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THROUGH THE LOOKING GLASS - THE FTC'S (FEDERAL TRADE COMMISSION'S ADVERTISING SUBSTANTIATION EXCLUSIONARY RULE

NCJ Number
47205
Journal
American University Law Review Volume: 27 Issue: 1 Dated: (FALL 1977) Pages: 76-91
Author(s)
R L WILLIAMS
Date Published
1977
Length
16 pages
Annotation
AN EVIDENTIARY RULE PRECLUDING ADVERTISERS' USE, IN A SUBSEQUENT ADJUDICATIVE HEARING, OF ANY EVIDENCE NOT SUBMITTED DURING THE REGULATORY AGENCY'S INVESTIGATION IS EXAMINED.
Abstract
ADVERTISERS ARE EXPECTED TO POSSESS AND RELY ON TEST, STUDIES, OR OTHER DATA SUBSTANTIATING PRODUCT CLAIMS. THE FTC HAS ENFORCED THIS REQUIREMENT THROUGH AN INVESTIGATIVE PROCESS. AFTER FTC REVIEW, PRECLAIM SUBSTANTIATION MATERIALS GENERALLY HAVE BEEN MADE PUBLIC OR HAVE CONSTITUTED THE BASIS FOR AN ADJUDICATIVE COMPLAINT. UNDER THE EXCLUSIONARY RULE IN QUESTION, THE FTC LAW JUDGE IS PROHIBITED FROM RECEIVING INTO EVIDENCE AT A SUBSEQUENT ADJUDICATIVE HEARING ANY INFORMATION OR DOCUMENTS (OR REFERENCES TO THESE) NOT SUBMITTED BY THE ADVERTISER IN RESPONSE TO THE FTC'S INVESTIGATORY PROCESS. THIS RULE COMPELS THE ADVERTISER TO PRESENT, DURING THE INVESTIGATIVE STAGE, ITS ENTIRE EVIDENTIARY DEFENSE TO A POTENTIAL ADJUDICATIVE COMPLAINT CHARGING FAILURE TO POSSESS A PRIOR REASONABLE BASIS FOR THE ADVERTISING CLAIMS FOR WHICH SUBSTANTIATION WAS REQUESTED. AT THE SAME TIME, THE FTC IS FREE TO DEVELOP ITS ADJUDICATIVE CASE WITH ALL AVAILABLE EVIDENCE. EXAMINATION OF THE RULE CONCLUDES THAT, IF THE RULE DOES NOT PROVE UNWORKABLE DUE TO THE VOLUME OF INVESTIGATIVE RESPONSES IT WILL ENGENDER, IT SHOULD BE UNENFORCEABLE AS UNCONSTITUTIONAL, ILLEGAL, AND UNAUTHORIZED BY LAW. (AUTHOR ABSTRACT MODIFIED--LKM)

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