Court Denies FTC Motion to Hold Lane Labs in ContemptAugust 20, 2009
The United States District Court for New Jersey recently denied a motion by the Federal Trade Commission (“FTC”) to hold Lane Labs-USA, Inc. (“Lane Labs”), Andrew Lane, and William Lane in contempt for allegedly violating a consent decree. Lane Labs entered into a consent decree with the FTC in 2000, agreeing not to make any health statements about its products without the support of competent and reliable scientific evidence. In 2007, the FTC filed suit, alleging that Lane Labs had violated the consent decree by making unsubstantiated claims for its calcium supplement, AdvaCAL, and a supplement intended to improve male fertility known as Fertil Male.
At the trial, the FTC presented two experts who testified that Lane Labs did not have competent and reliable scientific evidence to support claims made for AdvaCAL and Fertil Male. In turn, Andrew Lane testified as to the process the company followed for substantiating the claims it made for its supplements. Mr. Lane explained that he or other employees met with researchers, conducted multiple studies when necessary to substantiate a claim, and hired a compliance officer to insure that the company remained in compliance with the consent decree. Lane Labs also offered two experts who testified that the company had competent and reliable substantiation for its claims.
The court found that Lane Labs’ experts were credible and that the Lane Labs had taken sufficient efforts to comply with the consent decree, including submitting “multiple voluminous compliance reports” to the FTC. In reaching its decision, the court was particularly concerned that the FTC had never reviewed these submissions until they brought this action. The court reasoned that it would be “disingenuous” to punish the company after it had been making submissions to the FTC for years without any indication from the agency that it was not in compliance with the consent decree. Finally, the court noted that there was no evidence that consumers were harmed by the company’s supplements, and therefore financial penalties for consumer injury would not be fair.