Latest / Barking Mad Podcast / The Billion-Dollar Deception of DCM: Inside KetoNatural’s Class Action Lawsuit

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The Billion-Dollar Deception of DCM: Inside KetoNatural’s Class Action Lawsuit · Barking Mad Podcast

0:20
Jordan Tyler: On February 6th, 2024, Keto Natural Pet Foods filed
0:24
what it described as the largest lawsuit in the history of the U.
0:28
S.
0:28
pet food industry.
0:30
The suit alleges that Hills Pet Nutrition and a cluster of affiliates
0:33
fabricated the high profile controversy over dilated cardiomyopathy or DCM
0:39
in an effort to get pet parents to abandon certain dog foods and switch to
0:44
more mainstream or traditional diets.
0:47
These terms in air quotes as they're arbitrary at best and lack any kind of
0:51
true scientific or regulatory definitions.
0:55
In the initial complaint of the lawsuit, Keto Natural Pet Food
0:58
states, In the four years immediately preceding the controversy, so 2013
1:03
to 2017, Hill's annual revenues grew by a total of only about 1%.
1:09
But, in the five years since the controversy began, so 2018 to 2023, the
1:15
company's revenues nearly doubled to 4.
1:18
2 billion.
1:20
This lawsuit is the culmination of a seismic shift in the industry, stemming
1:24
from unsubstantiated science from a group of veterinarians and a premature public
1:29
announcement by the FDA that led the grain free pet food industry into disaster.
1:35
And some even speculate the ordeal gave rise to large, multinational
1:39
kibble brands who were losing market share to some of the more emerging
1:44
pet food formulation philosophies.
1:46
But how did we get to this point?
1:49
In today's episode, we explore the rise and fall of grain free dog food,
1:53
the pronounced impacts felt across the pet food industry, from farmers and
1:58
brands all the way through retailers and consumers, And we'll share how one legally
2:03
savvy pet food entrepreneur is seeking justice for his brand and the many others
2:08
harmed as a result of the DCM debacle.
2:12
Welcome to Barking Mad, a podcast by BSM Partners.
2:17
I'm your host, Jordan Tyler.
2:23
Now, before we get into it, let's quickly recap the DCM controversy.
2:28
So, in 2018, a group of veterinarians voiced concerns about increased
2:32
incidences of DCM in dogs.
2:35
In many of these cases, grain free dog foods were
2:38
implicated as a potential cause.
2:40
Even though the industry lacked any data to prove that grain free
2:43
diets were particularly good or bad.
2:47
Now, these veterinarians reported what they saw to the FDA, who then called
2:51
on the public, essentially saying, if you have a dog with DCM that's eaten
2:56
grain free dog food, let us know.
2:59
Unsurprisingly, This call was answered with widespread concern and
3:03
panic and led to the FDA eventually publicly naming 16 grain free dog
3:08
food brands linked to cases submitted by veterinarians and pet parents.
3:13
And ultimately, this resulted in the demonization of pulse ingredients
3:17
like peas, lentils, and legumes in pet food, and the downfall
3:22
of grain free as we knew it.
3:25
Now, obviously, there is much more nuance to this story, and we'll get
3:29
to that throughout this episode.
3:31
But to really paint this picture and all the messy, mind boggling
3:35
misconceptions that contributed to it, let's start at the very beginning,
3:40
the rise of grain free pet foods.
3:43
To understand the trends that drove such widespread acceptance of these
3:47
formulas, we spoke with BSM Partners consumer strategy expert, Michael
3:52
Johnson, who details the interesting inclinations among pet food shoppers
3:57
and veterinarians when it came to grain free in the early 21st century.
4:02
Now, to be clear, these diets were seen by many as a beacon of health and wellness
4:09
before the FDA's announcement in 2018.
4:12
So let's hear from him about how these diets went from
4:15
shining examples to scapegoats.
4:19
Michael Johnson: So the story of pet products in this country
4:21
has always been kind of onwards and upwards in terms of quality.
4:25
So in a very broad sense, it was just the right time for this kind of food.
4:30
Specifically, however, there were a number of factors that set
4:33
the table for grain free growth.
4:36
Veterinarians, for one, often recommended grain free foods
4:39
for pets with grain allergies.
4:42
And grain free also aligned with human diet trends of the day.
4:45
Things like low carb, Atkins, gluten free, so on and so forth.
4:50
Contemporary pet product marketing was starting to lean into trends
4:53
like no corn, no wheat, no soy.
4:55
And ancestral diets, these high protein and low or no grain formulations, made
5:01
grain free foods seem more natural and certainly more instinctive.
5:05
On top of that, grain free foods were positioned as very premium products,
5:09
which gave them cachet and made them more desirable to consumers.
5:16
Jordan Tyler: We also spoke with Dr.
5:17
Katie Miller, BSM Partners, who was working in pet retail at the time of
5:23
the FDA's initial DCM announcement.
5:26
She recalls store shelves stocked nearly exclusively with grain free
5:31
options in the years leading up to 2018.
5:34
And this was largely due to consumer demand.
5:41
Dr. Katy Miller: Just like different people have different
5:43
nutritional requirements, so do dogs.
5:45
And so, some dogs just do better on a grain free food than they
5:50
did on a grain inclusive food.
5:51
So, it started to turn the tides when they kind of came out as an option because
5:58
there were dogs that, did do better if they had an intolerance to certain
6:03
ingredients or they had skin and coat issues or some GI issues really responded
6:09
well to being on a diet that didn't have grains in it and so the grain free foods
6:16
became that option to be able to still feed the kibble but be able to get some
6:21
of the Benefits that some pets saw in it.
6:25
Veterinarians were recommending grain free foods to treat a
6:30
lot of different problems.
6:32
Grain free became what consumers wanted.
6:35
So when you looked at the store.
6:39
The store looked like it supported grain free foods as being a healthier option
6:43
only because there were so many options to choose from because it had such
6:47
huge growth in demand by the customer.
6:50
That became a lot of what was on the shelf because grain inclusive
6:54
foods just wouldn't sell.
6:56
We had a large call for gluten free foods.
6:59
There's one breed of dogs that have a gluten sensitivity and the rest do
7:03
not, but people think that because they're gluten intolerant that their
7:07
dog might be gluten intolerant.
7:09
Jordan Tyler: This common misunderstanding highlights another point that
7:12
helped drive Grain Free to success.
7:15
which is a lack of research around not only grain free
7:18
diets, pet nutrition in general.
7:22
And this lack of research perpetuates a general lack of consumer
7:26
understanding when it comes to what's best for our furry friends to eat.
7:33
According to Dr.
7:34
Bradley Quest, principal of veterinary services at BSM Partners, when we don't
7:39
fully understand the cause of something, it's anybody's guess as to whether an
7:43
intervention, like changing the diet,
7:49
Dr. Bradley Quest: And then the other part of it is, uh, as folks come into,
7:52
to veterinary clinics and they have dogs who have, Or pets in general, dogs
7:57
and cats who have different types of allergies, whether it's environmental
8:02
allergies or actually true food allergies.
8:04
Veterinarians are looking for etiologies or causes of these allergies, whether it's
8:09
the skin symptoms or it's GI symptoms.
8:12
And, you know, kind of building on what Katie said, some dogs actually responded,
8:17
um, to some of these diet changes.
8:20
Now, was it because they actually had a food allergy?
8:22
Or was something else changed?
8:24
When you change multiple things, you never know exactly what the, you know, thing
8:28
that caused the condition to improve.
8:31
So in a way, you know, veterinarians may have pushed this.
8:35
Jordan Tyler: So you can already see a bit of a whiplash happening here.
8:39
First vets thought grain free was all the rage, the pinnacle of health.
8:43
Later it became a scapegoat for a perceived issue that may not
8:48
have even been as sizable as it seemed in the first place.
8:51
Michael Johnson brings up another interesting early 21st century mishap
8:55
that could have tipped the scales toward grain free, and also illustrates why
9:00
pet nutrition is such an emotional topic for pet lovers like you and me.
9:05
Michael Johnson: In 2007, the pet food industry had a massive melamine recall.
9:10
I think over 150 brands were affected.
9:13
This crisis was due to contaminated wheat, gluten, and rice protein in pet foods.
9:18
And this led to acute kidney failure in likely thousands of dogs and cats,
9:22
and it made international headlines.
9:25
This incident was a tipping point in the pet industry, and it led to
9:29
enhanced safety and regulatory reforms.
9:31
But it also led horrified consumers to seek natural and grain free
9:35
food options because they seemed more safe, and it really propelled
9:40
this premium food format forward.
9:42
The average pet owner wants to do right for their pets, for the best
9:46
of their understanding at least, but they're not scientists, and
9:49
they're certainly not nutritionists.
9:51
Bad news travels very fast, and humans can be quite reactionary.
9:55
So when all of the sudden pet owners were starting to hear that grain free
9:59
foods may be causing heart issues in their pets, They did what people do, and
10:03
they began skifting purchase behaviors.
10:06
Jordan Tyler: This was evidenced in a pet food industry article that quoted work
10:10
by Nielsen IQ, a leading market research firm, which shared that grain free pet
10:15
food sales, which were burgeoning in the 2010s, began slowing toward the end of
10:22
2018 and continued to slide as each new DCM update was released through 2020.
10:28
Remember the 16 brands that were named in the investigation in the summer of 2019?
10:33
Well, those brands would go on to see double digit declines in grain free
10:38
sales by the end of that same year.
10:42
Interestingly, some of these brands also sold grain inclusive pet foods.
10:46
But their sales in that category also fell due to the reputational damage they'd
10:52
suffered as a result of the investigation.
10:55
This story was seen, played out in real time in pet retail stores as
11:00
explained by both Michael and Dr.
11:02
Katie Miller.
11:03
Dr. Katy Miller: We got a mad rush for anything that had grains in it, which
11:08
unfortunately at the time we were at a loss 'cause we didn't have very many grain
11:13
inclusive diets in the store because.
11:15
They just didn't sell before this and then after that it exploded and we
11:20
had to shift the whole store to have more grain inclusive, ancient grains,
11:25
grain friendly, all these different types of diets that just included
11:29
grain because that's what customers were coming in and looking for now.
11:34
Jordan Tyler: The DCM debacle didn't just impact the grain free category.
11:38
In fact, this argument was strategically adapted to demonize
11:42
an entire swath of the industry.
11:45
This comes back to the BEG piece I mentioned earlier.
11:48
So leading up to the FDA announcement, BEG or BEG diets, which stands for
11:54
Boutique Exotic and Grain Free, were defined as Quote, non traditional,
11:59
by the same group of veterinarians who started the dialogue around DCM.
12:04
And let's just take a minute to break that down.
12:08
If you think about the term traditional, that feels comfy, right?
12:12
That feels familiar.
12:14
Then you have a non traditional, which typically carries a
12:17
more negative connotation.
12:19
Maybe it feels a little less comfortable, a little more unfamiliar.
12:24
So you could see how calling boutique, exotic, and grain free diets non
12:28
traditional incites a sense of discomfort and even distrust, maybe
12:33
a disruption to the status quo.
12:36
And this can largely be seen as a fear mongering tactic that contributed to the
12:41
public's shift away from certain types of diets and, as a result, the smaller
12:46
and medium sized brands that make them.
12:49
Dr. Bradley Quest: I think this was one of the UC Davis studies
12:52
where they were using, I think, traditional and non traditional.
12:54
Literally, there was only three manufacturers that could
12:57
be in the traditional group.
12:58
It was Mars, Nestle, and Hills because it was all based on dollar sales.
13:02
And they were the only three companies that would meet that threshold.
13:04
And it can only be kibble.
13:06
So that's the only, the only diets.
13:09
Everything else was in non traditional, so that could be everything from,
13:14
uh, kibble diets that were, you know, made by, we'll say, medium sized
13:21
companies or even relatively large companies that weren't in the top three.
13:24
Everything down to raw diets that weren't even nutritionally complete and balanced.
13:29
It was such a poor study design that it actually invalidated any conclusions
13:34
that the authors made out of that study.
13:36
What is a boutique for the pet food company is anybody's guess.
13:40
What is an exotic pet food ingredient?
13:43
Same thing.
13:43
It's anybody's guess.
13:44
Those are not regulatory terms.
13:47
They mean nothing.
13:49
The G is in grain free.
13:50
I guess that's Relatively self explanatory, but to categorize diets based
13:55
on just made up nomenclature, I mean it, it's, it really has no place in research.
14:03
Jordan Tyler: In other words, the concept of BEG pet food is not only
14:07
unfounded, but those who coined it are misleading consumers down a path
14:13
that is based more in conjecture than it is in scientific evidence.
14:17
Now, 16 brands were called out in the FDA's announcement.
14:22
And these brands, along with others that fell within the BEG category,
14:27
however fictional it may be, quickly found themselves on the wrong side
14:31
of unsubstantiated messages that pulse inclusive pet foods could
14:35
lead to diet induced DCM in dogs.
14:38
The founder of one of these brands, Daniel Shuloff of Keto Natural Pet
14:42
Foods, saw the impact this had across the industry, as well as for his own company.
14:47
And instead of throwing in the towel or turning a blind eye, He doubled
14:51
down and dedicated countless hours to understanding what he believes are the
14:55
true motivations behind the DCM debacle.
14:59
Daniel's background as a lawyer has put him in a unique position
15:02
to champion brands and individuals negatively impacted by this ordeal.
15:07
He's doing this through a class action lawsuit.
15:10
filed against Hill's Pet Nutrition in February 2024, which alleges
15:14
that Hill's Pet Nutrition and a cluster of affiliates fabricated the
15:18
high profile controversy over DCM.
15:21
But long before Daniel became a pet food entrepreneur and activist, he
15:26
became, like many of us, a dedicated dog owner, a labor of love that
15:31
ultimately led him to write a book.
15:33
Dogs, dog food, and dogma, an in depth investigation of the science and business
15:40
of America's pet obesity epidemic.
15:43
It was in part due to his experience writing this book that he began looking
15:47
closer at the pet food industry and ultimately launched his own brand.
15:53
Daniel Schulof: So circa 2011, I was a practicing lawyer.
15:57
I worked at one of the biggest law firms in the world doing
16:00
intellectual property litigation.
16:02
I got my first dog, and I was kind of this like, single, yuppie,
16:06
city dweller, got my own dog.
16:10
He was a Rottweiler, and he was kind of like, quintessentially Rottweiler
16:14
y, in that he was intense, and big, strong dog, protective instincts.
16:21
Super high drive.
16:22
And, you know, one of the things that means is that he needed a good bout
16:27
of daily exercise every day in order to become a polite member of society.
16:31
Right.
16:31
As I was doing that, like I, big part of my career and I guess my
16:35
personal interests at that point involve like reading a lot of.
16:40
Scientific stuff, kind of like when you do intellectual property litigation,
16:44
you're often litigating cases against scientists or with your own scientists.
16:50
And I think between that and my own just personal background, I
16:53
went into the dog rearing process with like a scientific bent.
16:58
And so when it came time to figure out how do I exercise this dog
17:02
effectively, that's kind of where I went.
17:04
And I went to PubMed and I tried to understand.
17:06
Alright, what's the best way to exercise this guy?
17:08
What's the most efficient way?
17:09
Et cetera, et cetera.
17:11
And through the course of doing that, I learned about the problem of obesity
17:15
among pets in the Western world.
17:18
Here are the two facts that blew me away that I always remind folks of
17:22
when I talk about the scale of the companion animal obesity problem.
17:26
One, it's the norm, okay?
17:29
In the United States, there are more overweight or obese dogs and cats than
17:34
non overweight or obese dogs and cats.
17:37
You pick one, the next one you see at random, more likely to be fat than not.
17:41
So it's very common.
17:42
Second, it's really, really, really, really bad for them.
17:45
And the way I like to express it is when, you know, folks have, uh, studied
17:50
the impact of obesity on longevity in dogs to some degree, they've studied the
17:54
impact of smoking on the longevity of human beings a lot, well, it turns out.
17:59
that the impact of being moderately overweight on expected lifespan in
18:03
dogs and cats is significantly worse than the impact of smoking every day
18:09
from the time you're 18 years old until the time you die in human beings.
18:13
Your expected lifespan will go down by more if you're a fat dog than if
18:17
you are a lifelong smoker in people.
18:19
And it just kind of blew me away like how could this be that this
18:22
common thing everybody I love my dog everybody loves their dog.
18:25
And I just sort of started following the rabbit hole further, and I
18:31
became obsessed with it, honestly.
18:32
And I spent four years writing, working on a book.
18:35
I eventually quit my job working as a lawyer so I could
18:38
work on the book full time.
18:39
And it's my attempt to explain this weird thing.
18:42
How could so many dogs, cats in the country be fat?
18:45
The main thesis that I put forth in the book, that I believe in strongly, is that
18:49
carbohydrate is the fundamental cause, the fundamental underlying, single,
18:54
primary cause of obesity in dogs and cats.
18:57
You wouldn't have an obesity problem among dogs and cats if carbohydrate
19:01
wasn't the s Backbone of the US pet food industry and I make the case in
19:05
the book and so after that I founded a company once the book was out there.
19:09
You know, for people that read the book and felt persuaded or people that
19:12
came to the same conclusion in their own mind, thought I'd make products
19:16
for people that agreed with me, pick products that I wanted that weren't in
19:19
the market, which is to say very low carbohydrate kibble style products.
19:24
So I founded a company called keto natural pet foods in 2017.
19:28
We make the lowest carbohydrate, highest protein kibble products
19:31
for sale in the United States.
19:33
And we've been doing our thing since then.
19:36
And, um.
19:38
That's sort of my weird, how I transitioned from one
19:40
to the other, uh, story.
19:43
Jordan Tyler: The question of carbs in pet food is an interesting one, and requires
19:48
at least some level of understanding of how pet food, particularly dry
19:53
pet food or kibble, is formulated and manufactured, as highlighted by Dr.
19:58
Katie Miller.
19:59
Dr. Katy Miller: There was some misconception where people felt like grain
20:05
free foods equals carbohydrate free foods.
20:08
And so we were starting to say, well, dogs don't need carbohydrates.
20:12
They have no nutritional requirement for them, so they
20:15
don't need them in their food.
20:17
But you do need it to make a kibble.
20:19
And so, some people mistakenly felt like if dogs don't need
20:24
carbohydrates, they don't need grains.
20:26
Which is true, they don't need grains, but they also don't need
20:30
what we put in place of grains, which were legumes and peas and tubers,
20:35
like, they don't need those either.
20:37
But we do need them to make a kibble shape.
20:40
Unfortunately, some people misunderstood that as being, well, that's a low
20:44
carb diet is because it doesn't have grains and that isn't necessarily true.
20:50
Jordan Tyler: All that to say, it is absolutely critical that brands educate
20:54
their consumers about what they're really feeding and that this education
20:59
is backed up by scientific research, feeding trials, and efficacy data.
21:04
This is how we can avoid future mishaps, similar to what we saw with DCM.
21:10
Now, bringing things back to the lawsuit, Daniel was eager to discuss
21:14
the details, and while the suit is still in its early stages, there could be
21:18
significant impacts for the industry, depending on the court's ruling.
21:23
Daniel Schulof: One of the things that we're alleging and proving up
21:26
in the course of the litigation is that we've been damaged by misconduct
21:31
that relates to the TCM issue.
21:34
One of the issues in the litigation is, well, how much, how do you
21:37
quantify that damage, okay?
21:39
And our lawsuit is a class action lawsuit, which means, for the listeners
21:43
that don't already know, what we're essentially asking the court to do
21:46
is let us Keto natural pet foods, my company represent a bunch of other
21:51
companies that are in a similar position.
21:53
They've been damaged through the same legal theory.
21:57
And so the issue is not in the case is not only how much have
22:01
I been damaged, but how much has the industry broadly been damaged?
22:05
One thing I will say is that to this day, Keto natural gets customer
22:10
service tickets from consumers or.
22:13
Would be consumers that say essentially some version of the following.
22:18
I want your product.
22:19
It sounds great to me, or I am feeding your product to my dog already.
22:24
And it is going great, but I went to the veterinarian the other day and
22:28
they told me I shouldn't do it anymore.
22:31
Or I shouldn't try the product in the first instance because of DCM like we
22:35
get those kind of tickets today We got more of them in the period where DCM was
22:41
still in major media headlines when it was 2018 2019 we were a smaller company
22:46
then but the issue was a bigger Impacted a greater percentage of our customers,
22:51
but it's still a thing today One thing I can highlight is the market research for
22:56
Nielsen in the 2018, 2019, 2020 period had done a good deal of kind of industry wide
23:04
research on the impact of the DCM scandal.
23:07
And I know that in 2019 alone, estimated kind of took more than a billion dollars
23:13
out of the grain free industry, that the growth trajectory that the grain
23:16
free side of the industry was on.
23:18
Prior to DCM and then the trajectory that it was on after the FDA announced its
23:23
investigation that the delta there was more than a billion dollars and that's
23:27
like in, you know, the first 12 months.
23:30
So you're talking about a really, really major number.
23:34
It looks like the damages.
23:36
in our case are at least 2.
23:39
6 billion.
23:40
That's what we think at least the damage associated with the misconduct
23:45
in the lawsuit represents here.
23:46
So you're talking about a huge, huge number.
23:50
It's, it's difficult to overstate the impact of DCM.
23:54
And
23:59
Jordan Tyler: I'm assuming those numbers don't even touch the impacts that were
24:02
seen across the pulse industry, which had gotten a huge bump when grain
24:07
free diets started to gain popularity.
24:09
Like I remember when we talked to Tim McGreevey of the American Pulse
24:13
Association, and he described a huge devastating impact from DCM that rippled
24:20
all the way back to the family farmers who grew and tended the ingredients
24:24
that constitute grain free pet foods.
24:27
So peas, lentils, legumes, and the like.
24:30
And so when you're thinking about the overall impact of DCM, You really can't
24:34
isolate it to the pet food companies that were named in the FDA investigation.
24:39
You also have to consider other quote unquote BEG brands that
24:44
were affected, as well as farmers, ingredient manufacturers, retailers.
24:50
I mean, really, it's the whole value chain.
24:52
Daniel Schulof: You're exactly right.
24:53
The farmers that are responsible for creating the ingredients that are
24:57
used in the products, the associations of those ingredient suppliers, the
25:02
folks that are involved in making the products, selling the product.
25:05
In the United States, in the Western world, there's a, uh, you
25:09
know, a kind of specific channel.
25:11
That is devoted, disproportionately devotes its product line to the BG
25:16
type of product, which is an American pet specialty retailers, the mom
25:20
and pop pet stores that carry the better for your dog type of brands.
25:25
DCM became a thing.
25:27
It was a.
25:27
Big, big deal right when COVID was a big, big deal too.
25:31
And so a lot of those stores, I know folks personally that had to close their
25:37
stores because of the one, two punch of DCM and COVID there was a chain of
25:44
pet retailers called, uh, independent pet partners was one of the largest.
25:49
Pet specialty chains in the United States doing something like
25:53
200 million in revenue in 2022.
25:57
I believe they're one of the fastest growing pet specialty
26:00
retail chains in the United States.
26:02
2022 they filed for chapter 11.
26:04
Well, what happened?
26:05
You go look up the chapter 11 filings and they'll tell you why
26:08
they went bankrupt more than COVID.
26:10
The first thing they list is the DCM controversy drove one of the
26:14
largest pet specialty chains in the United States into bankruptcy.
26:19
This is as big an impact as it could be.
26:21
And then the last group that it's important to, anytime you're having this
26:24
conversation to mention is individual pet owners and the pets that they're
26:30
charged with, you know, taking care of that's part of the reason why the
26:35
veterinary community has so uncritically accepted the notion that BEG equals DCM.
26:43
At least in my experience, like, kind of like logic that I hear vets
26:47
articulate around why they say stay away from BEG is essentially like this.
26:54
Well, look, we don't know whether these things cause DCM yet.
26:57
The jury's still out.
26:59
We gotta figure that all out.
27:00
But it might, might not.
27:01
Some people say it does, some people say it doesn't.
27:03
But we know there's no real benefit.
27:05
So since there's no benefit, and there might be something
27:08
bad, therefore stay away.
27:11
And I think vets, a lot of vets honestly believe that, and I think
27:15
that it's a really, uh, not nuanced at all understanding of the reality.
27:22
Jordan Tyler: Coming back to the BEG piece, these brands were particularly
27:26
vulnerable because as Daniel and Dr.
27:29
Quest explained, this category is made up of smaller and medium
27:32
sized companies for the most part.
27:34
So it's interesting to understand this whole ordeal as, instead of a battle of
27:42
truth, More of a battle of semantics.
27:46
You know, it's almost like people were more concerned about how to
27:48
frame the issue than getting down to the actual root cause of it.
27:53
Daniel Schulof: Different people that have played a role in organizations
27:56
in the DCM controversy kind of characterize this somewhat differently.
28:00
When the FDA first announced its investigation into DCM in 2018, it
28:07
generally got reported in the media as they're investigating grain free products.
28:12
The FDA didn't actually use that language, to the best of my knowledge.
28:16
Knowledge specifically, but they did define it in terms of ingredients
28:20
that they were looking at.
28:21
And they're the ingredients that are most commonly found in grain free diets.
28:25
And so in the New York Times, Washington Post wrote stories about it.
28:28
Grain free was kind of how it was framed up.
28:31
Within a year later, Some of the folks that played an important role
28:35
in the FDA's investigation, veterinary academics that are in practice at major
28:39
research universities, published a paper and put out a bunch of consumer
28:44
facing writing where they defined the group of products somewhat differently.
28:47
They described it More broadly as what you, you mentioned BEG diets, which
28:53
is an acronym, standing for boutique exotic ingredient or grain free.
28:57
So it's inclusive of everything that's grain free, but it's also
29:00
larger than that because it includes boutique, which is to say made by a
29:05
manufacturer that is not colossal.
29:07
Or exotic ingredient, which is paraphrasing, but like the woman who
29:12
coined this term came up with that in her judgment constitutes exotic.
29:16
And so when the FDA announced its investigation at DCM, we're talking
29:19
about one massive already group of products, but then later some folks
29:24
tried to even expand that and make the group not just larger, but more diverse.
29:30
To say grain free, like you noted, is to describe a category that's
29:33
massively diverse in the first instance.
29:36
There's not a great deal of commonality, and there's a ton of variance.
29:40
Well, boutique exotic ingredient or grain free is so diverse that it knocks
29:47
you over the head with, how could this characterization be a fair, accurate,
29:52
like, give me a nutritional quality.
29:55
Or any kind of substance quality, ingredient quality, nutritional quality,
30:00
something that all those products share.
30:02
Just highlight one.
30:03
Like there has to be one if you're going to defend the
30:06
thesis that that's the problem.
30:08
They have to share something in common.
30:09
What is it?
30:10
No, there's nothing.
30:12
Jordan Tyler: This is interesting for several reasons.
30:15
But first, the general public's reaction to the DCM scare led to the
30:19
creation of several large communities of veterinarians and pet parents who
30:24
had either been impacted by DCM or were scared by it and wanted to know more.
30:30
One of these communities is a Facebook group that has more than 130, 000 members.
30:35
And the facilitators of the group have provided recommendations to its members
30:39
on what pet foods are safe to feed for pet owners concerned about DCM.
30:45
Interestingly enough, the only diets recommended in this particular
30:49
Facebook group are manufactured by three of the largest multinational
30:54
pet food companies that exist today.
30:57
So if Daniel's thesis is correct and the DCM debacle was.
31:03
Truly manufactured as a profit grab by big industry players, a ruling in
31:09
keto natural pet foods favor would be unprecedented, earth shattering, and
31:14
could possibly cause a lot of people to walk back on their prior assumptions.
31:20
Daniel Schulof: When the FDA announced that it had begun an investigation
31:23
into whether grain free dog foods were giving dogs DCM, I think a fair
31:28
number of folks in the industry, it like, didn't smell right, right away.
31:32
Immediately there were things that I noticed at least that were like
31:36
suspicious, you know, like at that time 2018 I'd already, I'd spent four years
31:40
writing a book about the overlap between Pet food industry, clinical veterinary
31:45
practice, regulatory world, all that stuff and how misinformation spreads within
31:50
it, I was able to recognize some things that maybe escaped the lay person's.
31:54
You know, observation, but there are things like names of people that I
31:58
wrote about in my book who I wrote about critically was that I think
32:03
they did some stuff wrong here.
32:05
Oh, I see their names in the FDA in the media about this.
32:08
That's interesting sign.
32:10
I see like a sort of tactical similarity the way that the like TCM issue is
32:16
being framed up in the early stages.
32:18
was consistent with how similar types of issues had been put out,
32:25
in my estimation, in the past in like really similar instances.
32:30
If you go to a veterinarian's office today, and you ask them, what do you think
32:33
about raw diets, raw diet for my dog?
32:36
What your vet will probably tell you is Well, there's no evidence that
32:40
they're any better, and there is some evidence that they might give your
32:43
dog some kind of foodborne pathogen.
32:45
Therefore, we really recommend that you stay away.
32:48
It's like that, as a matter of like, how the argument is made,
32:52
looks exactly like the DCM argument.
32:54
And that's, that's just one of several other issues that
32:57
are framed up in that way.
32:58
And then of course, I was running a company, young company, just
33:01
trying to get off the ground, that's getting defamed by this.
33:04
So I grew very interested in it, I grew very skeptical of it.
33:08
I took a few actions in light of the skepticism.
33:11
One thing is, I tried to get a article that you probably have talked about on
33:15
this show that was published in Journal of the American Veterinary Medical
33:18
Association, tried to get it retracted.
33:20
But it was a editorial about DCM that included a whole bunch of
33:24
factually inaccurate information.
33:27
It was able to get published in the journal anyway because it wasn't
33:30
peer reviewed, and I made the case that it ought to be retracted, um,
33:34
and I ultimately lost the fight.
33:36
But a second thing that I did is, um, like I said, I'm a lawyer.
33:39
I know something about the law.
33:42
One of the things I know about is called the freedom of information act.
33:45
Freedom of information act is a law, federal law that says in essence, the
33:49
government has to show you their records.
33:50
If you ask them for it, it's got a bunch of exceptions.
33:53
They can't ask them for your social security number.
33:54
I can't ask for nuclear codes, but generally speaking of them, some don't
33:58
fall into one of those exceptions.
33:59
They got to give it to you.
34:00
So I'm suspicious about the DCM thing.
34:03
I say to the FDA, in essence, I have a FOIA request, give me the entire DCM file.
34:08
I want to look at it.
34:09
They say, no, we don't have to do that.
34:11
They try to claim it's an exception.
34:13
It falls into an active investigation exception.
34:16
It's a, it's a nonsense argument.
34:18
There is a real exception for ongoing.
34:20
Criminal investigations, like if I'm being investigated for murder,
34:23
I can't be like, Hey, FBI, give me your whole file on me because it
34:27
compromises the investigation, right?
34:29
But this is not an investigation in that kind of sense.
34:32
And so they tried to make that argument.
34:34
So I sued them and I won.
34:36
And so they said, fine, we'll give you the file.
34:38
When the US government says we're going to give you a huge file,
34:41
tens of thousands of pages of documents takes a really long time.
34:43
I'd get a new CD, another 500, 000 documents every six weeks for three years.
34:49
And I eventually sifted through all of them and categorized them
34:53
and looked at what everything said.
34:55
And there is, within that, that corpus of documents, smoking gun evidence of fraud.
35:03
What do you do with that?
35:04
File a lawsuit to try to hold accountable the people that committed the fraud
35:07
and try to get them to pay for the damage they've caused to everyone else.
35:11
That's what the justice system is for.
35:13
And so that's, that's how the lawsuit came about.
35:16
Jordan Tyler: Okay, so this lawsuit was filed in February 2024 in
35:19
the District Court of Kansas.
35:21
And on November 5th, 2024, the court dismissed the suit on the basis
35:27
that the initial complaint filed by Keto Natural did not contain enough
35:31
specific factual details to support the claims made against Hills.
35:37
Daniel and his team are not ready to throw in the towel.
35:40
And honestly, when I followed up with Daniel, he only seemed more
35:44
impassioned to move forward, which is why they have appealed the case
35:48
in the 10th Circuit of the United States Court of Appeals in Denver.
35:52
Daniel Schulof: What that means is that for the next It's somewhat unclear.
35:57
There's not a fixed timeline, but something like six to 12 months, you
36:01
know, it's going to be pending at the 10th circuit and we'll go through
36:05
the process of making argument.
36:06
They'll make their argument.
36:07
Um, it'll be narrowly tailored to just have to do with this one
36:11
decision that the trial court reached.
36:14
Uh, if the court agrees with us and overrules the trial court's
36:18
decision, then it'll go back to the trial court and the trial court
36:20
will have to let it go forward.
36:22
If the court agrees with the defendant.
36:25
Then we will have an opportunity to appeal that as well to the U.
36:30
S.
36:30
Supreme Court.
36:31
Jordan Tyler: So help us understand why exactly the suit was dismissed
36:36
in the District Court of Kansas.
36:37
I read the brief, but oh man, I don't read legalese very well, so
36:42
I'd love to get your take on it.
36:44
Daniel Schulof: This was them saying, look, as a matter of law, there are some
36:48
things here that should prohibit this case from going forward, even if these
36:52
guys can prove up everything they've said.
36:54
What this case is, at its core, is a false advertising lawsuit.
36:59
What we have alleged, there's a law, a federal law in the United States.
37:03
That says false advertising is prohibited and there's a whole body
37:07
of case law that's developed to explain Well, what does that mean?
37:11
What it will constitutes false advertising, but in essence there are
37:15
kind of like two Main elements of it.
37:19
There's the false part and the advertising part they made some degree of arguments
37:23
pertaining to both of those two general elements and one of the things about
37:28
this case is that like the advertising component of it is not a slam dunk like it
37:35
ought to be that like I believe that with all my heart but at the end of the day
37:40
we're not talking about commercials that the defendant put up that say DCM is real.
37:48
Don't feed keto natural pet foods, feed hills instead, because otherwise
37:52
your dog is going to get DCM.
37:53
What we had was different.
37:55
We had a whole range of different kinds of statements that in one way
37:59
or another amount to advertising in my judgment, but aren't garden variety.
38:06
center of the target advertising, like the advertising side,
38:10
okay, I can see the arguments.
38:12
It's ultimately within the court's determination.
38:15
The court's not really so constrained by the facts of the case that they've got a
38:20
rule in one way, reasonable people, some fraction of every 10 people, some number
38:26
of them might side with the other side.
38:29
element.
38:30
On the other hand, I never really thought we could lose because at the
38:35
core of the case is the false statement that DCM is associated with BEG diets.
38:45
I never thought we could lose on the falsity element because that is false.
38:50
There is no evidence.
38:51
There's never been a study carried out where the finding was that DCM.
38:59
Therefore, it's false.
39:00
Therefore, I'm not too worried about that issue.
39:04
If you've read the court's decision, you'll know already that the court
39:08
actually didn't take that position.
39:10
The court ruled that this, in this eyes of false advertising law, the statement
39:18
DCM is associated with BEG diets.
39:21
Is not literally false.
39:24
And, um, as a result, granted the motion to dismiss.
39:29
That's not something that's like subject to interpretation and legal analysis.
39:35
It's just factual stuff straight up as such.
39:39
I can say with a great degree of confidence that unlike any
39:42
of judgments about advertising.
39:44
The court got that wrong.
39:46
In essence, what the court did, the reasoning that the court used to reach its
39:51
conclusion that it's not literally false to say DCM is associated with the EG diets
39:59
is, um, the court essentially said, look.
40:02
It's always possible.
40:03
You can't prove beyond a doubt that there's never going to be any evidence
40:09
that's going to come forward that's going to show that actually it is associated.
40:12
And then unless you have ironclad evidence that it isn't associated
40:17
with BEG diets, then you can't say it's literally false to say it is.
40:23
That kind of logic is, um, something that is like an error of scientific reasoning.
40:31
That's taken place for a long time, long enough to have its own Wikipedia page.
40:38
Um, the Wikipedia page is called Russell's teacup, but it's sometimes
40:43
also like more offhandedly called you can't prove a negative, but the Russell's
40:48
teacup thing, the name for that.
40:51
Yeah, it comes from the like super British philosopher Bertrand
40:55
Russell, who, you know, is a mega figure in Western philosophy.
40:59
And what he said was, in essence, if somebody says to you, Hey, you know,
41:06
Jordan, I figured out there is a full, you know, eight ounce cup of Earl Grey
41:13
tea in a porcelain teacup orbiting the earth 35 miles beyond the atmosphere.
41:22
That there is no amount of evidence that any form of scientific experimentation
41:29
can produce that will absolutely discredit that statement conclusively.
41:35
You could always, I could say look I spent 100 years working with SpaceX and the, you
41:42
know, Hubble telescope and everybody else.
41:44
And we looked everywhere there was that we could come up with.
41:46
And we found no evidence of the teacup.
41:50
That doesn't amount to evidence of no teacup, right?
41:55
There's always the possibility that, well, we just didn't look in this one
41:58
other corner and maybe it was right there.
42:01
And the court made that error of logic.
42:04
And it's ruined.
42:05
Um, and as a result, dismiss the case.
42:08
Jordan Tyler: Yeah, I guess kind of my two cents is if we took that
42:12
approach for everything, then it would all be a cop out, right?
42:17
Like, like we wouldn't be able to get to the bottom of anything
42:20
because what we don't know would always undermine what we do know.
42:25
And I guess I understand, I understand it on a philosophical level, but in
42:29
practice and in law seems Like a silly thing to be basing our decisions on.
42:37
Daniel Schulof: Yeah, you can start to say almost anything you want in your
42:40
advertising, if that's the principle.
42:43
The court is wrong.
42:44
And one of the reasons we know that is because it is this kind of
42:48
error that's been taking place for centuries, and is famous enough
42:52
to have its own Wikipedia page.
42:54
But another thing that having its own Wikipedia page Demonstrates
42:58
is that this is kind of common.
43:00
People make this mistake.
43:01
Smart people make this mistake.
43:04
And I don't know that much about the judge in our case, but I do
43:10
know that like educated people.
43:14
that aren't professionally involved in the practice of science are
43:19
prone to this kind of mistake.
43:21
It doesn't sound completely illogical until you walk through some of that stuff.
43:27
And so when I look inward, one of the things I can say is like, we didn't
43:30
do a good enough job of meeting the court where the court was likely to
43:35
be going into this ruling that like.
43:38
We looked past this too much and said that, in essence, the court
43:42
will get this, and so we spent more time focused on other things and
43:45
kind of skirted this to some degree.
43:48
In retrospect, that was an error, um, and it's not one we'll make again.
43:54
Jordan Tyler: So, this lawsuit currently sits in the Tenth Circuit Court of
43:57
Appeals in Denver, and we'll be sure to keep in touch to share any material
44:01
developments as they become available, but in the meantime, Daniel, what are you
44:06
hoping to accomplish with this lawsuit?
44:09
Daniel Schulof: Number one is to make sure that the people that enjoyed a billion
44:13
dollar windfall as a result of this and saw their careers enhanced and made a
44:16
lot of money by damaging all the various groups that we talked about before.
44:22
And they have to give that money back, that they're penalized for committing the
44:26
misconduct that they committed, and that the court has the power to essentially
44:31
make that right, to assure that the money goes back to the people who, uh,
44:35
have been harmed or been damaged by it.
44:38
And that the bad guys don't get to just make off with money.
44:42
Second thing though, is I, maybe I'm in the minority here by virtue
44:47
of my professional background, but I'm a believer that the legal system
44:52
in the United States, the judicial system is sometimes a very good
44:57
vehicle for social change, industry improvement, those types of things.
45:03
Jordan Tyler: Daniel's faithful outlook in the U.
45:05
S.
45:05
legal system means he's far from shying away from this issue anytime soon.
45:12
As we wrap up today's episode, let's bring it back to BSM
45:14
Partners Veterinary Experts.
45:17
Throughout the course of this episode, we've highlighted several
45:20
trends and misconceptions that fueled a huge shift in the industry.
45:25
The ramifications of which persist today.
45:28
In a knee jerk reaction, sweeping changes were made across the
45:32
industry to make grains good again.
45:35
And none of these changes were actually researched before being implemented.
45:39
So we're just perpetuating the issue that caused the DCM debacle in the first place.
45:46
And as Dr.
45:47
Katie Miller puts it, This is a dangerous approach.
45:51
Dr. Katy Miller: When this came about and somebody said, Hey, there's a concern
45:54
with these diets, everybody kind of lost their mind and went crazy, and so it
45:58
was like, Oh, okay, the grain free foods are bad, let's add grains to the food.
46:03
So, all of a sudden everything came in with ancient grains,
46:08
grain friendly, wholesome grains.
46:10
We added things like taurine, cysteine, methionine, things, amino
46:14
acids that are good for heart health.
46:15
Like, we, all of a sudden, everybody was just panicking and adding things to foods
46:20
because we didn't know what was going on.
46:22
And so, when you don't have the scientific foundation to be able to
46:25
determine what was going on and how to stop it, it may, just created
46:30
this mass panic in the industry of, well, let's do something about it.
46:34
And so, the stores went from being 75 to 90 percent to 100 percent grain free
46:41
stores to all of a sudden needing to have this room for these grain inclusive foods.
46:46
And so, there was a big shift in the whole industry when this happened.
46:50
And unfortunately, I think that this happened because we had a lack
46:56
of good scientific research to be able to support the grain free food.
47:00
We just didn't have that information.
47:02
And I think that we kind of jumped out of one fire and could have jumped into
47:06
another by adding in ancient grains.
47:10
Like what, what information do we have on ancient grains?
47:13
Those weren't traditionally used as pet food ingredients either.
47:16
So they can be lacking some of the same research that our grain free ingredients
47:21
had like the pulses and the legumes and we could have created a whole nother problem.
47:25
Luckily, I don't think that we did, but I think that we need to be more
47:30
strategic in our response to things.
47:33
And this is one of those areas that if we had had the research be there to be able
47:37
to back it up, we would have been able to go on the things that we knew instead
47:42
of just kind of throw the kitchen sink at it and hope that something sticks.
47:47
Dr. Bradley Quest: I think Katie brought up a, you know, a lot of great, great
47:50
points there about, you know, was there enough research around grain free
47:53
before 40 percent of the industry was, you know, feeding grain free diets?
47:57
Is there enough research out there about ancient grains?
48:00
You know, what is an ancient grain?
48:01
Is that an actual regulatory definition?
48:04
No, it actually isn't.
48:05
Um, should there be more research done into adding, You know, some
48:09
of these other, uh, as Katie said, carbohydrate ingredients into pet foods
48:14
at relatively high, um, inclusion rates.
48:17
Absolutely.
48:18
There should be, you know, pet food companies that are doing that, they should
48:21
be doing feeding studies with their diets.
48:24
That's really what it all boils down to.
48:26
You know, I know we've talked about it before, but, um, pet food
48:29
companies need to do research.
48:31
with their diets.
48:32
They need to do feeding studies.
48:34
And if they're not, you need to ask them why they don't do it.
48:37
And if they are doing them, ask them why they're not sharing the results.
48:41
Dr. Katy Miller: Well, and really it's a huge competitive advantage
48:44
to be able to say that you have done research on your foods.
48:46
You've actually fed these to dogs that aren't just my dogs.
48:51
And we have the ability now to do, um, like in home feeding trials where we're
48:56
using real life dogs and being able to use a real life situation and test
49:01
these diets, there's no reason that you shouldn't be doing this testing and making
49:05
sure that these diets are complete and balanced before they're in the market.
49:09
Dr. Bradley Quest: People look at us being, you know, our consulting
49:12
company and our research arm of that and they say, Oh my gosh,
49:16
you guys are grain free advocates.
49:17
We're actually not.
49:18
We, we do, we do product development.
49:21
We do research on all kinds of diets, but what we are advocates of
49:24
is actual truth and good research.
49:27
So.
49:28
You know, that was the reason why we did our research and why we
49:30
tried to investigate this so much because we wanted to know if there
49:34
actually was something to this.
49:35
We should know about it because we, we touched so many products
49:39
in the, in the pet food space.
49:42
We did as much as probably anybody did to try to investigate this and
49:46
there just is no definitive link between any of these diets and DCM.
49:54
Jordan Tyler: So of all the things we talked about today, perhaps
49:57
the most salient point is this.
50:01
When scientific rigor takes a backseat to speculation and unsubstantiated
50:06
fear mongering, the consequences can have seismic effects for entire
50:12
industries, and more importantly, for the health of our pets.
50:16
The DCM controversy, whether manufactured or misunderstood, serves as a reminder
50:22
that transparent research Evidence based product development and good old
50:28
critical thinking should always be the key drivers of pet nutrition innovation.
50:33
Not fear, not marketing, and not the profit interests of big business.
50:40
As Daniel points out, the pet nutrition space is rife with misinformation.
50:45
And placing the burden of scientific literacy on veterinarians and other
50:49
industry stakeholders is no longer enough to ensure the best interests
50:54
of our canine and feline companions.
50:56
is taken to heart.
50:58
Rather, those who can educate themselves and who are willing to challenge
51:02
narratives that lack substantive evidence to back them up will be crucial to
51:07
ensuring history doesn't repeat itself.
51:10
Daniel Schulof: The only way for you to ensure you're getting accurate
51:14
information is to make sure that you are personally scientifically literate
51:18
enough to evaluate statements on your own, that you understand, given the
51:22
tools that are available to you in this day and age between internet
51:25
technologies and what have you.
51:27
That you can run this stuff down on your own.
51:30
If you have to rely on somebody else telling you, that
51:34
ought to be how things work.
51:36
Like there, it can't be the case that we're all experts in every
51:40
scientific domain that we can do that.
51:43
You know, there's plenty of hyper technical stuff that if somebody was
51:46
like, well, Dan, which of these two theories of genetics do you endorse?
51:50
I would have to say, I don't know.
51:51
I just don't know the answer to that.
51:53
I don't know enough about it.
51:55
And in those fields, it's like, of course, very useful to have experts
51:59
that you can go, Well, these people said that, and they're the experts.
52:01
We trust them.
52:02
It is not that way in the veterinary nutrition world, unfortunately.
52:06
And, um, You gotta improve your scientific literacy.
52:09
That's just kind of the sad reality of the current situation.
52:13
Jordan Tyler: So, lots to unpack today, but I think if
52:17
we takeaway, maybe it's this.
52:22
When it comes to complex topics like this, The importance of
52:25
research cannot be overstated.
52:29
It's only through peer reviewed, collaborative studies that we
52:32
can truly get to the bottom of DCM and other hard hitting topics
52:36
impacting pets and their people.
52:39
If you'd like to learn more about DCM, check out our wealth of previous
52:43
episodes, which we've linked in the show notes for today's episode.
52:47
These include conversations highlighting the true incidence rates of DCM and
52:52
how they don't match up with what was reported to and by the FDA.
52:57
Look for the episode titled, A Mountain or a Molehill, for that one.
53:02
In our Pawing Through the Research episode, we discussed how we can use
53:06
literature reviews to pave the way for future research and to debunk understudied
53:12
or unsubstantiated preconceptions about pet health and nutrition.
53:16
We've also shared an episode about how study design can make or break a piece
53:20
of research, and how pet parents can empower themselves to think critically
53:24
about the studies they read before jumping to conclusions, or believing the
53:29
conclusions that others have jumped to.
53:32
Check out our Think Twice episode to get the scoop on study design.
53:36
And stay tuned for a future episode on how to interpret scientific literature so
53:41
you can learn how to make the best, most informed decisions for you and your pet.
53:48
Thank you for tuning in to another episode of Barking Mad.
53:52
If you want to learn more about us or BSM Partners, please visit us at www.
53:57
bsmpartners.
53:59
org.
54:01
Don't forget to subscribe on your favorite leading podcast platform and share it with
54:05
a friend to stay current on the latest pet industry trends and conversations.
54:10
A huge thank you to Daniel Shuloff for sharing his
54:13
perspectives on today's episode.
54:15
If you'd like to keep up with him in the Keto Natural Pet Foods lawsuit,
54:19
we've linked some resources for you in the show notes of this episode.
54:23
We'd also like to thank Parker Dodson with podcastvideos.
54:26
com for his post production support, as well as the dedicated team behind
54:31
this podcast, Adamiette Thomas, Mili Bowden, Kate Wright, Katie Wolf, and Dr.
54:37
Katie Miller.
54:39
An extra thank you to Leanne Haggerty and Michael Johnson
54:42
in support of this episode.
54:44
See you next time!