JARROW FORMULAS, INC. V. NUTRITION NOW, INC. 304 F.3d 829 (9th Cir. 2002) CASE BRIEF

JARROW FORMULAS, INC. V. NUTRITION NOW, INC.

304 F.3d 829 (9th Cir. 2002)

NATURE OF THE CASE: Jarrow (P) nutritional supplement manufacturer sued Nutrition (D) for false and misleading advertising under 43(a)(1)(B) of the Lanham Act, codified at 15 U.S.C.S. 1125(a)(1)(B), and state law. The U.S. District Court for the Central District of California granted summary judgment to D holding that the suit was barred by laches and also denied a motion for continuance of summary judgment pending additional discovery.

FACTS: Since 1985, D distributes PB8, a probiotic nutritional supplement designed to aid digestion. D claims PB8 contains fourteen billion 'good' bacteria per capsule, contains eight different types of bacteria, and does not require refrigeration. These claims are prominently displayed on PB8's product label. P offers a competing probiotic supplement. In 1993, P and D participated in an industry trade show. At the show P vigorously complained to D that their claims regarding PB8 were false and misleading. A few months later, P filed a complaint with the Grievance Committee of the National Nutritional Foods Association. P urged the Committee to take appropriate action, including releasing a statement declaring the claims false and misleading. Ultimately, the Committee took no action. P sent a letter to its customers urging them to avoid PB8. The letter explained that PB8 'has been tested, and each test has disclosed a dead, worthless product making ridiculous claims. It is a waste of money and cheats the consumer.' P sent a letter to D stating intentions of putting an absolute and total end to the false claims. D continued to make its claims about PB8. P waited until August 2000 to file suit. In its suit, P asserts that D's claims are false and misleading in violation of 43(a)(1)(B) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B). P also sued under California law for unfair competition, Cal. Bus. & Prof. Code 17200, and for false advertising, id. 17500. D moved for summary judgment on the grounds that the statutes of limitation and laches bar P's claims. The district court held that P's action was barred by laches, and dismissed the suit. The court declined to address the statutes of limitation question. On appeal P claims that (1) it did not exercise unreasonable delay in filing suit, (2) Nutrition Now would not suffer prejudice if the suit were to proceed, (3) laches, even if generally applicable, does not bar its claim for prospective injunctive relief, (4) the public interest would not be served by barring suit, (5) Nutrition Now is precluded by the unclean hands doctrine from asserting laches, and (6) the district court erred in failing to continue summary judgment pending additional discovery.

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LEGAL ANALYSIS:

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