The chances of dietary supplement brands getting caught up in class actions are about as high as Doug Benson at a Snoop Dogg shindig on 4/20.
Does that mean entrepreneurs should shun the dietary supplement niche? Heck no. To be blunt (wink), there is money in them there hills pills — but only for people who develop genuinely helpful, healthy, products that pass FDA and FTC compliance muster.
Explain To Me Like I’m Five: How Do Dietary Supplement Class Actions Work?
First, a disclaimer: Lawsuits are detail-dependent; making a step-by-step, boilerplate procedural summary impossible.
Proviso aside, this is how it typically works:
- A clutch of consumers (a.k.a., the class), represented by a law firm, accuses a product, service, or company of harm.
- On behalf of the class, the law firm sends a demand letter, to the targeted company, detailing the complaint.
- Upon receipt of the letter, the company either a) immediately starts settlement negotiations or b) responds with a counter argument.
- If an agreement can’t be reached, and a judge deems the issue debatable, then the trial portion of the class action kicks off.
Dietary Supplement Class Actions: Avoidance Techniques
How can suppliers and marketers avoid dietary supplement class actions?
- Quadruple check supply chain vendors. Investigate like you’re vetting a running mate; send reliable, in-person inspectors to examine factories. Don’t skimp. This is the most important step in establishing a successful e-commerce operation. Plenty of businesses help U.S. sellers evaluate overseas partners. Use them.
- Before taking a product to the people, let a lawyer look over your marketing materials, packaging, labeling, and contracts. The small cost of a compliance audit is nothing compared to an FDA or FTC fine.
- Plan ahead and set aside budgetary money for a dietary supplement class action. That doesn’t mean stashing $1 million in a Swiss savings account; but consider a business insurance package, with ample litigation coverage.
Dietary Supplement Law Attorney
Internet business law firm Kelly / Warner regularly works with dietary supplement manufacturers and marketers. Our team performs compliance reviews, resolves supply chain issues, drafts and negotiates contracts, assists with business formation matters, and handles litigation needs.
We’re a phone call away. Let’s chat.