Court Finds That Lane Labs’ Advertising Claim Lacks Substantiation

December 14, 2011

By Ricardo Carvajal

On November 18, the United States District Court for New Jersey granted FTC’s motion for a finding that Lane Labs violated an order agreed to by the parties in 2000.  In part, that order requires Lane Labs’ health-related marketing claims to be substantiated by competent and reliable scientific evidence.  The district court found that Lane Labs’ advertising for its calcium supplement “promised results that were unattainable for large portions of [its] audience,” and that its advertising claim therefore was not substantiated by competent and reliable scientific evidence.  As we discussed in a prior posting, the district court initially denied FTC’s motion in August 2009 after weighing competing testimony and finding that Lane Labs’ marketing claims were adequately substantiated.  FTC appealed, and in October 2010, the Third Circuit Court of Appeals remanded the case to the district court for reconsideration of the substantiation issue.   

Stung by the district court’s initial ruling in 2009, FTC began inserting more specific substantiation provisions into its consent decrees (see, e.g., our prior blog posting regarding FTC’s consent decree with Nestle).  Notwithstanding FTC’s recent victory over Lane Labs at the district court level, the agency can be expected to continue including very specific substantiation provisions in its consent decrees.  As the Lane Labs case shows, the alternative can mean protracted and costly litigation.