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Cell Tech Loses False Advertising Suit

Stephen Barrett, M.D.

Cell Tech International was founded in 1982 by Daryl J. Kollman, whom company literature describes as a "noted scientist, lecturer, author and educator." [1] Its headquarters is located in Klamath Falls, Oregon. It markets a line of products whose sole or principal ingredient is made from alga harvested from Klamath Lake. The company, publicly traded since 1996, markets its products through a network independent distributors. Its reports to the Securities and Exchange Commission can be viewed by searching Free Edgar for "EFLI."

Since its inception, Cell Tech has made unsubstantiated claims for its products. It has claimed that the American food supply is deficient and that alga products can supply what is missing. Such claims are doubly false because sensible eating supplies what most people need and the quantities of most nutrients in alga are insignificant. Cell Tech and/or its distributors have also claimed that the products are effective against many health problems. However, alga products no proven value for treating any medical problem, and some may contain potent toxins [2].

In October 2001, Teachers for Truth in Advertising filed a suit in California objecting to 30 claims the company had made in brochures or on its Web site [3]. Here are the claims followed by plaintiff's reasons for concluding they were "false, misleading, or deceptive." [4]

1. "What prevents vibrant health, and why are people accustomed to lower levels of health?
   . . . Traditional organic framing has given was to large scale, chemical dependent agriculture. agriculture. The shift has resulted in an alarming and steady decline in the nutritive value of many of our foods." [People who eat a balanced diet will receive all the nutrients they need.]
2. "For your general health and well being there is literally no substitute for Super Blue Green Algae. No other food source can make such a difference in your health. Our company's foundation exists in the belief that we have discovered the world's most effective superfood, and that our job is to make it available in its purest form to everyone." [The algae pills have no medicinal benefits and are not a good source of nutrients because the levels of most nutrients they contain are insignificant.]
3. "More physical energy" [There is no scientific evidence that algae pills boost physical stamina.]
4. "Omega Sun is excellent for . . . Children or adults who may benefit from better concentration." [The algae pills have no medicinal benefits.]
5. "Consider every aspect of modern technological agribusiness, from seed stocks to plowing and planting, refrigeration, transport, processing, and distribution . . . and most recently the creation of what some are calling 'frankenfoods,' the infamous Genetically Modified Organisms (GMOs). Each step in this technological chain of events has the potential to degrade and decrease the nutrient viability of our food." [Modern agricultural techniques do not degrade and decrease the nutrient content of our food. All the necessary nutrients are still in our food supply. People who eat a balanced diet receive the nutrients they need.]
6. "Every cell in our body ends up missing essential nutrients because they are no longer in our food. Or the nutrients decompose on the way to our table, due to radically altered harvesting, processing, and distribution methods." [Modern agricultural techniques do not degrade and decrease the nutrient content of our food. All the necessary nutrients are still in our food supply. People who eat a balanced diet receive the nutrients they need.]
7. "But, if nutrient deficiencies exist (as they almost always do in our modern food supply), micronutrient co-factors (vitamins, minerals, trace minerals, pigments, amino acids, etc.) necessary for the enzymes to work simply are not there." [The American food supply is not deficient.]
8. "since children are in a stage of rapid growth and development it means that, most of all, are in need of trace minerals and amino acids that are in algae." [Children should not take algae products because of potential contamination with toxic substances.]
9. Our food - when we do not have time to eat it! - is missing vital nutrients and minerals, and our bodies are not getting the nutrients they need to run efficiently at the cellular level. [Modern agricultural techniques do not degrade and decrease the nutrient content of our food. All the necessary nutrients are still in our food supply. People who eat a balanced diet receive the nutrients they need.]
10. "People don't buy our products, they buy results. They buy what we have -- and what they want: shiny hair, no naps, nicer disposition, sound sleep, extra vitality and more." [There is no scientific evidence that algae promote shiny hair or sound sleep.]
11. "Scientific research proves that our core products help maintain healthy cholesterol levels, boost the immune system, and provide a good dietary source of omega-3 fatty acids, which are important for proper brain function." [There is no scientific evidence that algae pills help maintain cholesterol levels, boost the immune system, or are a good source of omega-3 fatty acids.]
12. "Conditions that are likely to be improved by Super Blue Green Algae include chronic fatigue, fibromyalgia, hypertension, attention deficit disorder, ear infection (in children, mostly), depression, viral infections, including HIV, and irritable bowel syndrome." [There is no competent and reliable scientific evidence that algae products help any of the listed conditions.]
13. "Scientists reported that Super Blue Green Algae decreased cholesterol levels by up to 75%." [There is no competent and reliable scientific evidence supporting this claim.]
14. "Super Blue Green Algae is an excellent source of omega-3 fatty acids." [At recommended levels, the product is not even a good source.]
15. "Super Blue Green Algae and traumatic brain injury. Preliminary data suggested three years ago that Super Blue Green had the ability to modify and improve brain function." [The product has no known benefits for brain injury.]
16. Super Blue Green Algae gives you "the ability to train harder and longer." [There is no scientific evidence that algae pills boost physical stamina.]
17. "This shift has resulted in an alarming and steady decline in the nutritive value of many of our foods." [The American food supply is not nutrient-deficient.]
18. Micronutrients are "less available in our diet" due to this shift. [The American food supply is not nutrient-deficient.]
19. Super Blue Green Algae leads to "energy, mental clarity, and immune support." [There is no scientific evidence that algae pills have a medicinal or health benefit or boost stamina.]
20. Super Blue Green Algae is "nature's most amazing superfood." It includes a "wealth of nutrients" including being "brimming with amino acids, essential fatty acids, enzymes, minerals, and vitamins." [The algae pills at recommended levels are not a good source of nutrients. In addition, the vitamins in algae may not be bioavailable.]
21. "Super Blue Green Algae is an excellent source of omega-3 fatty acids." [At recommended levels, the product is not even a good source.]
22. "Super Blue Green Algae is perfect nutrition" similar to human breast milk." [The algae pills at recommended levels are not a good source of nutrients.]
23. "Enhanced immune support for adults, kids and pets alike." [Algae pills have no medicinal or health benefit for humans. Children should not take them because of potential contamination with toxic substances.]
24. "High concentrations of easily assimilated vitamins and minerals." [The algae pills at recommended levels are not a good source of nutrients. In addition, the vitamins in algae may not be bioavailable.]
25. "Feeds and enhances brain activity." [Algae pills have no medicinal or health benefit for humans.]
26. Cleans the intestine. [Algae pills have no medicinal or health benefit for humans.]
27. Improves absorption of nutrients. [At recommended levels, the product is not even a good source of nutrients.]
28. Eliminates digestive disturbances. [Algae pills have no medicinal or health benefit for humans.]
29. Reverses the aging process [customer testimonial]. [Algae pills have no medicinal or health benefit for humans.]
30. Eliminates headaches [customer testimonial]. [Algae pills have no medicinal or health benefit for humans.]

For some of the above, defense witnesses supported plaintiff's view that the claims had been misleading.

The Judge's Decision

In February 2003, the judge ruled that all of the above statements were deceptive. He banned their further use in California and ordered Cell Tech to refund the full purchase price to California consumers who purchased its algae products between October 1997 and September 2002. The judge stated:

Based on the testimony of Drs. Lashof and Blonz, their qualifications and their reasons, the court finds that all of the printed and video promotional representations set forth in plaintiff's Post-trial Brief with respect to the nutritional value, character and beneficial uses; of defendant's pond algae product constitute advertising which is deceptive as untrue, unfounded or likely to mislead, although accurate on some level as proscribed in Business and Professions Code Sections 17200 and 17500. . . .

While competent and reliable clinical trials satisfying Food and Drug Administration standards to establish the safety and effectiveness of prescription drugs may not be required for nutritional supplements, defendant's advertising as to the need for and benefits from defendant's product imply that there is some reliable scientific basis for the claims such as would be reasonably expected by potential users. There is not. Trials, conducted by individuals with a financial interest in the product and reported in a marginal peer review journal, reporting lowered cholesterol levels in a few rats dosed with the substance and an immune reaction in humans a few hours after ingesting extraordinary doses of substance are not such a reasonably reliable basis for the public claims of cholesterol lowering or immune enhancing properties of the product. There are no clinical trials of any type supporting any of the other numerous claims in defendant's advertising. Further, anecdotal testimonials are not reliable evidence of need for effectiveness of the product.

Claims under the Business and Professions Code for fraudulent and misleading advertising of nutritional supplements are not preempted by either the federal Food, Drug and Cosmetic Act, 21 U.S.C.. Sec. 310 et seq. or California Food , Drug, and Cosmetic Laws, Health and Safety Code Sec. 109875 et seq. . . . Neither of agencies administering these statutes evaluate claimed benefits of nutritional supplements or require any support for off-label claimed benefits.

Plaintiff is entitled to injunctive relief prohibiting defendant from making any of the specified deceptive representations in its advertising or literature disseminated in California, an order requiring defendant to make a full refund of the purchase price paid by California customers for its algae products commencing four years prior to filing of complaint herein to the date of trial, and judgment for attorneys fees and costs [5].

and

The court finds the representations set forth in paragraphs 1-41 false, or in the case of the structure-function claims, scientifically unsubstantiated. All of such representations are likely to deceive a reasonable consumer. . . .

Defendant's deceptive representations are not protected commercial speech under state or federal Constitutions [6].

The parties have negotiated a confidential settlement agreement and submitted it for court approval [7]. Teachers for Truth in Advertising was represented by Attorney Shawn C. Hirsch of Porterville, California, who declined to be interviewed for this article.

References

1. The Miracle of Super Blue Green Algae (booklet). Klamath Lake, Oregon: Cell Tech, May 1994.
2. Gilroy GJ and others. Assessing potential health risks from microcystin toxins in blue-green algae dietary supplements. Environmental Health Perspectives 108:435-439, 2000.
3. Complaint for untrue or misleading advertising (Bus. And Prof. Code Section 17500) and commission of unlawful, unfair and fraudulent business acts and practices (Bus. and Prof. Code Section 17200). Teachers for Truth in Advertising v Cell Tech Products, Inc. Superior Court of California for the County of Tulare, Case No. 19777, Oct 23, 2001.
4. Plaintiff's post-trial brief on remedies and deceptive statements. Teachers for Truth in Advertising v Cell Tech Products, Inc. Superior Court of California for the County of Tulare, Case No. 19777, Nov 2002.
5. Moran JP. Tentative decision, Teachers for Truth in Advertising v Cell Tech Products, Inc. Superior Court of California for the County of Tulare, Case No. 19777, Jan 14, 2003.
6. Moran JP. Decision. Teachers for Truth in Advertising v Cell Tech Products, Inc. Superior Court of California for the County of Tulare, Case No. 19777, Feb 20, 2003.
7. Cell Tech International. Form 10-K/A report to the Securities and Exchange Commission for the period ending June 30, 2003. Filed Aug 14, 2003.