Companies Targeted By FTC Using Penalty Offense Authority Have Strong Defense, Attorney Says
John Villafranco, partner at Kelly Drye & Warren LLP, says the US FTC’s ability to obtain monetary relief using the penalty offense mechanism is questionable both on statutory and Constitutional grounds. Marketers faced with civil penalties – for example, for alleged inadequately substantiated health claims – should stand their ground, he suggests in a recent interview.
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The US Federal Trade Commission is "fully prepared" to bring forward cases after issuing hundreds of penalty offense notices in April regarding health claims substantiation, and it is likely to seek injunctive and monetary relief, said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, at the National Advertising Division’s annual conference in Philadelphia.
Attorneys are closely watching how the US Federal Trade Commission’s latest wave of penalty offense notices to almost 700 companies plays out, noting – as did recently departed commissioner Christine Wilson – that seeking civil penalties in court under this “long dormant” authority could be challenging.
Agency sends flares across wide field of advertisers illuminating the need for marketers to substantiate health claims. Reminder made brighter noting penalties of up to $50,120 per violation.