The NAD recently closed two cases on dietary supplement claims. These two cases illustrate two of the three different ways an NAD case might close. The first case involved advertising for Cellfood. See NuScience Corp., NAD Case No. 5931 (Feb. 2016). The NAD, as a part of its routine monitoring, had inquired about claims, such as the following: “By adding 24 drops of Cellfood to your water bottle each day, you’ll clean and detoxify, help to eliminate free radicals and bring oxygen, hydrogen and plant nutrients into your body.” The advertiser, in response to the inquiry, informed the NAD that it had permanently discontinued the identified claims prior to the initiation of the case. Thus, according to its rules, the NAD closed the case entirely. This means that no compliance proceedings will be possible, although an entirely new case could be filed based on the same advertising claims.
The second closed case involved advertising for JuniorSlim, a children’s weight loss product. See Silver Star Brands, NAD Case No. 5918 (Jan. 2016). The NAD had inquired about claims, such as, “Addresses the tendency to comfort eat” and “Maintains healthy energy levels through nutrient absorption.” During the pendency of the case, the advertiser committed to discontinuing the claims. In this instance, although the NAD did not issue a formal decision, it stated that it would treat the claims, “for compliance purposes, as though the NAD recommended their discontinuance and the advertiser agreed to comply.” This is the manner in which the NAD routinely proceeds if an advertiser discontinues claims during, rather than before, a case begins. It means that the NAD could later bring a compliance review.
The NAD issued revised procedural rules on February 1, 2016. A new provision in the rules creates a third way for an NAD case to close. The parties may reach a settlement and agree to notify the NAD in writing of their consent to close. Similar to the situation where claims are discontinued prior to initiation of a case, a case closed on consent of the parties will be closed entirely, without the opportunity for compliance review. However, once again, nothing in rules bars the filing of an entirely new case if the advertiser continues to disseminate the same claims. A new filing fee would be required, though, for entities other than the NAD. Challengers who agree to consent to closure are well-advised to consider requiring, as part of a settlement agreement, that the advertiser pay the new filing fee should a new challenge on the same claims become necessary.