Stay ADvised: What's New This Week, June 20
In This Issue:
- NAD Glum about Glee Gum's "Natural" Claims
- With New Bill, New York State's Got a Ticket to More Transparent Ticket Pricing
- Joint Juice to Pay Up for False Reps After Jury Verdict
- FTC Brings Down Gravity Defyer's Pain Relief Claims
NAD Glum about Glee Gum's "Natural" Claims
The National Advertising Division (NAD) of BBB National Programs has shot down another advertiser's efforts to join the "natural" product trend, finding unsupported chewing gum manufacturer Mazee's claims that its gum was "natural," "made with chicle," and "plant-based."
NAD reviewed the claims challenged by candy and chewing gum rival Perfetti Van Melle USA (maker of, inter alia, Mentos and a number of Italian chewing gum brands). Mazee marketed its Glee Gum as a niche natural chewing gum product.
As a starting point regarding claims that Glee Gum is a "Natural Chewing Gum," made "without preservatives, artificial flavorings, colorings, or sweeteners," NAD found the claims implied that the entire product (rather than a portion of it) was "natural." Although NAD asserted that "natural" may be different from an "all-natural" claim, "consumers could reasonably expect" a claim that a product is "natural" to mean the gum was "free from artificial ingredients, with the exception of a small percentage of the product that does not relate to the function of the product," wrote NAD. This is in keeping with prior NAD decisions.
Mazee's testing demonstrated that its gum base was plant- or animal-based, but the company failed to show that the remaining gum ingredients—which amounted to 80 percent of the gum—lacked synthetic materials. NAD agreed with the challenger that although the gum base may have been made entirely with "biobased" products, there was evidence that chemical changes could have occurred during manufacturing, raising concerns about the possibility of synthetic substances even in the gum base.
NAD came to a similar conclusion regarding Mazee's specific claims that its products are "plant-based." NAD determined that the evidence didn't support this claim because the results of the advertiser's testing did not distinguish between animal- and plant-based sources (albeit both are "natural").
NAD also found that Mazee hadn't met its burden to support its claims that the gum base is "made with chicle," a natural gum from the sap of the Sapodilla tree. Though Mazee submitted a supplier document showing that its gum base is 94% "chicle tree sap," the challenger submitted evidence that the supplier document references a CAS registry number (used to provide unique identifiers for chemical substances) that is different from the CAS registry number for "chicle," "raising serious questions about whether chicle is in fact used."
NAD noted that "nothing in its decision prevents [Mazee] from making appropriately qualified natural or plant-based ingredient claims for parts of the gum other than the gum base, provided that such claims are properly supported and do not imply that the gum base is natural."
NAD did, however, rubber-stamp Mazee's claims that its gum is "plastic-free." First, it disagreed with the challenger that the claim communicates a false and denigrating message about conventional chewing gum. The advertiser didn't mention any competing gum, and even in a side-by-side comparison, Mazee would have the right to openly compare its ingredients to those of a competitor. Further, the parties' testing did not show the presence of plastics.
Finally, NAD found that claims that Glee Gum is "eco-friendly" reasonably conveyed an unsupported message that the gum is "broadly environmentally friendly." The only evidence of anything "eco-friendly" was the recyclable product box, which was not enough to support the unqualified "eco-friendly" claim.
This case shows how carefully NAD parses "natural" and "plant-based" claims and very clearly provides NAD's views regarding the requisite level of proof. NAD continues to be the primary guidance on "natural" claims, given that FDA has not defined the term. Nonetheless, "natural" claims remain the darlings of the consumer class action bar. The ultimate message, advertisers should tread carefully.
With New Bill, New York State's Got a Ticket to More Transparent Ticket Pricing
New York State is poised to pass a new law that will make it harder for ticketing companies to conceal vital information about ticket prices, in a bid to curb the ticketing industry's persistent lack-of-transparency problem.
If signed into law by New York Governor Kathy Hochul, Senate Bill S9461 will introduce a number of measures aimed at making it harder for ticketing companies to hide fees, and easier for consumers to get the bottom line on a ticket price. It also aims to halt some of what are widely considered the most egregious practices of the ticketing industry—e.g., charging a fee for delivery of online tickets.
Ticket sellers will have to clearly and conspicuously disclose all ticket costs, inclusive of any additional fees, at the start of the buying process (rather than at the end where it generally resides currently). The law will bar any portion of the ticket price from being false or misleading, and require that the ticket price stay the same from start to finish.
The law also mandates that resellers clearly disclose that they are resellers, the original price they paid for tickets, and that the price charged by the reseller may exceed the original ticket price. It also makes it illegal to sell tickets that were originally offered for free. Though it allows ticketing companies to charge a reasonable cost for physical delivery of tickets, the law does away with fees for tickets delivered electronically.
Bill sponsor and New York State Senator James Skoufis told media sources that other proposed provisions did not make it into the bill, such as adjustments to high fees and a bar on holdbacks, whereby promoters hold on to tickets not publicly available for purchase.
"Upfront pricing will provide for easy comparison shopping. Platforms that are tucking these massive fees into the very end of the transaction and having them sneak up on consumers are going to lose business when buyers see which platforms are out of whack and dramatically higher," said Senator Skoufis.
If the bill makes its way into law, it may signal further—related—legislation in New York and elsewhere.
Joint Juice to Pay Up for False Reps After Jury Verdict
After a two-week trial and two hours of deliberations, a jury unanimously found Premier Nutrition Corporation, the makers of Joint Juice, liable for misleading consumers about its glucosamine-based drinks marketed to help with joint issues. The jury also found that Premier Nutrition engaged in materially deceptive and misleading advertising under New York law and awarded class plaintiffs $1.49 million in actual damages.
The second amended complaint filed in March 2022 (the first was filed in 2016) alleged that Premier Nutrition falsely advertised the health benefits of Joint Juice, and that its "extensive" and "widespread" nationwide marketing campaign falsely claimed the product could improve joint health and alleviate joint pain and that it would "nourish cartilage, lubricate joints, and improve joint comfort."
Contrary to the advertising, claimed plaintiffs, Joint Juice didn't achieve any of these promised results, and neither did the glucosamine hydrochloride and chondroitin ingredients. Plaintiffs alleged that scientific studies repeatedly showed the ineffectiveness of these ingredients in providing the benefits Premier Nutrition claimed, that the company knew that these studies showed its product would be ineffective, and that they nevertheless continued to advertise that Joint Juice worked.
During the trial, jurors were presented with evidence that a former top executive considered paying half a million dollars to conduct a study looking into the benefits of glucosamine, but would only disclose the results if they were positive. Jurors also heard testimony from the same executive that she knew the drinks' health benefits were limited.
Other evidence that likely swayed jurors was that Joint Juice paid retired NFL quarterback Joe Montana a hefty sum to appear in commercials saying that the drink eased his joint pain even after the company knew that studies had shown glucosamine wasn't effective at treating joint pain. Plaintiffs' counsel also made the case that though it knew that the product's efficacy was limited, Premier Nutrition represented to California regulators that Joint Juice was an over-the-counter drug (not subject to the state's bottle redemption laws).
The almost $2 million actual damages award may not be the end of the story on damages either, as plaintiffs have filed a request to impose statutory damages under New York law, which would bring the damages award up considerably, to around $135 million.
Some may say the jury is still out on whether there's any scientific basis to claims that glucosamine hydrochloride and chondroitin benefit joint health, but in this case, plaintiffs successfully argued that the science shows the substances to be ineffective at helping with joint issues. Either way for advertisers, the science is inconclusive enough to serve as a cautionary tale about adequacy of substantiation and the potential costs of not getting it right.
If plaintiffs are awarded statutory damages, the case will significantly top the monetary fallout from the $53 million settlement paid for by Reckitt Benckiser in what was then called the "largest dietary class action settlement ever reached" over allegations the company falsely advertised its Move Free supplement improved joint health.
FTC Brings Down Gravity Defyer's Pain Relief Claims
The Federal Trade Commission (FTC) has filed a complaint in federal court alleging that pain-relieving shoe company Gravity Defyer isn't defying anything but federal law by falsely advertising that its shoes help with joint and body pain relief.
The California-based company markets its shoes to Americans who suffer from arthritis, diabetes, and other pain-related conditions. Via its website, its call center, its stores and other retailers, including The Walking Company and Hammacher Schlemmer, Gravity Defyer sells over 100 styles of shoes—priced at more than $100—as clinically proven to relieve pain.
According to the FTC, the company deceptively claims that its shoes can significantly relieve knee, back, ankle and foot pain. The Commission says it wants to hold the company and its owner Alexander Elnekaveh accountable for misleading their mostly older clientele about the ability of the shoes to reduce issues related to plantar fasciitis, joint pain, and heel spurs.
The FTC alleges that Gravity Defyer's claims that its shoes are clinically proven to relieve pain are not backed up by competent and reliable scientific evidence. Though the company cites a study in its ads in support of its claims, the FTC alleges that this study has "substantial flaws," including insufficient size, duration, and a lack of double blinding. Further, the study relies only on self-reported pain levels and fails to consider crucial comparative data. Perhaps most importantly, the study "was only designed to measure knee pain," yet Gravity Defyer uses the study to back up claims about pain in other parts of the body.
Owner Elnekaveh is also charged with violating the terms of a 2001 FTC order that barred him from making allegedly deceptive advertising claims lacking scientific support. The order stems from an administrative complaint the FTC filed in which it alleged that while running his then-company Gadget Universe, Elnekaveh made claims about an automobile fuel line that weren't backed up by scientific evidence.
In that 2001 order, he was specifically barred from using misleading testimonials. Now, the FTC alleges that Gravity Defyer and Elnekaveh promoted the shoes with user testimonials that represented the ordinary experience of people using the product, though these claims were not substantiated by competent and reliable scientific evidence.
For Gravity Defyer and Elnekaveh, the journey to the FTC began at the National Advertising Division (NAD). The NAD will refer a matter to the FTC when a company refuses to comply with the NAD process, as it did here when in 2021 the company initially agreed to play along with a compliance inquiry, but then recanted.