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No Consent Decree Is Too Old to be Enforced

11 Oct, 2012 By: Gregory J. Sater

The Federal Trade Commission (FTC) recently announced a $3.7 million settlement with a diet plan marketer by the name of Jason Pharmaceuticals.

The marketer’s radio, TV, print and Internet ads displayed images of success stories consisting of users of the marketer’s “Medifast” diet plan. These users had lost substantial weight on the program, such as 43, 70, and 73 pounds. Some of the ads also said: ”You can lose up to 2 to 5 pounds per week on Medifast.” Although a “results will vary” disclaimer also was used, the FTC characterized it as being “in small, inconspicuous type in print ads, or spoken quickly during radio or television ads.”

The FTC alleged that the marketer lacked “competent and reliable scientific evidence” to substantiate the claim (that the FTC alleged was made) that users of the program generally could expect to lose 2 to 5 pounds per week, or generally could expect to lose more than 30 pounds overall.

What may be most significant about the FTC’s action, however, is that it was a contempt action: the FTC based its case on a consent decree that was 20 years old. You read that right – the FTC brought a case claiming that the marketer was in violation of that 20-year old consent decree.

The 1992 decree stated, as a settlement, that Jason Pharmaceuticals, in connection with any weight-loss or weight-control program, would not make any representation about the success of users of any such program without having “competent and reliable scientific evidence” to substantiate the representation.

Now in today’s world – to today’s FTC – as most of the readers of the DRMA Voice probably know, when the FTC says “competent and reliable scientific evidence” in a case regarding weight loss, it means a well-controlled human clinical study. And with today’s FTC, that also means that little if any agency deference will be given to a “results will vary” disclaimer.

In the new settlement, the FTC forced the marketer to agree that, from this point forward, in order to convey the claim that the FTC alleged that it conveyed (to wit, that followers of its meal plan generally could expect to enjoy the same weight loss that the testimonialists had enjoyed), the marketer will need to have a well-controlled clinical study. Also, the marketer had to pay $3.7 million to the FTC as a penalty.

The Jason Pharmaceuticals case should serve as a wake-up call to anyone in the DR industry who has a prior consent decree with the FTC. The case signals that today’s FTC will not hesitate to reach back in time to bring an allegation of contempt, and that it will base its allegation upon its current 2012 view of what is, or is not, a deceptive advertising practice. Anyone with an FTC consent decree would be well advised to get it out, dust it off, and consider where the lines are drawn today.

About the Author: Gregory J. Sater

Gregory J. Sater

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