FTC Loses Contempt Action Against Garden of Life6 Mar, 2012 By: Linda A. Goldstein
The Federal Trade Commission (FTC) suffered a striking loss in its efforts to hold Garden of Life, the marketer of various dietary supplements, in contempt of a previous consent order entered into by the company with the FTC in 2006.
The FTC alleged that Garden of Life violated the order by: falsely claiming that its Raw Vitamin C, Raw Calcium and Grow Bone System contained no soy allergens; making baseless claims that its Ocean Kids Omega 3 product has brain boosting powers and other benefits for children; and making unfounded claims that RAW Calcium and Grow Bone System are superior to other calcium supplements. The court ruled that the FTC had failed to prove that any of the challenged claims violated the previous consent order. There are a number of fascinating highlights from the case that should be of interest to every DR marketer.
First, the court expressly stated at the outset of the decision that in order for a defendant to be held in contempt of an order, the order must be clear, definite and unambiguous. While the court did not in this case ultimately need to address the issue of whether the original Garden of Life consent order was sufficiently clear and unambiguous, its warning on this issue is likely to fuel the FTC’s current efforts to move away from the more general “competent and reliable scientific evidence” substantiation standard to a more specific requirement that certain claims be supported by one or more clinical studies.
Secondly, the Court’s analysis of the “no soy allergen” claim should be music to the ears of marketers who routinely rely upon their suppliers for their ingredient claims. Garden of Life defended this claim by arguing that it was not the manufacturer of the product, and that it had been assured by the manufacturer that the product did not contain any allergens. The court agreed with Garden of Life and expressly ruled that the allergen statements, prepared by the manufacturer, constitute “competent and reliable scientific evidence.”
The court’s approach to the Ocean Kids Omega 3 product claims is particularly noteworthy. The FTC will often retain its own experts to critique a defendant’s studies or to contradict the expert opinions upon which a defendant has relied, and the courts have historically given great deference to the FTC’s experts. In this case, the Court ruled that simply because the FTC’s expert disagreed with Garden of Life’s expert on certain aspects of a study’s trial design does not mean that Garden of Life’s expert opinion did not constitute competent and reliable scientific evidence.
Perhaps the most interesting aspect of the case involved the FTC’s challenge to alleged claims by Garden of Life that its Raw Calcium and Grow Bone System offered superior health benefits to other calcium supplements. The court took a very narrow view of the existing consent order. The order provision at issue prohibited Garden of Life from making representations about the “absolute or comparative health benefits of its products.” The court determined that this provision only applied to claims about the health benefits of Garden of Life products or to claims that individuals who use Garden of Life products would achieve certain benefits compared to those who do not use the product. In the court’s view, the FTC’s interpretation of the order provision in question was not a sufficiently tailored interpretation of the injunctive provisions of the consent decree. The court further determined that even if the FTC’s interpretation of the order provision was correct, it had taken Garden of Life’s claims out of context, and the advertising was not making the claims that the FTC had alleged.
This decision will likely have an impact on FTC order provisions in the future, but for those facing initial enforcement actions or contempt proceedings, the court’s analysis and decision certainly provides some useful precedent.
Linda Goldstein is chair of the Advertising, Marketing and Media division of Manatt, Phelps & Phillips LLP, based in the firm’s New York office. She can be reached at (212) 790-4544 or firstname.lastname@example.org.
February 10, 2015 | Article | By Jeffrey Richter, John Waller
As the popularity of e-cigarettes has substantially increased during the past few years, the... more>>
February 10, 2015 | Article | By Gregory J. Sater
By now, readers of this column know that if they run an ad that states that their product causes... more>>
February 10, 2015 | Article | By William I. Rothbard
As the court was rocking the FTC landscape by overruling the Democratic majority that had favored... more>>
February 10, 2015 | Article | By Linda A. Goldstein
On Jan. 30, the U.S. Court of Appeals for the District of Columbia Circuit issued its long-awaited... more>>
January 13, 2015 | Article | By Jeffrey D. Knowles, Michelle C. Jackson
If you are unsure whether your products are subject to the California Air Resources Board’s... more>>
November 1, 2014 | Article | By Thomas Haire
In January 2013, we turned the Direct Response Marketing Alliance (DRMA) Spotlight on Temecula,... more>>
October 1, 2014 | Article | By Thomas Haire
“We’ve always been innovators in the industry — we’ve disrupted it a few times,” says Rob... more>>
September 1, 2014 | Article | By Thomas Haire
O2 Media is a fully integrated media and television production company, based in Pompano Beach,... more>>
August 1, 2014 | Article | By Thomas Haire
“When Rob Albert and I formed Grand Slam Direct, we didn’t want to be just another production... more>>
July 1, 2014 | Article | By Thomas Haire
Vantiv, based in Symmes Township, Ohio — with offices in Dallas, Houston, Louisville, Tinley... more>>
July 23, 2015 | Event
The Direct Response Marketing Alliance (DRMA) hosts its annual Summer Bash each July in Southern... more>>
April 21, 2015 | Event
Join 3,000 direct, digital and data-driven marketing decision makers at the industry’s foremost... more>>
March 9, 2015 | Event
The DRMA's Chicago Networking Party takes place during the International Home + Housewares Show in... more>>
February 13, 2015 | File
Higher Power Marketing: We Gave Them the Power to Buy Media in Any Market more>>
December 8, 2014 | File
The Illusion Factory: Interactive Campaigns Supporting the Release of the CW Network’s “The... more>>
August 8, 2014 | File
August 8, 2014 | File
July 15, 2014 | File
|Car driver and survey operator - Greenwood Recovery - Baltimore|
|Are you looking for an opportunity to:Play a vital role in the financial success of a company?Be recognized for your outstanding contributions?Enjoy the sense of accomplishment that comes from a job well done?Be appreciated for your hard work?Apply your knowledge and enthusiasm for cars?TheRepossession ...|
|Digital Marketing Analyst - Lifes2good - CHICAGO, IL|
|Job Description:The Digital Marketing Analyst, will be responsible for Viviscal.coms digital marketing initiatives including data analysis and opportunity profiling, new customer acquisition, affiliate marketing and paid search. The ideal candidate will have experience in digital initiatives and ...|
|Director of Analytics - International Fellowship of Christians and Jews - Chicago, IL|
|DIRECTOR OF ANALYTICSNON-PROFIT INDUSTRYAre you called to a mission that bridges understanding between Christians and Jews? Do you want to help over a million Jews around the world through humanitarian relief?Does it excite you to know that the expertise you provide in data analysis and market ...|
|Associate Publisher - Agora Financial - Baltimore, MD|
|Agora Financial is currently seeking an Associate Publisher- someone who is a marketer, writer and experienced direct response professional in the publishing business to become the head of a group and grow the organization. The ideal candidate will be an IDEAS driven marketer and possess skills ...|
|Director of Direct Response Marketing - Interline Brands - FL|
|Reporting to the head of marketing and e-commerce, the Director, Direct Response Marketing is responsible for development and implementation of strategic direct response marketing initiatives including direct mail, email and customer analytics. This is a highly cross functional role, requiring ...|