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Home | BakerHostetler

James Sherer Comments on Client Questions Post-Election in Law.com and The Recorder Articles

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There are folks who track NAD stats with the same passion as following a beloved sports team. I am not one of those people. That said, I have noticed there seem to be an awful lot of cases of late where the advertiser voluntarily discontinued all the challenged claims rather than defend their substantiation and get a decision on the merits. So, I decided to roll up my sleeves and look at the numbers. A full half of the cases decided this year fall into the voluntarily discontinued bucket. Looking at the NAD database in the latest cases view shows every other decision posted in 2024 follows this pattern. Is this a new trend? Is NAD getting scarier (or are the dreaded follow-on class action filings spiking) such that advertisers are avoiding a decision? Too soon to tell. (And I did not have the patience to wade back into 2023.) But this is certainly something to watch.

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The bigger question is the age-old one for a challenger: Send a cease-and-desist letter or go straight to NAD? If these stats hold up, it looks like advertisers may be more willing to walk away from claims than face the self-regulators. So how to make this call? Like so many things, this is a time v. money call. Drafting a letter takes much less time than drafting a brief (although the latter can serve as an outline or a road map for an eventual brief). It is certainly cheaper and avoids filing fees. If the negotiation process is unsuccessful and you end up at NAD anyway, trying to network it out informally will cost you at least several weeks and sometimes months.

I typically look at it like this: If the changes to ads being sought are modifications rather than full-on discontinuance and/or if the claims are digital, there is a greater likelihood of working something out. If the beef is with printed labeling claims or even to the product name itself, an advertiser is much more likely to engage in a fight and a c&d is just delaying the inevitable. If the claims are directly comparative and disparaging, wherever they appear, time is likely of the essence. Of course, even if this is a trend of advertisers being more willing to walk away from claims, there is benefit in going to NAD, as there you will have ongoing rights to raise compliance issues that NAD will review and engage with the advertiser over, often getting the advertiser into compliance. But if the advertiser does not comply, NAD will refer the file to the FTC. In a c&d situation, there is no remedy if claims are discontinued but then reintroduced. We will watch this space but wanted to provide some food for thought in the meantime.

C&D or Straight to NAD? Some Thoughts on How to Weigh the Decision

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