Third Circuit Says Decision To Dismiss FTC’s False Advertising Allegations Against Home Insulation Company

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United States: Third Circuit Confirms Decision to Dismiss FTC’s False Advertising Allegations Against Home Insulation Company

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A Third Circuit panel recently upheld a Pennsylvania district court ruling in favor of defendant Innovative Designs (“IDI”) in an FTC publicity challenge. We previously blogged about the district court ruling, which found that the FTC had not presented any credible expert testimony to support its claims. On appeal, the Third Circuit panel asserted that the FTC had failed to demonstrate that IDI’s advertising claims were not scientifically substantiated. FTC vs. innovative designs(3d Cir. July 22, 2021).

IDI manufactures and sells Insultex House Wrap, a weather resistant barrier used in the construction of buildings. The insulating power of home packaging products is determined by the R-value of the product, a measure of the product’s ability to restrict heat flow. The higher the R-value, the greater the insulating power of the product. IDI announced that Insultex has an R-value of R-3 or R-6. The FTC alleged that the IDI overestimated the R-value of its products because “(1) IDI did not use the ASTM C518 standard test to give its alleged R-values, and the ASTM C518 standard tests did not gave the results claimed by IDI Instead of the ASTM C518 Test standard, the FTC alleged that the IDI used a modified ASTM test to obtain the R-values ​​claimed.

The Court concluded that to prevail over the absence of a theory of justification, the FTC must identify the evidence that the advertiser should have to support its claim in the relevant scientific community, and then prove that the justification that the advertiser claims to have would not meet the relevant requirements. scientific community. In this case, the Court concluded that the FTC’s arguments had failed because the FTC had failed to establish that the modified ASTM test did not conform to the standard ASTM C518 test; the Court noted that the ASTM C518 tests explicitly contemplate that variations of the standard method can be used in an acceptable manner. Further, the FTC has failed to prove that the modified test would not satisfy the relevant scientific community, and has not demonstrated “by expert testimony or otherwise” that the modified test gave inaccurate results. The court clarified that the onus was on the FTC to prove that the tests would not be acceptable to the relevant scientific community, and not on the IDI to prove that it would.

Like the decision of the district court, the opinion of the third circuit reinforces the importance of scientific evidence, in particular through a properly verified expert witness, when the advertising claims in question are very technical and the The FTC’s theory of falsity rests on a lack of justification.

Third Circuit Confirms Decision to Dismiss FTC’s False Advertising Allegations Against Home Insulation Company

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