Earlier this month, we covered the decision by the National Advertising Division of the Council of Better 
Business Bureaus (NAD) to refer two leading brands to the Federal Trade Commission (FTC). Since 
then, NAD has referred two more cases to the FTC because marketers declined to participate in the selfregulatory process.
 
GreenFiber, LLC a manufacturer of cellulose insulation, declined to participate in the review of 
“environmentally-friendly,” “natural,” “non-toxic,” and comparative fire resistance claims in response to a 
competitor challenge. The challenger argued that GreenFiber’s product name and pervasive green 
imagery, in conjunction with its “environmentally-friendly” claims, constituted a general environmental 
benefit claim. It further contended that GreenFiber’s product was not “natural” or “non-toxic,” in light of 
numerous chemicals added to the newsprint source material and flame retardants added to the product. 
The challenger also asserted that GreenFiber lacked proper testing to substantiate its claim that 
GreenFiber cellulose insulation products are “Proven 57% More Fire Resistant” than fiberglass insulation.
 
GreenFiber urged NAD not to consider the challenger’s claims. It represented that it had already 
committed to discontinuing or making unspecified modifications to several of the challenged claims. 
GreenFiber also contended that the challenger’s objections to its “fire resistance” claims were frivolous 
and argued that the fire resistance issue was of such a technical character that NAD could not conduct a 
meaningful analysis. Finally, the company asserted that its use of the “GreenFiber” trademark in its 
marketing materials was appropriate and not an unlawful general environmental claim.
 
NAD observed in its case report that GreenFiber had not agreed to modify or discontinue all of the 
challenged claims, including the use of its trademarked “GreenFiber” name, and it had also refused to 
modify or discontinue its fire resistance claims. On the trademark issue, NAD noted its position that 
registration and promotion of a trademark do not obviate the need for the advertiser to have a reasonable 
basis to use the trademarked expression when it appears as an advertising claim. NAD also rejected 
GreenFiber’s claim that NAD could not conduct a meaningful analysis of its fire resistance testing. In its 
press release, NAD cited GreenFiber’s intention to continue using two of the claims challenged in its 
decision to refer the matter to the FTC.
 
In the second matter, the Council for Responsible Nutrition (CRN) challenged claims made in Internet 
advertisements by a marketer of dietary supplements for its raspberry ketone drink. The CRN was 
especially concerned that some of the challenged claims implied that the product might be used to 
mitigate, treat, cure, or prevent disease. Because the marketer did not respond to NAD’s inquiry, 
it referred the matter to the FTC.
 
In both cases, the marketers made claims in areas (“green” claims and dietary supplements) of 
tremendous interest to the FTC. Given NAD’s recent willingness to refer matters to the FTC, marketers 
may be wise to consider whether participating in the self-regulatory process, and possibly modifying or 
discontinuing claims, is preferable to facing an FTC investigation and possible consent decree.
 
Click here to read NAD’s press release in the GreenFiber matter.
 
Click here to read NAD’s press release in the raspberry ketone matter.