FTC's Substantiation Standards Take Center Stage In Basic Research Case

Previously published by DRMA Voice on July 9, 2012,

It has been a busy couple of months in court for the Federal Trade Commission (FTC). Recently, the FTC won on the merits but saw an Administrative Law Judge reject its proposed substantiation standard in the Pom Wonderful case. In another contempt case (Daniel Chapter One) filed in the federal District Court for the District of Columbia, the FTC also won on the merits but the judge then gave the defendants two weeks to purge their order violations before imposing any civil penalty. Not surprisingly, the defendants availed themselves of that opportunity.

There is yet another declaratory judgment/contempt battle unfolding in federal district court in Utah, Basic Research, et al. v. Federal Trade Commission. In that case, the judge's recent ruling on Basic Research's motion for partial summary judgment helps demonstrate why the FTC is so eager to modify its definition of "competent and reliable scientific evidence." The case may also help determine whether the decision in POM is merely a bump in the road or the beginning of a substantial roadblock for the FTC's efforts to tighten its substantiation standards.

Basic Research was subject to a consent order with the traditional definition of "competent and reliable scientific evidence" and asked the judge to determine what standard the company would be held to under that order. Consistent with the order's language, the judge held that any representation is satisfied by "competent and reliable scientific evidence" if it is:

" Based upon expertise of professionals in the relevant area " Conducted and evaluated in an objective...