‘Vague’ NY law looms for The Vitamin Shoppe, other supplement retailers

Thirteen days is how long distributors, manufacturers and retailers of dietary supplement products have to get ready for a New York law that takes effect on April 22.

That is unless either of two industry trade associations succeed in convincing a U.S. District Court to grant a preliminary injunction blocking implementation of the law.

New York Assembly Bill A5610 restricts minors’ access to weight loss and muscle-building supplements.

A telephone conference is scheduled for tomorrow (April 10) in the Southern District of New York on the Council for Responsible Nutrition’s (CRN) request for a preliminary injunction, according to court documents. U.S. District Judge Andrew Carter on April 4 denied CRN’s request for a temporary restraining order and ordered that the New York attorney general show cause why he should not enjoin the state AG from enforcing the law (New York Assembly Bill A5610) during the pendency of the lawsuit.

“Right now, this law is wide open to interpretation and incredibly ambiguous in terms of how it gets enforced,” said Steve Mister, president and CEO of CRN, in an email. “This vagueness will create uncertainty in the retail marketplace, which will ultimately result in retailers deciding not to sell many dietary supplement products, as they will err on the side of caution in an attempt to not break this ill-defined law. In the end, consumers will have less products to choose from when they go to the pharmacy, grocery store or when placing orders online.”

Related:NPA to seek injunction against NY law related to weight loss supplements

In the Eastern District of New York, the Natural Products Association (NPA) is awaiting word from the court on a letter it filed and a response letter from the state AG regarding NPA’s plans to request a preliminary injunction.

In the case filed in March by CRN, the New York AG has already said it wants to file a motion to dismiss the complaint. Linda Fang, special litigation counsel for the state AG, argued in a letter to Judge Carter that CRN lacks standing.

She also rejected CRN’s legal claims that the New York statute implicates free speech rights or is unconstitutionally vague. Fang further argued the law is not preempted by federal law and constitutes “a proper exercise of the state’s police powers.”

With the law set to take effect in about two weeks, manufacturers and retailers are gearing up to comply with its requirements. Several industry sources — including those associated with the litigation — argued compliance is a tall task considering the unanswered questions about the scope of the law.

Related:CRN files emergency plea to block NY law

“We’re rule followers. At the same time, how do you follow a rule that is this vague?” asked Dan Fabricant, president and CEO of NPA.

Lee Wright is CEO of The Vitamin Shoppe, an NPA member and among the largest brick-and-mortar retailers of supplements in the U.S.

“The Vitamin Shoppe is taking necessary steps to prepare for the scheduled implementation of the New York State law, including classifying which products would fall under the new regulations, revising our shipping policies for online orders that now need age verification, and educating our Health Enthusiast store associates on the proper age identification procedures for customers who are minors,” Wright said in an email to Natural Products Insider. “The Vitamin Shoppe is committed to providing our customers with the highest quality health and wellness products, according to the laws and regulations of the communities we serve.”

Steven Shapiro, an attorney in New York with Rivkin Radler LLP, who advises supplement companies, said it’s unclear the extent to which the New York AG will enforce the law later this month and beyond.

“The law is so broad we have no idea how it’s going to be enforced,” he said in an interview. “Will the attorney general send people into stores to see if they’re violating the law? Will the attorney general order products?”

The bill grants the state AG authority to request an injunction when there is a violation of the law, and a court can impose a fine of up to $500 if it finds there has been a violation.

“If a court issues an injunction, and there’s subsequent violations, what exactly is the penalty for violating the subsequent injunction?” Shapiro asked. “Is it limited to another $500? That doesn’t seem to be clear in the law.”

New Jersey-based industry lawyer Theodora McCormick of Epstein, Becker & Green P.C. said the retailers she has talked to are closely evaluating their products to determine whether they are marketed for weight loss and muscle building. In addition, retailers are requesting indemnification from their suppliers for products that inadvertently violate the law, she said.

“They’re also working on procedures for verifying the age of individuals purchasing covered products,” McCormick added in an interview. “For brick-and-mortar stores, that’s probably not terribly complicated. It involves more training and that sort of thing, but it’s more involved for sales that are delivered or purchases online. There’s a process in place for selling to consumers who are 21 or older, but not for 18 so that’s something that’s going to have to be developed."

McCormick and Shapiro said retailers could benefit if the New York AG issued guidance to clarify the scope of products covered under the law. The state AG hasn’t responded to previous requests for comment concerning the litigation or potential guidance.

The state AG should issue guidance and “it’s something that I think either NPA or CRN can press for in the suits that they’ve filed,” McCormick said. While guidance wouldn’t resolve the entire litigation, McCormick noted what she found “really compelling about both lawsuits is just how vague the statute is and how difficult it is for the industry to comply with it.”

Kevin Bell is an attorney with Arnall Golden Gregory LLP and counsel for NPA in its lawsuit in New York. In an interview last week, he said the state AG hadn’t raised the issue of guidance or expressed interest in maintaining the status quo until the lawsuit is worked out.

Based on his reading of the state law, Bell said “it would be almost impossible to advise clients” regarding what products are covered and not covered by the bill.

“There’s a nucleus of products potentially that are ‘in’ but the things around the edges, the edge is too thick,” he explained.

“There’s definitely a desire to say, ‘OK, what do we need to do?’” Fabricant acknowledged in a joint interview with Bell, when asked what companies are doing to prepare to comply with the law. “What do we need to change with our business practices? At the same time, it’s somewhat of an impossible task right now. It’s like untying the Gordian knot. We don’t know what’s in. We don’t know what’s out.”