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Former Big Leaguer Turned Supplement Seller Heeds Judge Alsup’s Advice—Dismiss It

August 24, 2020 Patrick Hammon

Neiman Nix, a former pitcher in the Cincinnati Reds organization, founded DNA Sports Performance Lab, Inc., soon after his baseball career was cut short due to injuries.  Among other products, Nix through DNA Sports sells health supplements that contain IGF-1—a substance banned by Major League Baseball in both its natural and synthetic form. 

In 2013, Major League Baseball launched a widespread investigation into the sale of performance enhancing drugs to its players, which included a probe into so-called “anti-aging” clinics in Florida, like DNA Sports.  According to DNA Sports and Nix, the outcome of those efforts cast an irreparable shadow of doubt over its operations, causing it substantial harm and creating an “impression of guilt” in the court of public opinion. 

In response to the perceived harm caused by the League’s actions, Nix launched a multifaceted, multistate campaign of litigation against Major League Baseball and various related entities, like its Players Union, that has morphed over time and that eventually led to Nix’s most recent suit in the Northern District of California, filed in January 2020.

Nix’s latest lawsuit alleged that Major League Baseball and its related entities engaged in false advertising and unfair competition by permitting the Players Union to endorse—and license its trademark in conjunction with—various products which include IGF-1, such as “Klean Athlete” products, Gatorade “Recover” whey protein bars, Muscle Milk protein shakes, and Eyepromise nutritional supplements.   According to Nix and DNA Sports, the Union’s endorsement of these products implied that major league ballplayers use these products—even though they are banned under the league’s drug policy as they contain IGF-1.

The Players Union moved for dismissal of, and sanctions in connection with, Nix’s complaint.  In a scathing order issued on Saturday, August 1, Judge Alsup agreed with the Union’s arguments about the unsalvageable defects in Nix’s complaint and dismissed each of Nix’s causes of action. 

In connection with Nix’s federal false advertising claim, which was premised on a 2016 press release issued by Klean Athlete (not MLB), the court dismissed the claim for three reasons.

  • First, the court reasoned that Nix sued the wrong defendant, as it was a third party manufacturer, not Major League Baseball, that made the allegedly tortious statements in the press release.  Judge Alsup acknowledged that the Ninth Circuit has not yet definitively recognized—or rejected—“contributory liability” in false advertising claims, but that even if such liability were permitted, the claim would still fail since there were no allegations that the Union contributed to the representations in the release by knowingly inducing or causing Klean Athlete’s conduct, let alone “materially participating in it.” 
     
  • Second, Judge Alsup also found Nix’s claim defective because it failed adequately to allege economic or reputational harm.  While the complaint generally asserted DNA Sports suffered $1M in damages, it failed to allege, for example, a clear diversion of sales from it to Klean Athlete or a loss of any contracts or business whatsoever after the publication of the press release. 
     
  • Third, the court concluded that Nix’s claim was time-barred.  Judge Alsup explained, since the Lanham Act does not contain a statute of limitations, the closest analogic in state law governs.  In this case, that analog was fraud—a tort claim that has a three-year statute.  Since the press release was issued in 2016, Nix’s claim, which was not brought until 2020, was untimely. 

In connection with Nix’s state false advertising claim, which was premised on the same press release, the court rejected the claim for virtually the same reasons.  Here again, for example, Judge Alsup observed that Nix’s failure to allege any facts showing that the Union participated in the alleged false advertising was fatal to the claim. 

In connection with Nix’s unfair competition claim, Judge Alsup dismissed this claim for two reasons. 

  • First, since the UCL claim was predicated on the defective false advertising claims, it was necessarily inadequately pleaded. 
     
  • Second, even if the predicates of the claim had been properly alleged, the court observed that the claim should still be dismissed because the remedies requested by Nix were not available under the UCL—which only allows for restitution or injunctive relief.  Judge Alsup observed that Nix could not seek restitution since his company never conducted business with any of the defendants in the action.  Furthermore, injunctive relief was also unavailable since the Union’s licensing agreement with Klean Athlete ended in 2017.  In other words, there was nothing left to enjoin.  The claim, therefore, could not stand.

Judge Alsup concluded his order by deferring his ruling on the request for sanctions.  While Alsup granted Nix and DNA Sport leave to amend, he suggested that “their better course might be to walk away.”  The court afforded them until August 20 to file their amended pleading.  However, on the first business day after Judge Alsup’s order, Nix and DNA Sport filed their Notice of Voluntary Dismissal, bringing yet another battle in Nix’s ongoing litigation war with Major League Baseball to an end.