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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]
- "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.]
- "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.]
- "More physical energy" [There
is no scientific evidence that algae pills boost physical stamina.]
- "Omega Sun is excellent for . . . Children or adults
who may benefit from better concentration." [The
algae pills have no medicinal benefits.]
- "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.]
- "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.]
- "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.]
- "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.]
- 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.]
- "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.]
- "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.]
- "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.]
- "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.]
- "Super Blue Green Algae is an excellent source of omega-3
fatty acids." [At recommended levels,
the product is not even a good source.]
- "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.]
- Super Blue Green Algae gives you "the ability to train
harder and longer." [There is no
scientific evidence that algae pills boost physical stamina.]
- "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.]
- Micronutrients are "less available in our diet"
due to this shift. [The American food
supply is not nutrient-deficient.]
- 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.]
- 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.]
- "Super Blue Green Algae is an excellent source of omega-3
fatty acids." [At recommended levels,
the product is not even a good source.]
- "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.]
- "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.]
- "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.]
- "Feeds and enhances brain activity." [Algae
pills have no medicinal or health benefit for humans.]
- Cleans the intestine. [Algae pills
have no medicinal or health benefit for humans.]
- Improves absorption of nutrients. [At
recommended levels, the product is not even a good source of
nutrients.]
- Eliminates digestive disturbances. [Algae
pills have no medicinal or health benefit for humans.]
- Reverses the aging process [customer testimonial]. [Algae pills have no medicinal or health benefit
for humans.]
- 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
- The Miracle of Super Blue Green Algae (booklet). Klamath
Lake, Oregon: Cell Tech, May 1994.
- Gilroy GJ and others. Assessing
potential health risks from microcystin toxins in blue-green
algae dietary supplements. Environmental Health Perspectives
108:435-439, 2000.
- 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.
- 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.
- 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.
- 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.
- 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.
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This article was revised on August
18, 2003.