Markets Wired

A federal judge has ruled in favor of the Federal Trade Commission, finding supplement marketer Lane Labs-USA Inc., and its president Andrew Lane in contempt of a court order that bars them from making deceptive health claims.

 In 2000, the FTC originally charged Lane Labs with making unsupported and false claims that BeneFin and Skin Answer, a shark cartilage product and a skin cream, could prevent, treat, or cure cancer, and were clinically proven to do so.  Lane Labs and Andrew Lane settled the charges by agreeing to a court order that barred them from making unsupported health claims about any food, drug, or dietary supplement.

In 2007, the FTC filed civil contempt charges against the defendants alleging that they violated the 2000 order based on their advertising and marketing of AdvaCAL, a calcium supplement the defendants touted as vastly superior to competing calcium products and prescription drugs used to treat osteoporosis.  The charges were filed in the U.S. District Court for the District of New Jersey.

The district court ruled last month that the defendants violated the 2000 order by making unsupported claims that AdvaCAL is three-to-four times more absorbable than other calcium supplements, and distorting the results of tests and studies on AdvaCAL and competing calcium supplements.  The district court also rejected the defendants’ claim that they substantially complied with the order, because their violations were not merely technical or inadvertent.

The recent decision follows an October 2010 ruling from the Third Circuit Court of Appeals overturning the district court’s original denial of the FTC’s contempt motion.  The appeals court determined that the defendants had violated the order by making unsupported claims that AdvaCAL was comparable or superior to prescription drugs.  The appeals court then   sent the case back to the district court, which ruled last month that the defendants were in contempt.  The district court will rule later on the amount of monetary damages for which the defendants are liable.

The FTC has more information on this topic for consumers.  See Miracle Health Claims: Add a Dose of Skepticism.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook and follow us on Twitter.

(FTC File No. 982 3558) (Civ. No. 00CV3174)