A US District Court has ruled against the Federal Trade Commission (FTC) and in favor of a supplements firm, in a landmark case that found FTC’s criticism of the company’s advertising was simply a “difference of opinion”.
The agency, which works together with the Food and Drug Administration (FDA) to monitor product advertising, had claimed that LaneLabs violated an earlier consent decree by making unsubstantiated claims for AdvaCal and Fertil Male. FTC recommended a fine of $24m.
However, Judge Dennis Cavanaugh of the US District Court of New Jersey last week denied the motion, on the grounds that LaneLabs had “clearly offered support and substantiation for the claims regarding their products”.
“This is not a case of a company making claims out of thin air,” stated the opinion.
The court highlighted the fact that LaneLabs had hired a compliance officer and had also sought expert advice to interpret the scientific evidence it used to back its claims.
“LaneLabs found a product and obtained scientific evidence that the product is efficacious. LaneLabs then consulted experts who opined that the research supporting the product and the product itself were good,” it said.
Jack Wenik, the Sills Cummis & Gross attorney representing LaneLabs, called the ruling a “total victory.”
AdvaCal, which has been marketed since 2000, is derived from oyster shells, which are ‘super-heated’ to produce calcium hydroxide and calcium oxide. This is then combined with a heated algae ingredient to enhance the absorbability of the calcium.
Claims that FTC took issue with included statements that AdvaCal can “build bone density”, that it is the “only” calcium that can increase mineral bone density, and that it is “clinically shown to be three times more absorbable that other calciums”.
Fertil Male is derived from the Peruvian plant root Lepidium meyenii, also known as LMG or maca. The product has been marketed as a “natural supplement for male fertility:” since 2003, and claims it is “clinically shown to promote sperm count and motility”.
In its complaint, FTC stated that these claims were “unsubstantiated”, and that the results of scientific trials had been “misrepresented”.
“The Defendants’ unsubstantiated claims constitute contempt and have resulted in injury to consumers,” stated the FTC complaint.
During the hearing for the case, held in April this year, FTC and LaneLabs had each presented two expert witnesses, who were physicians, researchers or professors of medicine.
They were all found by the court to be “credible and knowledgeable in their respective fields of expertise”.
“In considering the testimony offered by all of the experts the difference between FTC’s experts and the Defendants’ experts came down to a difference of opinion – not necessarily matters of right and wrong,” said the court.
‘All reasonable steps’ taken
Significantly, neither of FTC’s experts said the products in question were not effective or constituted a health risk to the public. In addition, the court said FTC had provided no evidence that consumers had complained or were harmed by the use of the supplements.
The court added that LaneLabs undertook “significant efforts” and “all reasonable steps” to be compliant with the Consent Orders.
“In this Court’s opinion, to tell Defendants that their efforts were not good enough years after not advising them of any compliance issues is disingenuous and is highly relevant to the inquiry into whether Defendants should have done something different in the first instance,” it sated.
FTC’s discretion limits
According to Jonathan W Emord of Virginia-based law firm, Emord & Associates, the case is a “rare and signal victory”.
“This case recognizes largely for the first time that FTC’s discretion has limits and may not overcome good faith, science-backed efforts at compliance simply based on the whim or caprice of the agency’s enforcers,” he said.