NARB Finds NAD Acted Appropriately in Jurisdictional Challenge Filed by Colgate Palmolive

New York, NY – March 20, 2016 – The majority of a panel of the National Advertising Review Board (NARB) has determined that the National Advertising Division (NAD) acted appropriately when it decided against administratively closing its review of advertising claims made by Colgate Palmolive Company, for its Tom’s of Maine “Naturally Dry” antiperspirant.

The National Advertising Review Board is the appellate body of the advertising industry’s system of self-regulation.

In the underlying case, claims made by Colgate for the Tom’s product were challenged by Unilever United States, Inc., a competing manufacturer of antiperspirants. Unilever challenged claims that included:

• “Naturally Dry” [product name]
• “It really works. Naturally.”
• Ingredients “meet our stewardship model for safe, effective and natural.”

Colgate argued that NAD should administratively close its review because the procedures that govern the NAD process provide for administrative closure where the challenged claims are the subject of pending litigation or an order by a court.
The challenged claims had been raised in class action litigation filed against Tom’s of Maine in a Florida U.S. District Court. The class action complaint alleged misleading and deceptive “natural” claims with respect to the marketing and sales of a wide variety of Tom’s of Maine products, including its “Naturally Dry” antiperspirant. One of the claims in the class action alleged that Tom’s of Maine antiperspirant products were deceptively marketed as natural because they contained aluminum chlorohydrate, which is not natural.

NAD noted in its decision, however, that while a court-ordered settlement in class-action litigation takes into account the fairness of the results and the fairness to the class, the court does not make findings as to the truthfulness of the advertising claims at issue.  Further, NAD noted,  while a court order evaluating the truthfulness of the same advertising claims would result in duplicative proceedings and might result in inconsistent guidance on the advertising claims, a court order approving a litigation settlement is unlikely to produce inconsistent guidance particularly where the settlement did not require changes to the challenged advertising claims.  NAD determined that it retained jurisdiction to review the challenged claims on their merits.

Following its review, NARB determined that the court order relied on by Colgate “did not make any findings with respect to the claims challenged by Unilever, and it required no action other than what the parties agreed to in their settlement agreement.”

The panel noted that NAD’s exercise of jurisdiction posed no danger of multiple and potentially conflicting findings from tribunals because the class action was resolved without any findings as to the truthfulness or accuracy of the challenged claims.

In essence, NARB noted in its decision, the settlement is an agreement between Tom’s of Maine and the approved class of consumers, and the court’s overall determination that the settlement was “fair, reasonable and adequate” did not resolve questions about the truth or falsity of the claims challenged by Unilever and did not help to foster consumer confidence in advertising or create a level playing field for other advertisers.

Based on that analysis, a majority of the panel found that the NAD acted appropriately in deciding not to administratively close this case.

Colgate, in its advertiser’s statement, said that “although it disagrees with the decisions reached in this matter, out of respect for the voluntary self-regulation process Colgate Palmolive Co. and Tom’s of Maine (Tom’s) will follow NAD’s recommendations regarding Tom’s of Maine Naturally Dry antiperspirant.”

Further, the company said that it is of the “firm belief that NAD was incorrect regarding the claims at the heart of this challenge; Tom’s advertising and packaging of its Naturally Dry antiperspirant are neither false nor misleading. Tom’s also believes that NAD should not have exercised jurisdiction in this case, and to narrow the issues for NARB on this appeal, Tom’s addressed only the threshold issue of NAD’s exercise of jurisdiction. … Tom’s maintains that NAD should not review advertising claims subject to court orders finally approving consumer class action settlements.”