, 2009
A New Jersey court affirmed the dismissal of a class action against the manufacturer of the drug Relacore last week, agreeing with the trial judge that attorneys for the plaintiffs had not satisfied the prerequisites for granting class certification to the case.

The suit, filed by lead plaintiff Melissa Lee in November 2004, alleged that the Carter-Reed Company fraudulently advertised the drug as reducing belly fat. Despite Carter-Reed's claims, Lee actually gained weight while on the recommended 90-day regimen. In addition to common law and statutory fraud claims, Lee's suit also included counts for unjust enrichment and breach of implied and express warranty.

The court ruled that too many factual and legal issues varied from plaintiff to plaintiff, defeating one of the main justifications for bringing a class action suit. Under federal court rules, class actions must involve issues of fact or law common to every class member.

Specifically, the appellate judges endorsed trial Judge Catherine Dupuis's finding that 14 fraud-related factors would require a hearing for every member of the class. These factors included which advertisements consumers saw, whether these advertisements induced them to buy the product, the amount they paid for the drug, and whether they asked for a refund after discovering Relacore's ineffectiveness.

Lee's lawsuit had defined a class of all New Jersey consumers who bought Relacore since it was first introduced in 2002. The suit had originally sought certification of a nationwide class, but Lee's attorneys narrowed it to New Jersey in 2006.

The decision by the Appellate Division apparently leaves the case in limbo, at least for the moment. Lee's attorneys have not announced whether they plan to appeal to the New Jersey Supreme Court. If they don't, Relacore buyers may be out of luck; the appellate judges noted that individual damages, ranging from $40 to $120, are not high enough to make it worth consumers' while to spend time and money bringing individual cases.

The case attracted the attention of at least one consumer rights group. In an amicus curiae brief filed with the court, Public Citizen, a non-profit consumer advocacy organization, said its goal was to ensure that consumers are protected from "fraudulent mass media advertising campaigns."

Relacore's website tells consumers that "It may take more than diet and exercise to fight stress-related belly fat." Relacore claims to work by triggering stress-reducing compounds, which in turn lower the level of cortisol produced by the body. Cortisol is a hormone produced when a person is stressed, and, according to Relacore, "is associated with stubborn stress-related abdominal fat."

Like many weight loss supplements, Relacore is not approved by the FDA. In 2006, the Federal Trade Commission (FTC) warned manufacturers of diet supplements that advertisements containing unsubstantiated claims could violate consumer laws. After that announcement, Relacore modified commercials to say that Relacore is a drug that may reduce stress levels and indirectly lead to weight loss. The company no longer promises that Relacore will lead directly to a better body.

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