In re: Elysium Health-Chromadex Litigation

CourtDistrict Court, S.D. New York
DecidedJanuary 19, 2021
Docket1:17-cv-07394
StatusUnknown

This text of In re: Elysium Health-Chromadex Litigation (In re: Elysium Health-Chromadex Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Elysium Health-Chromadex Litigation, (S.D.N.Y. 2021).

Opinion

USDC SDNY DOCUMENT ELECTRONICALLY FILED UNITED STATES DISTRICT COURT | DOC #: SOUTHERN DISTRICT OF NEW YORK DATE FILED:_ 1/19/2021

IN RE ELYSIUM HEALTH-CHROMADEX LITIGATION : 17-cv-7394 (LJL) OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge: Defendant Elysium Health, Inc. (“Elysium” or “Defendant”) moves, pursuant to Fed. R. Civ. P. 15(d), to amend its counterclaims. Dkt. No. 166. This is a false advertising and unfair competition case between the supplier of a dietary ingredient and its former wholesaler and now competitor. The dispute concerns an ingredient called nicotinamide riboside (“NR”) that is supplied by Plaintiff ChromaDex, Inc. (“ChromaDex” or “Plaintiff’), which holds a patent for NR, and that is used for cellular metabolism, mitochondria, and cellular repair. It is an ingredient in dietary supplements and other products. Elysium is a dietary supplement start-up that was ChromaDex’s wholesaler from 2014 to mid-2016. Elysium has manufactured a product that includes NR (“Basis”) since 2015. After the decline of the supplier relationship between Elysium and ChromaDex in 2016, ChromaDex entered the market with a product called Tru Niagen, which also contains NR. The two companies are now direct competitors. The current relationship between the two companies, to put it mildly, is not friendly. ChromaDex and Elysium are parties to a separate lawsuit pending in the Central District of California, alleging breach of fiduciary duty, trade secret misappropriation, and breach of contract claims. This action was initiated on September 25, 2017 when Elysium sued

ChromaDex for false advertising, trade libel, deceptive business practices and tortious interference with business relations for allegedly making a sham citizen petition with the United States Food & Drug Administration (“FDA”). ChromaDex followed suit on October 25, 2017 by suing Elysium for false advertising. The two cases were consolidated on November 3, 2017. Dkt. No. 27. On January 3, 2019, Chief Judge McMahon granted summary judgment as to

Elysium’s sham petition claims based on the Noerr-Pennington doctrine. Dkt. Nos. 63, 69. Since then, the case has followed a torturous path, with each party amending its pleadings and the other immediately doing the same, seemingly oblivious to any objective of bringing the case to conclusion or of the imperative of the Federal Rules of Civil Procedure to “secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1. ChromaDex filed an amended complaint on March 27, 2019. Dkt. No. 80. Elysium then filed an amended answer and counterclaims on April 10, 2019. Dkt. No. 82. On July 1, 2019, Elysium was granted leave to file a second amended counterclaim, without opposition. Dkt. Nos. 88, 89. On February 9, 2020, ChromaDex filed a motion to file a second amended complaint. Dkt. No.

117. On February 10, 2020, not to be outdone, Elysium filed a motion for leave to file a third amended counterclaim. Dkt. No. 121. On February 25, 2020, each party consented to the other’s amendments, Dkt. No. 136, and so, on that same date, this Court granted ChromaDex leave to file its second amended complaint and Elysium leave to file its third amended counterclaim. Dkt. Nos. 137, 138. Discovery was initially stayed until February 8, 2019 due to the extensive motion practice. A case management plan was entered on March 21, 2019, after motion practice, providing for all discovery to be completed by December 20, 2019. Dkt. No. 77. The deadlines have since been extended on several occasions: • On August 22, 2019, the Court extended the discovery schedule by six months, to provide that all discovery would be completed by June 20, 2020. Dkt. No. 92. In that order, Judge McMahon noted that the case was already two years old. Id. • On October 15, 2019, Judge McMahon entered an order granting an extension of six months due to the California trial, but warned that she would not grant any further extensions of discovery. Dkt. No. 95. • On February 14, 2020, Elysium requested a four-month extension of the deadlines for discovery. At the time, fact discovery was to be completed by April 11, 2020, and all discovery was to be completed by June 20, 2020. In the letter requesting an extension, Elysium noted, in part, that it was represented by new counsel and that new counsel had discovered that prior counsel had engaged in minimal discovery. Dkt. No. 129.1 That same day, the Court denied the request for an extension. Dkt. No. 130. The COVID-19 pandemic intervened, and the parties renewed their requests for extensions of discovery. Specifically: • On March 20, 2020, the parties renewed their request for a four-month extension for the completion of fact discovery by August 11, 2020 and all discovery by October 20, 2020. Dkt. No. 146. The Court granted that request. Dkt. No. 148. • On June 23, 2020, the parties requested yet another extension of discovery, this time for the completion of fact discovery to December 11, 2020 and the completion of all discovery to March 17, 2021. Dkt. No. 149. The Court granted that motion only in part and extended the deadlines for fact discovery to October 11, 2020 and all discovery to December 20, 2020. Dkt. No. 150. • In August 2020, a discovery dispute arose with respect to Elysium’s document production. Dkt. Nos. 152, 155, 157. Elysium claimed that it could not produce certain of the requested records because its offices were closed due to the pandemic. Dkt. No. 155. As a result, and after a conference, the Court agreed to yet another extension: all fact discovery was to be completed by December 11, 2020 and all discovery was to be completed by February 22, 2021. Dkt. Nos. 159, 160. • Finally, on November 13, 2020, the parties jointly requested yet another extension to address the production of Elysium records which had been inaccessible as a result of the pandemic. Dkt. No. 164. The parties requested that the fact deposition deadline be adjourned by an additional 60 days, which they represented would be sufficient to resolve any outstanding document discovery issues and to take depositions. Id. The Court agreed to extend the deadline for fact discovery and fact depositions to February 9, 2021 and all discovery to April 23, 2021. Dkt. No. 165. The Court

1 Elysium also noted that the parties had both filed motions for leave to amend their pleadings which would require additional discovery. Id. required the parties to submit the joint pretrial order by June 22, 2021 and to be ready for trial on 48 hours’ notice beginning on August 9, 2021. Id. As the case currently stands, in its Second Amended Complaint, ChromaDex asserts causes of action for false advertising and unfair competition under the Lanham Act and deceptive trade practices under New York General Business Law § 349. As alleged by ChromaDex, Elysium falsely advertises to consumers, inter alia, that (i) it was the “first” to market a supplement proven to raise NAD+ levels, which are critical for healthy cellular metabolism, mitochondria, and cellular repair, implying that it (and not ChromaDex) is the pioneer in this space; (ii) it was involved in the 25+ years of research and development surrounding NR (when, ChromaDex claims, Elysium was not founded until 2014); (iii) FDA approves or endorses Basis (when FDA does not); (iv) Basis is backed by clinical studies (even though the studies were

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In re: Elysium Health-Chromadex Litigation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-elysium-health-chromadex-litigation-nysd-2021.