A federal court in Florida has denied the Federal Trade Commission’s (FTC’s) request that it modify a stipulated final order resolving a 2006 dispute with Garden of Life, Inc. over purportedly unsubstantiated representations that its products could treat a range of serious diseases and their symptoms. FTC v. Garden of Life, Inc., No. 06-80226 (U.S. Dist. Ct., S.D. Fla., filed May 25, 2012). The parties had agreed that the company could make such claims if supported by “competent and reliable scientific evidence,” defined in the stipulated final order as “tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”
Claiming that the company was continuing to deceive consumers and that “the Stipulated Final Order has failed to achieve its intended purpose of protecting consumers from the Defendants’ deceptive marketing,” FTC sought to modify the order by imposing a $25 million performance bond on the company to ensure future compliance, as well as requiring “two adequate and well-controlled human clinical studies for all absolute or comparative claims about the bone and cognitive health benefits, efficacy, performance, safety, or side effects of [Garden of Life’s] products.”
The court decided to apply a “significant change in factual circumstances” standard to determine whether it had the authority to modify a consent decree and, under that standard, found that it did not. The court disagreed with FTC that consent decrees have overarching purposes (i.e., to protect consumers); rather, the court said that the agreement’s objective in this case was to enjoin the company from making representations without competent and reliable evidence and misrepresenting the “existence, contents, validity, results, conclusions, or interpretations of any test or study.” According to the court, FTC was essentially seeking to re-define the term “competent and reliable scientific evidence.” Because “it should have been foreseen that the Parties may disagree in the future about what constitutes competent and reliable scientific evidence,” the court ruled that a significant change in factual circumstances had not occurred.