FTC Loses Again; Court of Appeals Affirms Lower Court’s Determination that Garden of Life’s Expert Opinion Constitutes Competent and Reliable EvidenceApril 18, 2013
By Riëtte van Laack –
As previously discussed, in 2011, the FTC filed an action against Garden of Life and its owner (collectively “GOL”) asking the District Court to order GOL to show cause why it should not be held in civil contempt.
The case stems from a 2006 settlement the FTC reached with GOL. The consent decree prohibits disease claims unless such claims are substantiated by competent and reliable scientific evidence. The FTC alleged that certain advertising claims subsequently made by GOL were not supported by “competent and reliable evidence.”
GOL retained a consulting firm to evaluate scientific evidence for potential advertising claims. Nevertheless, the FTC’s expert opined that the claims were not substantiated by competent and reliable scientific evidence. GOL’s expert opined that they were. The lower court refused to find that GOL violated the consent decree because the dispute was based on a “battle of the experts.”
The Eleventh Circuit on Monday refused to revive most of the FTC’s claims. Except for one claim concerning certain allegedly false statements GOL had made, the Court affirmed the lower court decision.
The Eleventh Circuit Court of Appeals upheld the lower court's finding that the FTC failed to meet its burden based on conflicting expert testimony. The consent decree defines “competent and reliable scientific evidence” to mean “tests, analyses, . . . and other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedure generally accepted in the profession to yield accurate and reliable results.” In its appeal, the FTC argued that the FTC’s expert was the only one qualified to speak to the substantiation of the claims because the FTC’s expert was an expert in the relevant subspecialty whereas GOL’s expert was an expert in pharmacology and medicine in general. In other words, the FTC sought to narrowly construe the meaning of “professionals in the relevant area.” The Court, however, was unpersuaded by the FTC’s assertion that GOL's consultant expert was not qualified to interpret the results of medical studies and held that the lower court’s interpretation that “professionals in the relevant area” means experts in medicine or pharmacology in general rather than specialists in the given medical subspecialty was reasonable.
Although the Court affirmed the lower court’s denial of the FTC’s contempt motion as to the substantiation issue, it remanded the issue of how to handle GOL’s alleged misstatement in its now-withdrawn ads for Grow Bone System. Apparently, due to a mistake by its consultants, these ads stated that a bone density study had shown double the average increase in density than it actually did. Because the lower court's order did not address that misstatement, the Court lacked a sufficient record to review the issue, and sent the claim back so the lower court could address it in the first instance.
The FTC’s loss in a contempt proceeding against Lane Labs caused FTC to insert more specific substantiation provisions into its consent decrees. The current case could have similar consequences. To reduce the likelihood of similar losses, the FTC could further refine the definition of “competent and reliable evidence” in future consent decrees by seeking to narrow the meaning of “professionals in the relevant area.”