Legal Library: Cases and Proceedings

The Federal Trade Commission is returning more than $930,000 to consumers who bought tea products that Teami marketed and sold using allegedly deceptive health claims.

The FTC sued Teami, LLC and its owners in March 2020, charging that the company made bogus health claims and paid for endorsements from well-known social media influencers who did not adequately disclose that they were being paid to promote the defendant’s products. Teami claimed without reliable scientific evidence that their Teami 30 Day Detox Pack would help consumers lose weight, and that its other teas would fight cancer, clear clogged arteries, decrease migraines, treat and prevent flus, and treat colds.

Medical device company Boston Scientific Corp. agreed to divest certain assets to Varian Medical Systems to settle Federal Trade Commission charges that Boston Scientific’s proposed $4.2 billion acquisition of medical equipment and pharmaceutical supplier BTG plc would violate federal antitrust law. According to the complaint, Boston Scientific’s acquisition of BTG would harm consumers in the U.S. market for drug eluting beads, or DEBs, which are microscopic beads used to treat certain liver cancers. Interventional radiologists use DEBs, combined with chemotherapy drugs, in a procedure called transarterial chemoembolization. Under the proposed settlement agreement, Boston Scientific was required to divest to Varian its DEB business, as well as its bland bead product line. Bland beads are used in another type of procedure to block the flow of blood to a liver tumor. On Feb. 18, 2022, the Commission announced modifications to the divestiture agreement with Boston Scientific Corp.

In March 2021, a New York-based company and its CEO agreed to settle FTC charges that they sold hundreds of thousands of indoor TV antennas and signal amplifiers to consumers using deceptive claims that the products would let users cancel their cable service and still receive all of their favorite channels for free. Among other things, the proposed consent order settling the FTC’s complaint prohibits the defendants from making claims about: 1) any product’s rating, ranking or superiority to other products; 2) the channels users will receive; or 3) any material aspect of a product’s performance, efficacy, or central characteristics, unless the claims are true and substantiated.

In December 2016, DeVry University and its parent company agreed to a $100 million settlement of a Federal Trade Commission lawsuit alleging that they misled prospective students with ads that touted high employment success rates and income levels upon graduation. Under the settlement, DeVry was ordered to pay $49.4 million in cash which was distributed to qualifying students who were harmed by the deceptive ads, as well as $50.6 million in debt relief.

The Federal Trade Commission sued to block Lockheed Martin Corporation’s $4.4 billion proposed vertical acquisition of Aerojet Rocketdyne Holdings Inc, the last independent U.S. supplier of missile propulsion systems. Aerojet supplies advanced power, propulsion, and armament systems, which are critical components for the missiles made by Lockheed and other defense prime contractors. The  agency’s  complaint alleged that if the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defense contractors and further consolidate multiple markets critical to national security and defense. On Feb. 15, 2022, the Commission issued a statement regarding the parties’ decision to abandon the transaction.

In February 2022, at the request of the Federal Trade Commission, federal courts in California ordered two Voice-over-Internet Protocol (VoIP) service providers, Xcast and Deltracon, to turn over information that the agency is seeking as part of ongoing investigations into potentially illegal robocalls. Companies that fail to comply with such federal court orders can be held in contempt.

In February 2022, at the request of the Federal Trade Commission, federal courts in California ordered two Voice-over-Internet Protocol (VoIP) service providers, Xcast and Deltracon, to turn over information that the agency is seeking as part of ongoing investigations into potentially illegal robocalls. Companies that fail to comply with such federal court orders can be held in contempt.

The Federal Trade Commission filed a law enforcement action to block U.S. semiconductor chip supplier Nvidia Corp.’s $40 billion acquisition of UK-based semiconductor design firm Arm Ltd., the largest transaction in the history of the semiconductor industry. The FTC’s action seeks to preserve competition in markets for computer chips used in datacenters and in automotive advanced driver assistance systems. The complaint named Nvidia Corp., Arm Ltd., and Arm owner Softbank Group Corp. In February 2022, Nvidia Corp. announced that it had terminated its proposed acquisition of Arm Ltd. (Arm) from SoftBank Group Corp, and the Commission dismissed the complaint.

In April 2021, two companies, BASF SE and DIEM Labs, agreed to pay a total of more than $416,000 to settle FTC charges that they deceptively marketed two dietary fish oil supplements as clinically proven to reduce liver fat in adults and children with non-alcoholic fatty liver disease (NAFLD). The payment will enable the Commission to provide refunds to all consumers who bought either supplement. They also were barred from the allegedly illegal conduct. The Commission announced approval of the final consent orders in June 2021.

In 2020, Danaher Corporation agreed to divest assets to settle Federal Trade Commission charges that its proposed $21.4 billion acquisition of General Electric’s biopharmaceutical business, GE Biopharma, would violate federal antitrust law. Sartorius Stedim Biotech S.A. is the approved divestiture buyer. Sartorius agreed to obtain the Commission’s prior approval if it proposed to acquire Novasep Process SAS’s chromatography equipment business. On Feb. 1, 2022, the Commission announced that it granted Sartorius’s petition to proceed with this acquisition.

The Federal Trade Commission issued an administrative complaint in August 2020 against a marketer, Traffic Jam Events, LLC, and its owner, David J. Jeansonne II (collectively, the "Respondents"), charging multiple counts of deceptive conduct. The administrative complaint mirrors a prior federal court complaint, which the Commission voluntarily dismissed to pursue a broader administrative proceeding.  On October 25, 2021, the Commission granted Complaint Counsel’s Motion for Summary Decision and ordered Respondents to cease and desist from such conduct for twenty years.