Commercial Litigation Update

As the dietary supplement industry continues to draw attention from Congress, state attorneys general, and class action lawyers, now comes another state law trying to prohibit the sale of over-the-counter (“OTC”) dietary supplements that target weight loss and muscle building to minors – this time, in New Jersey.

On October 28, 2024, by a majority vote of 56 to 17, with four abstentions, the New Jersey General Assembly passed Assembly Bill No. 1848, which, if it goes into effect, will prohibit the sale or delivery of OTC diet pills, weight loss, and muscle building supplements to minors, unless the minor is accompanied by a parent or guardian. Bill No 1848 is an exemplar of efforts intended to combat the misuse and abuse of these products and the potential causal relationship between these dietary supplements and eating disorders. Violators, including employees of retail establishments, may face a civil penalty of not more than $750.

The legislation sets forth that:

“no person, firm, corporation, partnership, association, limited liability company, or other entity shall sell, offer to sell, or offer for promotional purposes, either directly or indirectly by an agent or an employee, any over-the-counter diet pull or dietary supplement for weight loss or muscle building to a minor under 18 years of age, unless the minor is accompanied by a parent or guardian.”

Last week, blockchain analysis firm, Chainalysis, held its annual conference, Links 2023, in New York City, where private and public sector leaders met to discuss emerging issues impacting the blockchain, cryptocurrency, and digital asset space. The conference featured presentations from notable public and private sector leaders, including government regulators, enforcement bodies who investigate and assist in prosecuting virtual asset fraud, and executives from financial institutions.

With the release of the decision in Dobbs v. Jackson, questions regarding enforcement activity in states that restrict or ban abortion by statute have been raised and have remained mostly hypothetical. The frequency and scope of future enforcement activity remains unknown. Given the variety of laws now in effect in restricted and ban states, and that enforcement of such laws is subject to state prosecutorial discretion as well as the prevailing political climate, enforcement initiatives are expected to vary by state.

On June 24, 2022, the U.S. Supreme Court released its opinion in Dobbs v. Jackson Women’s Health Organization, overturning Roe v. Wade—the 1973 landmark ruling that established the constitutional right to abortion. Now, companies that operate in states where abortions are banned or restricted are facing a quagmire of laws and risks regarding enforcement. Additionally, the risk landscape is not static, but rather in flux, as the federal government (agencies such as the U.S. Department of Justice and the U.S. Department of Health and Human Services) and a myriad of states introduce new legislation and issue guidance on a near-daily basis.

Now that the Supreme Court of the United States has declared that authority to regulate abortion rests with the states, organizations operating across state lines face new and some unprecedented challenges created by the civil and criminal legal issues arising from risks of enforcement in any state where abortion is or will be banned (a “ban state”). Health care providers, employers, and other organizations with any nexus to such states will need to conduct careful analyses and may have to accept an unknown level of enforcement risk while various jurisdictions respond to their newfound power and determine if and how to wield it. The risks may extend to providers who deliver abortions, patients seeking abortions, companies who support their employees traveling to non-ban states to receive abortions, and their executives. The outer parameters of who is subject to enforcement risk are presently unknown but are likely to vary from jurisdiction to jurisdiction.

Imagine you’re a longtime employee of a company that operates in a highly regulated industry. Your employment has seen its ups and downs throughout the years, and you have witnessed many transitions: new policies and procedures implemented, new leadership appointed, and new rules and regulations with which your company must comply to remain in lawful standing with regulators. Occasionally, you’ve observed activity that might be questionable but you never thought much about it. That is, until you’re called into a meeting with your company’s lawyers who inform you that “the U.S. Attorney’s Office wants to meet with you.” What do you do next?