Stay ADvised: What's New This Week, July 12
In This Issue:
- NAD Rejects Jurisdictional Challenge to Neutrogena's Decade-Old Survey and #1 Derm-Recommended Claim
- A Hearing Aid by the Same Name Is Decidedly NOT a Hearing Aid, Regardless of Disclosures
- Plaintiff Crabby About Red Lobster's "Sustainability" Claims
- Defendant Says Benzene Hand Sanitizer Suit Is Preempted, Citing FDA
NAD Rejects Jurisdictional Challenge to Neutrogena's Decade-Old Survey and #1 Derm-Recommended Claim
As NAD has frequently noted, doctor-recommended claims carry considerable weight with consumers. At issue in this challenge was whether a 2008 NAD decision finding that Neutrogena's dermatologist recommendation survey was sufficiently reliable to support a "#1 Dermatologist Recommended" claim barred the self-regulatory agency's consideration of related claims made in 2020. NAD held it did not.
The instant matter came before NAD following a challenge to Johnson & Johnson's claims "#1 Dermatologist Recommended," "#1 Dermatologist Recommended Skincare Brand," and "#1 Derm Trusted Suncare." The challenger also took issue with advertisements that implied that specific products were the "#1 Dermatologist Recommended" in their individual categories.
In addition to its substantive response, J&J argued that NAD should not exercise jurisdiction over the challenge because NAD had already blessed a similar survey and claim in a 2008 decision (Case #4881). According to J&J, the challenge was therefore governed by NAD's rules regarding reopening, which require a showing of "extraordinary circumstances."
NAD strongly disagreed, stating that:
It is clear that the basis of [the] challenge is a claim being made in 2020, not a claim made in 2008. The advertiser could not support a claim made in 2020 with a survey conducted in 2008, because even if the methodology and protocol were identical, the participants, products on which the recommendations are based, data collected, and conclusions drawn from that survey are new. NAD also considered the nature of the claim in reaching this conclusion. A "#1 Dermatologist Recommended" claim is not the same type of claim as a claim about a product attribute that remains unchanged over the years.
A "#1 Dermatologist Recommended" claim is supported by collecting dermatologist recommendations that show that the product is recommended over competing products in the marketplace, a dynamic skin care space that constantly changes and evolves. Not only do the products change, the recommendations of medical professionals can also change and evolve as time progresses. The challenge did not arise months or even years after Unilever's  challenge, but more than a decade later. NAD's conclusion that a 2008 "#1 Dermatologist Recommended" claim was supported is not a determination that the claim is supported more than 10 years later. The current claim is based on a survey that has different products, different categories, and different dermatologist recommendations.
Delving into the substantive concerns, NAD first recommended that J&J discontinue the claims "#1 Dermatologist Recommended" and "#1 Dermatologist Recommended Skincare" because the survey evidence presented did not address these specific claims. NAD further found that a number of executions implied that a Neutrogena product (or the Neutrogena brand) was itself "#1 Dermatologist Recommended," where the evidence did not support those messages.
With respect to the claims "#1 Dermatologist Recommended Skincare Brand" and "#1 Dermatologist Recommended Brand," NAD held that the survey was not sufficiently reliable to support J&J's claims. NAD primarily focused on two concerns.
First, NAD held that the proffered survey was susceptible to undercounting of dermatologist recommendations. Here, the challenger presented evidence that the market has changed since 2008 with the development of new, specialized product categories. Contrary to J&J's arguments, NAD found that the survey instructions did not support J&J's argument that dermatologists would have combined and recorded specialized products in allegedly broader categories.
Second, NAD found that dermatologists may have double-counted certain recommendations, an issue NAD stated was exacerbated by the fact that J&J's survey included some specialized categories but omitted others.
J&J is appealing from NAD's decision on the jurisdictional issue and with respect to the "#1 Dermatologist Recommended Skincare Brand" claim. DWT represents the challenger.
This challenge reinforces the established principle that advertisers must take market changes—including the introduction of new competitors, products, and product categories—into account when making claims.
A Hearing Aid by the Same Name Is Decidedly NOT a Hearing Aid, Regardless of Disclosures
NAD practitioners will not be surprised to learn that a contradictory disclosure cannot cure a misleading message—at issue here, one generally directed to a more vulnerable population of consumers. Recent statistics suggest that hearing loss is, perhaps not surprisingly, particularly common in older persons, many of whom are reluctant to acknowledge it.
As part of its routine monitoring program, NAD looked into claims made by rechargeable hearing aid company Audien LLC, which markets products touted as a lower cost alternative to hearing aids. Advertiser's products, however, did not match the FDA's definition of "hearing aid." NAD's challenge concerned advertising claims that Audien's "rechargeable hearing aids" sell for "$89/pair*," that they contain "similar technology to $5,000 hearing aids," and that they "can be used for Tinnitus management."
In response, Audien argued that the disclosures included in the ad clearly lay out the limitations to its claims, including the nature of the product itself. NAD concluded that the company was not in fact marketing a hearing aid product, and it could not rely on lengthy disclosures to let the consumer know the actual nature of what they were buying. NAD recommended the company discontinue its claims because they communicated a misleading impression; the disclosures directly contradicted the main claims; and—as noted—a contradictory disclosure cannot cure an otherwise misleading claim.
To delve a little deeper, Audien claimed that although it used the term "hearing aid … in a manner consistent with the FDA's definition," it argued that (i) it had disclosed that the product did not match the FDA's official definition of medical devices; (ii) it did not represent that the product was a medical device regulated by the FDA; and also (iii) it clarified that the product contained "similar technology to $5,000 hearing aids" and thus was not claiming "its technology is the exact same technology as that found in expensive prescription 'hearing aids.'" Audien also attempted to qualify the claim that the product could be used for tinnitus management by adding in the disclosure that it was "NOT claiming" that its product could cure tinnitus.
NAD was not convinced. It did not help matters that the disclosures were hardly conspicuous, said NAD, featuring in one case a "barely visible" asterisk of black ink on a black background.
The same rules apply to all advertisers, whether they are in a market segment where challenges are frequent or not. Advertisers should remain mindful of NAD's self-monitoring capacity, as one cannot predict what will come into focus simply because it touches on an area of NAD interest.
Plaintiff Crabby About Red Lobster's "Sustainability" Claims
Riding on the wave of recent false advertising litigation targeting environmental and sustainability claims, a class action lawsuit alleges that seafood chain Red Lobster falsely markets its seafood as sustainable when, in fact, parts of the menu are procured using environmentally harmful and inhumane practices.
More specifically, the suit targets claims on the menu, including "Seafood With Standards" and "Traceable. Sustainable. Responsible," as well as the text:
These are more than just words on our menu—it's our promise that all of the seafood we serve is sourced to the highest standard. Because…we believe it's our responsibility to protect and preserve our oceans and marine life ….
The menu then provides a link to additional information regarding Red Lobster's sustainability program.
The California lawsuit alleges that Red Lobster violated the state's Unfair and Deceptive Acts and Practices Act, the False Advertising Law (FAL), and the Unfair Competition Law (UCL). Plaintiff Dezzi Rae Marshall alleges that reasonable consumers would expect Red Lobster products to be "sourced sustainably in accordance with the highest environmental and animal welfare standards."
It further alleges that (a) the Maine lobster and shrimp items the restaurant sells are sourced from fisheries that use "environmentally destructive practices" that threaten the endangered North American right whale; and (b) the shrimp are sourced from suppliers in regions that plaintiff avers use harmful tactics. Per plaintiff, these claims are particularly troubling because consumers mostly lack the knowledge to determine whether or not the seafood they consume is sustainable and so take Red Lobster's marketing at its word.
Accepting that these are merely allegations, they illustrate the problems that face other advertisers who accurately want to highlight their efforts in a world where sustainability is a marketing buzzword and standards do not yet exist. Fishing is somewhat unique in that there are a number of third-party organizations that have opined on what it means to be "sustainably sourced." We can expect further activity in the sustainability space, including activity as companies hope to have their definitions sanctioned by others.
Defendant Says Benzene Hand Sanitizer Suit Is Preempted, Citing FDA
A company accused of selling hand sanitizer with high levels of carcinogenic benzene, while marketing itself as "natural," has fired back at the claims, arguing that the FDA preempts such a suit. The matter is part of the uptick in litigation alleging false advertising of both sunscreens and, more recently, hand sanitizers containing benzene following reports that benzene is present in multiple products.
The instant lawsuit alleged that Artnaturals markets and sells hand sanitizer containing benzene at levels far above those authorized by the FDA, which normally does not allow the sale of hand sanitizers with benzene but authorized the emergency sale of products containing a slight amount of the substance during the pandemic.
According to plaintiff's complaint, filed in April 2021 in California federal court, Artnaturals' hand sanitizer product far exceeds even the emergency levels of benzene allowed by the FDA. Plaintiff Lauren Slaughter also alleged that Artnaturals falsely marketed itself "as a purveyor of natural and toxin-free personal-care products" safe for repeated use and for children.
Artnaturals' recently-filed motion to dismiss contends that Slaughter's claims are preempted by the Food, Drug and Cosmetic Act (FDCA). Artnaturals further contends that plaintiff's suit is an attempt to require Artnaturals to include information on its label about benzene beyond that which the FDA requires, an attempt that is also preempted by the FDCA, argues defendant.
Because the FDA is currently still looking into the safety and labeling of hand sanitizers, plaintiff's claims raise questions that "must first be answered by the FDA before they can be resolved by the court," claims Artnaturals. Moreover, the defendant argues, the question plaintiff raises regarding what constitutes "natural" is "the kind of question best left for the FDA to resolve."
Artnaturals also asserts that Slaughter may not sue on behalf of plaintiffs outside of California (the state where she is suing) and Alabama (the state where she is from and where she bought the hand sanitizer). Finally, Artnaturals contends that Slaughter's attempt to bring a claim under California's Unfair Competition Law (UCL) should not go forward because the complaint concerns hand sanitizers, which no reasonable consumer would think are "natural," as plaintiff alleges, since they are known to contain alcohol and antiseptic ingredients.
This is an evolving area and the resolution of these cases will provide guidance for preemption claims as well as, potentially, what de minimis means for products containing "small" amounts of arguably dangerous toxins.