Airborne products

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August 14, 2008

http://www.ftc.gov/opa/2008/08/airborne.shtm

Makers of Airborne Settle FTC Charges of Deceptive Advertising; Agreement Brings

Total Settlement Funds to $30 Million

Consumers Have Until September 15 to Apply for Refunds

Airborne Health, Inc., the Bonita Springs, Florida maker of the popular Airborne

Effervescent Health Formula, an effervescent tablet marketed as a cold

prevention & treatment remedy, has agreed to pay up to $30 million to settle

Federal Trade Commission charges that it did not have adequate evidence to

support its advertising claims. The FTC’s lawsuit also names

Knight-McDowell, the former schoolteacher who invented Airborne, and her husband

McDowell. If the settlement is approved by the court, it will

prohibit the defendants from making false & unsubstantiated cold prevention,

germ-fighting, & efficacy claims. The monetary judgment will be satisfied by the

defendants’ adding $6.5 million to the funds they have already agreed to pay

to settle a related private class-action lawsuit, bringing the total settlement

fund to $30 million.

“There is no credible evidence that Airborne products, taken as directed, will

reduce the severity or duration of colds, or provide any tangible benefit for

people who are exposed to germs in crowded places,†said Lydia Parnes,

Director of the FTC’s Bureau of Consumer Protection.

The FTC complaint & agreed-upon final order follow settlement last November of

the class-action lawsuit, v. Airborne, Inc. et al., which is pending in

federal court in the Central District of California. In that case, the

defendants have agreed to pay up to $23.51 million, which will be used for

consumer refunds & attorneys’ fees. If the class action suit funds are

exhausted, up to $6.5 million in additional funds for consumer redress will

become available as a result of the FTC order. One redress administrator will

manage both pools of funds & consumers will receive a single refund check.

The class action settlement provides refunds for purchases of

Airborne-branded products (including Airborne Effervescent Health Formula,

Airborne On-the-Go, Airborne Power Pixies, Airborne Nighttime, Airborne Jr.,

Airborne Gummis, & Airborne Seasonal Relief) made between May 1, 2001 & November

29, 2007.

More information on the settlement, eligibility requirements, &

procedures for filing a claim online or by mail can be found at:

www.airbornehealthsettlement.com

Consumers have until September 15, 2008 to apply for a refund for up to 6

product purchases.

The defendants have marketed Airborne Original Effervescent Formula as a dietary

supplement containing 17 ingredients, including vitamins A, C, E, zinc, &

selenium. Airborne products have been advertised nationally in print media & on

radio and television. They have been sold by grocery stores, drug stores, & mass

merchandisers.

According to the FTC’s complaint, there is no competent & reliable scientific

evidence to support the claims made by the defendants that Airborne tablets can

prevent or reduce the risk of colds, sickness, or infection; protect against or

help fight germs; reduce the severity or duration of a cold; & protect against

colds, sickness, or infection in crowded places such as airplanes, offices, or

schools. The FTC complaint also states that the individual defendants in the

case, company founders Knight-McDowell & McDowell, made

false claims that Airborne products are clinically proven to treat colds.

If consumer refund claims are not paid on time in the lawsuit, or if the

defendants have not paid at least $23.5 million to settle any other similar

class-action lawsuit by December 31, 2009, the defendants must pay the entire

$30 million to the FTC, which will administer its own consumer redress program.

In addition to prohibiting the defendants from making claims that are false,

misleading, or unsubstantiated by competent & reliable scientific evidence, and

providing additional funds for consumer redress, the order authorizes the

Commission to monitor the defendants’ compliance with the order.

The Commission vote authorizing the staff to file the complaint & agreed-upon

final order was 3-1, with Commissioner J. Rosch dissenting. These

documents were filed in the U.S. District Court for the Central District of

California on August 13, 2008.

The complaint and agreed-upon final order name the following defendants:

Airborne Health, Inc., also doing business as Airborne, Inc. & Knight-McDowell

Labs; Airborne Holdings, Inc.; Knight-McDowell; & McDowell,

also known as Rider McDowell.

The FTC’s complaint & agreed-upon final order can be found at:

http://www.ftc.gov/os/caselist/0723183/080814airbornecomplaint.pdf.

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