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FTC claims victory in Lane Labs case, but is berated by judge for its “fundamentally unfair” approach

1 commentBy Elaine Watson , 15-Dec-2011
Last updated on 15-Dec-2011 at 04:22 GMT2011-12-15T04:22:23Z

Lane Labs president Andrew Lane founded the company in 1994
Lane Labs president Andrew Lane founded the company in 1994

A federal judge has found supplement marketer Lane Labs USA Inc in contempt of a court order barring it from making deceptive health claims, but has also heavily criticized the Federal Trade Commission’s (FTC’s) handling of the case.

New Jersey-based Lane Labs, which was issued with a court order barring it from making unsupported health claims about its wares in 2000, was accused of violating the order in 2007 by the Federal Trade Commission (FTC).

The FTC filed civil contempt charges against Lane and its president Andrew Lane in the US District Court in New Jersey alleging it had violated the order by making unsubstantiated claims about its supplements.

Misrepresented test results

Specifically, the FTC alleged that Lane violated the order by claiming that its Fertil Male supplement enhanced male fertility and that calcium supplement AdvaCAL was superior to other calcium products and on a par with, or superior to, prescription drugs used to fight osteoporosis.

According to the FTC, the defendants’ claims that Fertil Male improved male fertility were based on “flawed scientific studies”, while they had also allegedly “misrepresented test results and studies involving AdvaCAL and other calcium products”.

Unsubstantiated claims

The district court initially denied the contempt motion after a five-day hearing, prompting the FTC to take the case to the Third Circuit Court of Appeals, which overturned the denial and agreed with the FTC that Lane Labs had violated the order by making unsupported claims about AdvaCAL.

The case then returned to the New Jersey district court, which last month ruled - four years after the FTC first filed charges - that the defendants were in contempt of the order.

In his ruling, which you can read here – judge Dennis Cavanaugh said he had been asked to focus on whether AdvaCal is much better absorbed than other calcium supplements, whether Lane had distorted research about AdvaCal and the extent to which its alleged violations of the order were “technical” or “inadvertent” (which would justify a defense of ‘substantial compliance’).

In all cases, he found against the defendants.

Judge: FTC’s six year delay in bringing motion is ‘fundamentally unfair’

However, he also criticized the FTC for taking so long to file charges against the firm, adding: “The Court remains highly concerned with the FTC’s delay in bringing this suit.

“Defendants disclosed many of the statements at issue in 2001. The FTC’s failure to act on these statements until January of 2007 is bewildering.

“This extensive delay understandably led Defendants to believe that they were in compliance with the Final Order, and for the FTC to bring its motion after six years seems to the Court to be fundamentally unfair.”

But he added: “This is not, however, the relevant inquiry at this time.”

Damages details to follow …

The district court will rule on damages to be paid by the defendants shortly.

NutraIngredients-USA has been unable to get hold of Mr Lane or another company representative for comment prior to publication.

1 comment (Comments are now closed)

FTC practices gangsterism

The delay by FTC in addressing the health and product claims of Lane Labs speaks for an agency that wants big penalties and front-page headlines. It allows specious claims to continue until the FTC can gain big financial penalties, which the agency collects for itself. This is mafia-style government. I have been informed by FTC directly they will not take action until they receive 200 complaints. The FTC has to be paid off as a form of protection money, hence my assertion of mafia-like tactics.

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Posted by Bill Sardi
15 December 2011 | 18h362011-12-15T18:36:23Z

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