A recent action by the National Advertising Division (NAD), a self-regulatory arm of the Better Business Bureau, illustrates that advertisers who participate but decline to be bound by an NAD Decision can expect to be referred to the Federal Trade Commission (FTC). The NAD recently announced that it referred advertising claims made by dietary supplement company Creekside Natural Therapeutics (Creekside) to the FTC for further review, following a challenge by the Council for Responsible Nutrition (CRN).

Voluntary Process Backed by Prospect of FTC Referral

The NAD is a voluntary industry dispute resolution body and a division of the Better Business Bureau. NAD provides a forum by which competitors or others can challenge advertising largely on the question of what claims are conveyed and if the advertiser has appropriate substantiation.

Once a dispute is initiated at NAD, should the challenged advertiser choose to participate, both parties submit briefs in writing and meet with the NAD before it issues a formal written decision. If recommendations for changes to advertising are made by NAD, the advertiser must state whether it “(1) agrees to comply with NAD[‘s] recommendations, or (2) will appeal all or part of NAD[‘s] decision to the [National Advertising Review Board (NARB)].” Indeed, NAD procedures require that the Advertiser’s Statement (that appears with the final Decision) initially state whether the Advertiser accepts NAD’s recommendations or will file an appeal. Advertisers who fail to submit an Advertiser’s Statement are treated as having declined to comply and may be referred to the FTC for further review and potential enforcement. Several FTC enforcement actions were initiated from an
NAD referral.

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Photo of Steve Steinborn Steve Steinborn

Partner, Washington, D.C.

Steven Steinborn literally wrote the book on food labeling as a principal author of the U.S. Department of Agriculture’s (USDA) labeling guide. On top of that, he offers clients 28 years of experience in guiding informed business decisions, taking into…

Partner, Washington, D.C.

Steven Steinborn literally wrote the book on food labeling as a principal author of the U.S. Department of Agriculture’s (USDA) labeling guide. On top of that, he offers clients 28 years of experience in guiding informed business decisions, taking into account food laws and other regulations, as well as the environment in which companies operate. Representing food processors, restaurant chains, foodservice operators, ingredient suppliers, and trade associations, Steven focuses on advertising, labeling, and food safety. He is also a strong advocate in enforcement matters brought by the Federal Trade Commission, the Food and Drug Administration, the USDA, and state regulators as well.

From small start-ups to established international brands, Steven understands the dynamics of the food industry. He brings this knowledge to bear on cutting-edge issues ranging from claim substantiation to potential food safety situations. He is also regularly consulted in bringing and defending competitor challenges, and represents companies before the Better Business Bureau’s National Advertising Division. Keenly aware of the current litigation climate, Steven works closely with marketers in exploring all avenues to reach important business objectives.

Beyond the food industry, Steven routinely advises consumer product companies on reporting and potential recall situations arising under the jurisdiction of the Consumer Product Safety Commission. His practice covers a diverse range of industries, including children’s toys, household appliances, infant products, gas grills, furnaces, consumer electronics, computers, printers, handheld devices, and child-resistant packaging.

Steven is a frequent speaker on innovation and legal compliance and has authored numerous articles on a range of subjects, from the latest developments in the regulation of genetically engineered foods to important developments that impact food advertising.

Photo of Mary Lancaster Mary Lancaster

Associate, Washington, D.C.

Mary Lancaster provides practical guidance on complex regulatory issues to help food and beverage companies in all segments of the industry achieve their business goals.

Mary advises clients on Food and Drug Administration (FDA) and United States Department of Agriculture…

Associate, Washington, D.C.

Mary Lancaster provides practical guidance on complex regulatory issues to help food and beverage companies in all segments of the industry achieve their business goals.

Mary advises clients on Food and Drug Administration (FDA) and United States Department of Agriculture (USDA) compliance with current good manufacturing practice (cGMP), advertising and labeling compliance, and food safety issues that arise throughout the entire food supply chain. She also advises on enforcement actions and drafts comments on proposed regulations and agency guidance. Mary also has experience with matters in front of the Federal Trade Commission’s Bureau of Consumer Protection.

Prior to law school, Mary was a legal assistant at a Washington, D.C. law firm, where she assisted lawyers in white-collar investigations, pharmaceutical class action litigations, and federal habeas petitions for death row inmates.