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.
March 4, 2014 | Article | By Jeffrey Richter, John Waller
In another sign that private plaintiffs continue to pursue consumer-oriented claims that regulatory... more>>
March 4, 2014 | Article | By Linda A. Goldstein
Last month, the Federal Trade Commission (FTC) announced a major settlement with Apple stemming... more>>
March 4, 2014 | Article | By William I. Rothbard
The legal landscape of the Telephone Consumer Protection Act (TCPA), both before and after the... more>>
March 4, 2014 | Article | By Ian D. Volner, Jeffrey D. Knowles
On February 26, the Chairman of the House Ways and Means Committee announced the release of a Tax... more>>
February 4, 2014 | Article | By Arthur Yoon, Jeffrey Richter
An advertiser that advertises consumer products on its website must be truthful and have evidence... more>>
January 1, 2014 | Article | By Thomas Haire
At first it was humbling. Direct response is unlike any industry I had seen before,” says Gregory... more>>
December 1, 2013 | Article | By Thomas Haire
What we really care about is providing unequaled service to our customers,” says Bruce Stone,... more>>
November 1, 2013 | Article | By Thomas Haire
In May, we turned the Direct Response Marketing Alliance (DRMA) Spotlight on the InterMedia Group... more>>
October 1, 2013 | Article | By Thomas Haire
In March, we turned the Direct Response Marketing Alliance (DRMA) Spotlight on Cannella Response... more>>
September 1, 2013 | Article | By Thomas Haire
“This is not just about direct response,” says Monica C. Smith, founder and CEO of Parsippany,... more>>
April 29, 2014 | Event
Join 3,000 direct response decision makers at the industry’s foremost event. Year after year,... more>>
March 17, 2014 | Event
The DRMA's Chicago Networking Party takes place during the International Home + Housewares Show in... more>>
February 5, 2014 | File
White paper: Higher Power Marketing more>>
September 12, 2013 | File
Jordan Whitney September 2013 Greensheet more>>
September 11, 2013 | File
White paper: Brandlive - Rockwell Invests in Interactive Video more>>
August 22, 2013 | File
DRMA White Papers and Case Studies wufoo header more>>
June 18, 2013 | File
Case Study: Trust Guard - Stacks and Stacks more>>
|Brand Manager Cross Channel Marketing Strategy - Capital One - Richmond, Virginia|
|Manager, Cross Channel Marketing Strategy Capital One is seeking a Manager to support the Brand Cross Channel Marketing Strategy team. In this exciting role you will: work in an innovative and intellectually ...|
|Brand Manager Direct Mail Communications - Capital One - Richmond, Virginia|
|Manager, Direct Mail CommunicationsUS Card Acquisitions Capital One, a Fortune Magazine “100 Best Companies to Work For,” is seeking a Marketing Manager for the Direct Mail Channel, supporting ...|
|Account Executive - Direct Response Television - Delivery Agent - New York, New York|
|Brief Description:Responsible for selling short-form Direct Response advertising on cable platforms and other media to new and existing clients.DescriptionIdentifies and makes cold calls on prospective ...|
|Motion Graphic Designer - Great HealthWorks - Fort Lauderdale, Florida|
|Great HealthWorks, a "People First, Profit Second" company and makers of Omega XL and other natural health products and supplements seeks a Bilingual (Spanish), dynamic and skilled Motion Graphic Designer ...|
|Video Editor - Great HealthWorks - Fort Lauderdale, Florida|
|Great HealthWorks, a "People First, Profit Second" company and makers of Omega XL and other natural health products and supplements seeks a Bilingual (Spanish), dynamic and skilled Video Editor for its ...|