Friday, September 19, 2014
Thursday, September 18, 2014
U.S. SEEKS TO HAVE BAYER CORPORATION HELD IN CIVIL CONTEMPT FOR NOT SUBSTANTIATING PROMOTIONAL CLAIMS
FROM: U.S. JUSTICE DEPARTMENT
Friday, September 12, 2014
United States Seeks Civil Contempt Against Bayer Corporation for Failure to Substantiate Promotional Claims for Phillips’ Colon Health
The Department of Justice announced that it filed a motion to show cause why Bayer Corporation should not be held in civil contempt for violating a court order in the U.S. District Court for the District of New Jersey. The court order, entered in 2007 in United States v. Bayer Corporation, prohibits Bayer from making unsubstantiated claims for any dietary supplement it promotes or sells. The government alleges in today’s motion that Bayer promotes one of its products, Phillips’ Colon Health, using claims about the product’s purported benefits without having evidence to substantiate those claims.
The court order prohibits Bayer from making any claim about the performance or efficacy of any dietary supplement, multivitamin or weight-control product unless, at the time Bayer makes the claim, the company possesses “competent and reliable scientific evidence” to support the claim. In its motion, the United States alleges that Bayer expressly claims Phillips’ Colon Health can “defend against” occasional constipation, diarrhea, and gas and bloating, and impliedly claims that Phillips’ Colon Health prevents, treats and cures constipation, diarrhea, and gas and bloating, even though the company lacks competent and reliable scientific evidence for those claims.
“Bayer is required to abide by a longstanding court order to back up claims it makes about the products it sells,” said Assistant Attorney General Stuart F. Delery for the department’s Civil Division. “The Department of Justice will not tolerate companies that seek to gain an unfair advantage over their competitors by promoting to consumers unsubstantiated claims about the health benefits of their products.”
In its motion, the United States describes Bayer’s multimillion dollar nationwide marketing campaign for Phillips’ Colon Health, which includes print advertisements and television commercials featuring “The Colon Lady,” in addition to claims on the product’s packaging. The motion further alleges that consumers have paid hundreds of millions of dollars for Phillips’ Colon Health, even though Bayer lacks the evidence to support the claims of the purported benefits of this product.
The Consumer Protection Branch of the Civil Division and the U.S. Attorney’s Office for the District of New Jersey filed the motion for contempt with the assistance of the Federal Trade Commission (FTC). The matter is filed as United States v. Bayer Corporation, No. 07-0001, in the District of New Jersey.
In 2007, the United States filed a civil complaint against Bayer alleging that Bayer marketed its One-A-Day WeightSmart multivitamin and dietary supplement with unsubstantiated claims that, among other things, One-A-Day WeightSmart helped prevent some of the weight gain associated with a decline in metabolism in users over the age of 30. The complaint alleged that those unsubstantiated claims violated an order issued in 1991 by the FTC against Bayer’s predecessor, Miles Inc., that required all claims about the benefits of One-A-Day brand vitamins to be substantiated by competent and reliable scientific evidence.
In order to resolve the complaint’s allegations, in 2007, Bayer agreed to pay a $3.2 million civil penalty and agreed that it would not make unsubstantiated representations regarding the benefits, performance, efficacy, safety or side effects of any dietary supplement, multivitamin or weight-control product. In 2007, the U.S. District Court for the District of New Jersey entered an order resolving the complaint’s allegations and prohibiting Bayer from making unsubstantiated claims about its products.
Assistant Attorney General Delery commended the efforts of the FTC to investigate Bayer’s compliance with the 2007 court order and for referring this latest matter for enforcement. This case is being handled by the Civil Division’s Consumer Protection Branch.
This motion contains a set of allegations. If this motion is litigated, the government would need to prove the allegations by clear and convincing evidence.
Wednesday, September 17, 2014
Tuesday, September 16, 2014
DOJ, EPA, WVDEP SETTLE CLEAN WATER ACT VIOLATIONS CASE WITH TRANS ENERGY INC.,
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, September 2, 2014
Trans Energy Inc. to Restore Streams and Wetland Damaged by Natural Gas Extraction Activities in West Virginia
Company Will Also Pay $3 Million Civil Penalty to Resolve Alleged Clean Water Act Violations
The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the West Virginia Department of Environmental Protection (WVDEP) today announced a settlement with Trans Energy Inc., requiring the oil and gas company to restore portions of streams and wetlands at 15 sites in West Virginia that were polluted by the company’s unauthorized discharge of dredge or fill material. Trans Energy will pay a penalty of $3 million to be divided equally between the federal government and the WVDEP. The Clean Water Act requires a company to obtain a permit from EPA and the U.S. Army Corps of Engineers prior to discharging dredge or fill material into wetlands, rivers, streams and other waters of the United States.
“Today’s agreement requires that Trans Energy take important steps to comply with state and federal laws that are critical to protecting our nation’s waters, wetlands and streams,” said Sam Hirsch, Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “We will continue to ensure that the development of our nation’s domestic energy resources, including through the use of hydraulic fracturing techniques, complies with the Clean Water Act and other applicable federal laws.”
“As part of our commitment to safe development of domestic energy supplies, EPA is working to protect wetlands and local water supplies on which communities depend,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “By enforcing environmental laws, we’re helping to ensure a level playing field for responsible businesses."
In addition to the penalty, the company will reconstruct impacted aquatic resources or otherwise address impacts at each of the 15 sites, provide appropriate compensatory mitigation for impacts to streams and wetlands, and implement a comprehensive compliance program to ensure future compliance with Section 404 of the Clean Water Act and applicable state law. Among other requirements, the company will work to ensure that all aquatic resources are identified prior to starting work on any future projects in West Virginia, and that appropriate consideration is given at the design stage to avoid and minimize impacts to aquatic resources. It is estimated that Trans Energy will spend more than $13 million to complete the restoration and mitigation work required by the consent decree.
The federal government and the WVDEP allege that the company impounded streams and discharged sand, dirt, rocks and other materials into streams and wetlands without a federal permit in order to construct well pads, impoundments, road crossings and other facilities related to natural gas extraction. The government alleges that the violations impacted approximately 13,000 linear feet of stream and more than an acre of wetlands.
Filling wetlands illegally and damming streams can result in serious environmental consequences. Streams, rivers and wetlands benefit the environment by reducing flood risks, filtering pollutants, recharging groundwater and drinking water supplies, and providing food and habitat for aquatic species.
EPA discovered the violations in 2011 and 2012 through information provided by WVDEP and the public, and through routine field inspections. In summer 2014, the company conducted an internal audit and ultimately disclosed to EPA alleged violations at eight additional locations, which are also being resolved through this Consent Decree.
The settlement also resolves alleged violations of state law brought by the WVDEP.
Sunday, September 14, 2014
MORTGAGE LEAD GENERATOR BUSINESS SETTLES FTC CHARGES OF DECEPTIVE ADVERTISING OF MORTGAGE REFINANCING CHARGES
FROM: U.S. FEDERAL TRADE COMMISSION
Mortgage Lead Generator Will Pay $500,000 to Settle FTC Charges That It Deceptively Advertised Mortgage Refinancing
An Internet-based operation that finds potential borrowers for mortgage refinancing lenders will pay a $500,000 civil penalty to settle Federal Trade Commission charges that it deceived consumers with ads that falsely claimed they could refinance their mortgages for free.
“An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else.”
The FTC charged that the Colorado-based Intermundo Media, LLC, using the name “Delta Prime Refinance,” designed and distributed the deceptive refinancing ads as a part of its lead generation service. According to the complaint, the company ran these ads on Google, Microsoft, AOL, and Yahoo, as well as on its own websites. When consumers clicked on the ads, they were sent to a landing page where they provided contact information, which was ultimately passed on to providers of mortgage refinancing.
Delta Prime Refinance made deceptive and unsupported claims in its advertisements that overstated how much consumers could reduce their payments if they refinanced their mortgages, how low their annual percentage rate would be, and how easy it would be for them to qualify for refinancing, according to the complaint. Some ads falsely claimed there were no hidden fees, and that the mortgage refinancing was “free,” according to the FTC. Other ads claimed that fixed interest rates were available, when in fact the rates and the amount consumers spent on interest were variable.
The complaint charges Delta Prime Refinance with violating the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, or “MAP” Rule and Regulation N, and the Truth in Lending Act and Regulation Z.
Under the terms of the settlement, in addition to paying the $500,000 civil penalty, Intermundo Media is prohibited from:
misrepresenting the terms and conditions of any financial product or service, and any term or condition of a mortgage credit product,
disclosing, selling, or transferring the consumer data obtained through the Delta Prime Refinance lead generation service; and
violating the FTC Act; the MAP Rule and Regulation N; and the Truth in Lending Act and Regulation Z.
For consumer information about mortgages, see Homes and Mortgages on the FTC’s website.
The Commission vote authorizing the staff to refer the complaint to the Department of Justice and to approve the proposed consent decree was 5-0. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the District of Colorado on September 12, 2014. The proposed consent decree is subject to court approval.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when signed by the District Court judge.
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