By Riëtte van Laack –
The United States District Court for the Southern District of Florida recently denied a motion by the Federal Trade Commission (“FTC”) to hold Garden of Life and its founder, Jordan S. Rubin (collectively “GOL”) in contempt for allegedly violating a court-issued consent decree. GOL entered into a consent decree with the FTC in 2006 over claims linking supplements to cancer treatments. Under the consent decree, GOL agreed not to make any health statements about its products without the support of “competent and reliable scientific evidence.”
In August 2011, the FTC initiated a contempt proceeding claiming that GOL had violated the consent decree because GOL did not have competent and reliable evidence for its OceansKids and Vitamin Code RAW calcium supplements and the Grow Bone System. In its defense, GOL claimed it had adequate substantiation for the claims according to an independent expert opinion that GOL’s products offered the claimed benefits. FTC’s expert disagreed with GOL’s expert and claimed that the evidence was flawed and did not constitute competent and reliable evidence. The Court held that competent and reliable evidence does not mean “uncontroverted proof” and denied the FTC’s motion.
Whether this decision means that FTC may need to reconsider what constitutes “competent and reliable” scientific evidence remains to be seen. An important difference between contempt proceedings and FTC enforcement actions is that in the context of civil contempt of court, the evidentiary standard is “clear and convincing evidence” – a higher standard that is more favorable for the defendant than the “preponderance of the evidence” standard that applies in other FTC enforcement actions. Moreover, in the context of contempt, all ambiguities are resolved in favor of the defendant.
Nevertheless, the Court’s ruling suggests that a company which hires an independent expert to testify that the expert earlier determined that there was competent and reliable scientific evidence to support certain claims may have a chance to beat the FTC. Moreover, the ruling suggests that claims may be substantiated based on published research; companies do not need to perform their own clinical studies.
The Court also rejected other arguments by the FTC regarding other product claims. For instance, the Court refused to find GOL in contempt for allegedly violating a provision in the consent decree by making comparisons between its products and a competitor’s products. The Court concluded that interpreting the consent decree in that fashion would be unlawful because it would make that provision of the consent decree into an “obey the law” provision, which courts cannot do.
Although the ruling does not say so specifically, this decision resembles the Lane Labs decision, i.e., it may have been a result of less than clear language in the consent decree (see our previous post here). Since the Lane Labs decision in 2009, the FTC has included more specific substantiation provisions in some of its order reducing the likelihood of similar decisions.