Airborne Reaches Settlement With FTC Over Labeling
Airborne, Inc., has reached a settlement in its case with the Federal Trade Commission over older advertising and labeling of its dietary supplement products. The Airborne settlement provides additional funding of up to $6.5 million for consumers who request refunds as part of a class action lawsuit settlement.
Airborne has denied wrongdoing or illegal conduct in both the class action and before the Federal Trade Commission, but reached an agreement with the FTC and agreed to settle the class action lawsuit, to avoid continued expense and distraction from management of the business.
“The additional funding is not a fine,” says attorney Helene Jaffe who represents Airborne. “The money represents additional dollars that Airborne has agreed to set aside should more consumers file claims during the designated claims period.”
“Consumers can feel confident that the advertising and labeling going into the marketplace accurately reflects what Airborne products do,” says Airborne CEO Elise Donahue. “Our products help support the immune system. In fact, the key ingredients in Airborne have been studied in scientific research and
reported in medical journals. Airborne is the same product that millions of consumers swear by. Airborne, meanwhile, continues to be the #1-selling immune support dietary supplement, and we’re very proud of this fact.”
U.S. District Judge Virginia A. Phillips is considering final approval of the $23.5 million settlement of a class action lawsuit that challenged the older advertising and labeling of Airborne dietary supplements. On November 29, 2007, Judge Phillips entered an order preliminarily approving the proposed class action settlement reached between Airborne, Inc., and the plaintiff, David Wilson of San Bernardino, Calif. The final hearing for the proposed settlement occurred on June 16, 2008.
The enhanced settlement fund of up to $30 million ($23.5 million for the class action settlement and $6.5 million for the recent FTC settlement) will be divided among consumers who joined the class action and filed for refunds; the plaintiff; his attorneys, who include private practitioners in California; and the Center for Science in the Public Interest (CSPI) in Washington, D.C. A large share of the settlement will be distributed to class action attorneys. The claims administrator will approve and pay individual claims by October 15, 2008.
“It’s important to note that this is a settlement over older advertising and labeling and has nothing to do with public safety,” says Donahue. “We’ve offered a money-back guarantee for our products since 1997 and we have millions of satisfied customers. A class action lawsuit sparked this matter. We’re just one of many major consumer brands across America that are under assault by class action lawyers.”
Discussions with State Attorneys General Continuing
In a related matter, Airborne attorneys are currently in discussion with 28 state attorneys general to resolve their investigations into Airborne’s older advertising and labeling practices.
The law firms of Weil, Gotshal & Manges in New York and Hyman, Phelps & McNamara in Washington, D.C., are representing Airborne in all legal matters.
Because of the continuing nature of the legal matters, Airborne management is respectfully declining any requests for media interviews.
“Our main focus has been and always will be our consumers,” Donahue added. “We hear from people every day that support our product. Thousands of our loyal consumers have called and written to us over the past few months and we deeply appreciate all of their support. They are the heart and soul of this company. We are committed to bringing them the high-quality products they deserve.”
About Airborne, Inc.