Jiaherb v. MTC Industries — Unproven Adulteration Defeats Lanham Act Claim

Background

Jiaherb bought more than 17,000 kilograms of saw palmetto oil from MTC Industries for resale as a dietary-supplement ingredient. The parties’ purchase orders described the product as “Saw Palmetto Oil | Fatty Acids 85% GC,” referring to gas chromatography testing. Certificates supplied with the batches also reported compliance with the applicable United States Pharmacopeia standard.

Both companies tested the batches, and the oil passed the specified gas-chromatography tests. Months later, one of Jiaherb’s customers commissioned nuclear magnetic resonance testing and reported possible adulteration with coconut oil. Jiaherb sought to return roughly $385,000 of remaining product. When MTC refused, Jiaherb sued, asserting false advertising under the Lanham Act along with contract and state-law claims.

After a four-day bench trial, the District of New Jersey found that the oil met the contractual quality standard and that Jiaherb had not proved adulteration. Jiaherb appealed, challenging the contract interpretation, expert testimony, evidentiary rulings, and the resulting rejection of its Lanham Act claim.

The Court’s Holding

The Third Circuit affirmed in a nonprecedential opinion. Although the phrase used in the purchase orders was ambiguous, the district court had evidentiary support for reading it to require at least 85% fatty acids as measured by gas chromatography. Jiaherb’s own witnesses acknowledged that this was the testing method stated in the orders, and reading the contract to require additional forms of purity testing would have stripped the “GC” language of practical meaning.

The panel also upheld the treatment of the competing experts. MTC’s expert was qualified to address nuclear magnetic resonance testing even though his specialty was not botanical adulteration. He could rebut Jiaherb’s proof by explaining why its expert’s visual comparison of spectra was unreliable; MTC did not have to conduct a separate affirmative test because Jiaherb carried the burden of proof. The district court likewise did not err by failing to admit a Eurofins report that Jiaherb never offered into evidence.

Because the trial court permissibly credited MTC’s expert and found that Jiaherb failed to prove adulteration, the factual premise of the Lanham Act false-advertising claim disappeared. Jiaherb identified no other allegedly false statement, so the panel affirmed judgment for MTC on that claim as well as the contract and implied-covenant claims.

Key Takeaways

• A product specification that names a particular testing method may be interpreted as making that method part of the bargain, even when another test later suggests a different quality problem.
• A false-advertising plaintiff must prove that the challenged product claim is actually false; suspicion raised by alternative testing is not enough when the trial court reasonably rejects that proof.
• A defense expert may defeat the plaintiff’s proof by exposing methodological flaws without performing an independent test of the product.
• Evidence not formally offered at trial cannot become a basis for reversal simply because similar evidence from the opposing party was admitted.

Why It Matters

The decision shows how product specifications and laboratory methods can control both contract and Lanham Act outcomes. Businesses buying technical ingredients should state expressly whether a specification is only a minimum test result or also promises broader purity that may be measured through other methods. Suppliers should likewise align certificates of analysis, purchase orders, and testing protocols so that the documents do not imply inconsistent standards.

For false-advertising cases built on scientific testing, the ruling is also a practical reminder that the claim can rise or fall with the quality and admissibility of expert proof. A court need not choose the newest or most sophisticated method merely because it produces a concerning result; the proponent still must establish that the method fits the product, that the underlying data are reliable, and that the result proves the advertised statement false.