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.
|White Paper: InterMedia Advertising - The 2016 Political Advertising Environment|
|Case Study: InterMedia Advertising - POV Series: Optimization|
|Case Study: FDAImports.com - How the FDA Almost Stopped the BeActive Brace|
|FTC Scores Big Win Against Amazon in Kids’ Apps ‘Unfairness’ Case 7 Jun, 2016|
|Antitrust vs. Anti-Trump: The Donald’s Feud With Amazon 7 Jun, 2016|
|Old Law Spawns New Class Action Headaches 7 Jun, 2016|
|Beware of IP Scams 10 May, 2016|
|This Article Is 100% Natural (I Hope the FTC Agrees) 10 May, 2016|
|Membership Communications Designer - The Nature Conservancy - Arlington, VA|
|OFFICE LOCATIONArlington, Virginia (VA)POSITION SUMMARYThe Membership Communications Designer manages and implements creative projects that advance Membership?s fundraising and marketing strategies. S/he is directly responsible for projects and managing project budgets.ESSENTIAL FUNCTIONSThe Membership ...|
|Sales - Order Fulfillment and Contact Center - a2b Fulfillment - Greensboro, GA|
|a2b Fulfillment, located in Greensboro, GA is a fast-growing provider of third-party logistics and business support services. We are currently seeking a Sales Professional that possesses the skills to sell complex, business support services to medium, and large organizations. This position offers ...|
|Media Operations Supervisor - Modus Direct - Sarasota, FL|
|Job Purpose:The Operations Coordinator will be responsible for traffic, data entry and management, new campaign setup, and support the Account and Media teams in reporting functions. Working with the management team, the position also contributes to the development and implementation of operational ...|
|Senior Performance Marketing Manager - NetSpend - San Mateo, CA|
|NetSpend Corporation is a leading provider of prepaid debit cards in the U.S. Prepaid debit cards are experiencing dramatic growth in consumer adoption. The company's prepaid cards enable anyone to make purchases, pay bills, secure reservations, and shop online without needing a traditional bank ...|
|Manager, Digital Marketing and Innovation - HarperCollins Christian Publishing - Grand Rapids, MI|
|HarperCollins Christian Publishing is in search of an Digital Marketing and Innovations Manager for their Curriculum division. The Manager, Digital Marketing and Innovation leads the strategy and execution of key direct-to-church and Curriculum marketing tactics, such as sales funnels, email, blogs/websites, ...|