Nutrition Distribution, LLC v. Southern SARMs, Inc.

Filed 1/31/18 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN NUTRITION DISTRIBUTION, B280983 LLC, (Los Angeles County Plaintiff and Respondent, Super. Ct. No. BC616482) v. SOUTHERN SARMS, INC., Defendant and Appellant. APPEAL from an order of the Superior Court of Los Angeles Court, Michael L. Stern, Judge. Affirmed. Lewis Brisbois Bisgaard & Smith, Arezoo Jamshidi, Catherine M. Asuncion, Daniel C. DeCarlo, Josephine Brosas and Griffen J. Thorne, for Defendant and Appellant. Tauler Smith, Robert Tauler and Lisa M. Zepeda, for Plaintiff and Respondent. _______________________ 1 Code of Civil Procedure section 128.5 authorizes a trial court to award sanctions for bad faith actions or tactics that are frivolous or solely intended to cause delay. Pursuant to former subdivision (f) of section 128.5, effective from January 1, 2015 until amended by urgency legislation enacted August 7, 2017 (former subdivision (f)), any such sanctions had to be imposed “consistently with the standards, conditions, and procedures set forth in subdivisions (c),(d), and (h) of Section 128.7.” Ruling that former subdivision (f) incorporated the 21-day safe harbor notice-and-waiting period of section 128.7, subdivision (c)(1), the trial court denied Southern SARMs Inc.’s postjudgment motion for sanctions against Nutrition Distribution, LLC because Southern SARMs had failed to give Nutrition Distribution the required notice. We affirm. As reflected in the plain language and legislative history of former subdivision (f), and confirmed by the August 2017 amendments to that provision, a 21-day waiting period applies to a motion for sanctions under section 128.5 that, as here, is directed to allegedly improper actions or tactics that can be withdrawn or appropriately corrected. FACTUAL AND PROCEDURAL BACKGROUND 1. Nutrition Distribution’s Pleadings In a complaint filed in April 2016 Nutrition Distribution, LLC, dba Athletic Xtreme, a manufacturer and marketer of nutritional supplements, sued Southern SARMs, a competing nutritional supplement company, for unfair competition (Bus. & 1 Statutory references are to this code unless otherwise stated. 2 Prof. Code, § 17200 et seq.) and false advertising (Bus. & Prof. Code, § 17500 et seq.). Nutrition Distribution alleged Southern SARMs had misbranded and unlawfully marketed its product (MK-2866) Ostarine, which contained as its active ingredient a selective androgen receptor modulator (SARM). According to Nutrition Distribution’s pleading, “SARMs, like Defendant’s Ostarine Product, are synthetic drugs with similar effects to illegal anabolic steroids.” Specifically, Nutrition Distribution alleged, although Southern SARMs labeled its product as not intended to treat, cure or diagnose any condition or disease and not for human consumption, it simultaneously marketed the product on its website and otherwise as a new miracle dietary supplement to bodybuilders and other competitive athletes to enhance their physiques, promising, for example, lean mass increase and accelerated fat loss in an easy-to-dose oral form. According to Nutrition Distribution, Southern SARMs also misrepresented that its Ostarine product affords similar benefits to testosterone and other anabolic steroids without the negative side effects. As remedies for these alleged violations of the unfair competition and false advertising laws, Nutrition Distribution sought compensatory damages, ...

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