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 email@example.com.
|DRMA Spotlight: Processing the Right Answers for Clients 1 Mar, 2015|
March 3, 2015 | Article | By Marc Roth
The Federal Trade Commission (FTC) has again let industry know that it is very much on the beat... more>>
March 3, 2015 | Article | By Arthur Yoon, Jeffrey Richter
California’s consumer protection statutes generally prohibit false or misleading advertising in... more>>
March 3, 2015 | Article | By Andrew D. Price, Jeffrey D. Knowles, Justin E. Pierce
Under the traditional rules of proper trademark use, brands must be used as adjectives and in a... more>>
March 3, 2015 | Article | By Rachel Hirsch
Frequently, the Federal Trade Commission (FTC) announces enforcement initiatives it seeks to... more>>
March 3, 2015 | Article | By William I. Rothbard
In “Living Vicariously — and Dangerously — under the TCPA” (DRMA Voice, March 2014) I... more>>
March 1, 2015 | Article | By Thomas Haire
It’s been more than two years since we turned the Direct Response Marketing Alliance (DRMA)... 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>>
March 2, 2015 | File
Higher Power Marketing: Conversion Rates So Good They’re (Almost) Unheard Of 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
|Editor-in-Chief - GKIC - Chicago, IL|
|Company DescriptionGlazer-Kennedy Insiders Circle (GKIC) is in the information marketing business targeted to entrepreneurs and small business owners. This membership based business model provides up-to-date products and services, primarily concentrated in the direct response marketing arena, in ...|
|Account Coordinator - M2 Marketing & Management Services - Santa Ana, CA|
|At M2 Marketing and Management, our services reflect a complete solution to creating, managing, and supporting virtually every aspect of a Direct Response campaign, including offer development, financial modeling, call centers, TV media, digital media, social media, performance analytics, fulfillment, ...|
|Director of Annual Giving - Berry College - Mount Berry, GA|
|Position Summary:The director of annual giving leads the strategy, planning, implementation and assessment of annual giving programs that support the college operating budget.Essential Responsibilities:Lead the development of a strategy to expand the number and retention of donors to the annual ...|
|Marketing Manager - Florida Vocational Institute - Miami, FL|
|Are you ready to be a marketing star in Miami?Are you a Self- Starter, Fast Learner, and Energized by a fast paced results oriented culture? APPPLY NOW! email or call Arnie @ firstname.lastname@example.org- 305-665-1911Join a fast growing entrepreneurial culture that is looking for the next marketing superstar.Must ...|
|Customer Experience Specialist - BAYER - Whippany, NJ|
|DescriptionCustomer Experience SpecialistBayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials. As an innovation company, it sets trends in research-intensive areas. Bayer's products and services are designed to benefit people ...|