A federal court in California has determined that the Federal Trade Commis- sion (FTC) is entitled to prevail on its claims that Wellness Support Network Inc. violated the Federal Trade Commission Act by advertising its diabetes supplements as scientifically proven to reduce blood-sugar levels and cause weight loss. FTC v. Wellness Support Network, Inc., No. 10-4879 (U.S. Dist. Ct., N.D. Cal., decided February 19, 2014). The court ordered the defendants to pay restitution of nearly $2.2 million and granted FTC’s request to require regular disclosures to the agency of certain types of information for 20 years.
To order restitution against both owners—a father and daughter—in their individual capacity, the court decided that the daughter of the company’s owner was reckless in her product efficacy representations. In this regard, the court stated, “Robyn Held’s conduct in relying on Robert Held’s judgment as to the scientific validity of the claims made by [Wellness Support] about the Products reflects reckless indifference to the truth or falsity of those state- ments.”The court rejected the company’s claims that its supplements are medical foods not within FTC’s bailiwick and that FTC’s action violated its First Amendment rights. As to the latter, the court stated that manufacturers or sellers of dietary supplements do not have “a First Amendment right to make claims that are false or deceptive.”