Claim Substantiation

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In a lawsuit that will likely be closely watched, Xlear, Inc.—a Utah-based manufacturer of xylitol-based hygiene products—has filed a federal lawsuit against the Federal Trade Commission (FTC) and its chairman, Andrew N. Ferguson. The suit, filed June 18 in the U.S. District Court for the District of Utah, seeks declaratory relief challenging the FTC’s long-standing requirement that advertisers have substantiation to prove the claims made in their advertising.

Xlear’s central argument is that the FTC’s “substantiation” standard, particularly as it applies to health-related claims, exceeds the agency’s statutory authority under Sections 5(a) and 12 of the FTC Act. The company contends that the Act prohibits only false or deceptive statements—not unsubstantiated ones—and that requiring marketers to possess substantiation effectively imposes a standard not found in the text of the statute. The complaint points to the FTC’s requirement that health-related claims be backed by randomized controlled trials (RCTs) as particularly onerous.Continue Reading Xlear v. FTC: Utah Company Files Challenge to Long-standing FTC Substantiation Requirements Post-Loper

On April 4, the California Department of Resources Recycling and Recovery (CalRecycle) published its final material characterization study report, starting the clock for compliance with Senate Bill No. 343 (SB 343), also known as the “Truth in Recycling” law. Under the law, marketers have 18 months from the date the study findings are published to comply with the requirements.

In 2021, California enacted SB 343, which prohibits the use of chasing arrows and any implied “recyclable” claims on products and packaging unless certain criteria are met. Specifically, SB 343 limits when a company can make a recyclable claim for a product or packaging to situations where:Continue Reading Compliance Countdown for California’s “Truth in Recycling” Law Begins

The National Advertising Division (NAD) recently issued a series of decisions addressing influencer and third-party marketing. The NAD is a self-regulatory body that assesses the truth and accuracy of claims made in national advertising and refers matters to the Federal Trade Commission (FTC) if an advertiser refuses to comply with its decisions.

Influencer’s Lash Claims

NAD reviewed videos posted on social media featuring a teen influencer self-described as a brand ambassador for the cosmetic company NuOrganic. The influencer made express and implied claims about NuOrganic’s eyelash serum, including “naturally grown long lashes” and “safe for young eyes.” NuOrganic argued that it could not control statements made by the influencer, but that it does monitor posts for content that may violate its guidelines. However, NAD investigated and identified certain Instagram posts where NuOrganic and the influencer had tagged each other about the same product, making substantially similar claims. NAD concluded these posts lacked the disclosures needed to inform viewers about the material connection between the influencer and NuOrganic. NAD recommended that the company take immediate steps to discontinue the videos containing the unsupported claims.Continue Reading National Advertising Division Targets Celebrity, Influencer, and Third-Party Marketing in Recent Decisions

On March 10, the Department of Justice (DOJ) moved to drop a lawsuit filed on behalf of the Federal Trade Commission (FTC) against Xlear, which marketed a line of over-the-counter saline nasal spray products touted to treat and prevent COVID-19 and similar viruses.

The DOJ filed the lawsuit in October 2021, alleging that Xlear violated the FTC Act and the COVID-19 Consumer Protection Act by disseminating claims that the FTC argued were false and misleading.

Despite a July 2020 warning from the FTC that the company’s COVID-19-related claims violated the FTC Act, Xlear continued to make various COVID-19 treatment and prevention claims, including that in vitro studies conclude that their sinus “nasal spray is ‘an effective…and replicable means to deactivate SARS-CoV-2…to an undetectable amount of infectious virus.’”Continue Reading DOJ Dismisses Lawsuit Over COVID Nasal Spray False Advertising

Environmental claims are a powerful tool for companies to demonstrate their commitment to sustainability and connect with values-driven consumers. However, these claims are facing increased legal scrutiny, as governments and regulators aim to close the gap between companies’ climate pledges and their corporate actions.

The recent case of People of the State of New York v. JBS highlights the growing risks associated with sustainability and environmental advertising. Filed after the National Advertising Review Board (NARB) recommended that JBS discontinue certain sustainability claims that formed the basis of the suit, this case underscores how environmental claims can invite challenges from multiple fronts, including federal and state regulators, self-regulatory entities, competitors, and consumers, and how courts are wrestling with where the lines are for such claims.

During a hearing on January 10, 2025, the Supreme Court of New York dismissed the New York attorney general’s lawsuit against JBS USA Food Company and JBS USA Food Company Holdings (JBS). But the court is allowing the AG to file an amended complaint by April 10—90 days from the hearing—to address deficiencies in the complaint. If the AG does not file an amended complaint by that deadline, the court will dismiss the case with prejudice.Continue Reading New York Court Dismisses Suit Against JBS but Allows Attorney General to File Amended Complaint

Last month, the Federal Trade Commission (FTC) announced an enforcement action against Evolv Technologies, alleging that the company made deceptive claims about the capabilities of its AI-powered security screening system, including in school settings. Among other allegations, the complaint alleged that Evolv advertised that its systems could reliably detect all weapons, but the systems consistently failed to detect guns and knives and routinely gave false alarms.

The FTC also announced a proposed settlement. Interestingly, the two sitting Republican commissioners, one of whom will likely be the acting chair after January 20, disagreed on the scope of the proper remedy under Section 13(b) of the FTC Act. While commissioners Andrew Ferguson and Melissa Holyoak both supported the FTC’s settlement with Evolv, they disagreed on the FTC’s authority to provide relief in the form of contract cancellation for school customers.Continue Reading The Dueling Views of FTC Commissioners Ferguson and Holyoak on the Scope of Agency Authority

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate the legal risk of campaigns and promotions. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of Understanding False Advertising Claims in this week’s episode.

The first rule of advertising compliance is that advertising must be truthful and not misleading to consumers. In addition, all material advertising claims must be substantiated. When competitors’ ads do not meet those tests, there are numerous venues in which they may be challenged. When challenging competitors’ advertising, it is critical to understand the different ways in which an advertising claim can be false or misleading.

Types of false advertising claims:Continue Reading Understanding False Advertising Claims: An Excerpt from the Advertising Law Tool Kit

Episode 9 of Venable’s Ad Law Tool Kit Show, Season 2,is now available. Listen to “Understanding False Advertising Claims, Part 1: Litigation” here, or search for it in your favorite podcast player.

The first rule of advertising compliance is that advertising must be truthful and not misleading to consumers. All material advertising claims also must be substantiated. There are many venues in which a business can challenge a competitor who fails to follow those rules. What are the different ways in which an advertising claim can be false or misleading?

In the first of two episodes about false advertising claims, Venable partners Liz Rinehart and Roger Colaizzi discuss the many types of false advertising claims and how to be sure your business can avoid them.Continue Reading Listen to Venable’s Ad Law Tool Kit Show Podcast – “Understanding False Advertising Claims, Part 1: Litigation”

Consider these six options for challenging your competitors’ advertising and marketing claims—each with its own advantages and disadvantages.
Continue Reading Event in Review: Why Can They Say That, but I Can’t? How to Challenge Your Competitors’ Advertising While Avoiding Being Targeted

Venable’s Advertising and Marketing Group hosted its 10th Advertising Law Symposium on March 21 in Washington, DC. The group welcomed in-house counsel, advertising executives, and marketing professionals for a full day of sessions on the latest developments in advertising law and what to watch for soon.

Here are some highlights:

Patchwork of Privacy Laws Makes Compliance a Challenge

Frequent data breaches and incidents like the 2018 Cambridge Analytica scandal have increased criticism of the United States’ approach to regulating privacy through a patchwork of federal and state laws and industry self-regulatory codes. But even harsh critiques have not been enough to spur Congress to pass a preemptive privacy law that would supersede the jumble of state laws and regulations and streamline things. Partner Rob Hartwell and associate Allie Monticollo said marketers and advertisers should watch what’s happening in the states and mitigate risk accordingly.Continue Reading Event in Review: 10th Advertising Law Symposium