Xlear, Inc. v. U.S. Fed. Trade Comm’n, 2026 WL 2150208, No.
2:25-cv-00484-DBB-CMR (D. Utah Jul. 27, 2026)

In 2021, the FTC brought a civil action against Xlear because
its COVID-19 claims allegedly lacked substantiation and violated the FTC Act. “Xlear
is a developer and manufacturer of xylitol-based hygiene products such as nasal
sprays, toothpastes, mouthwashes, and chewing gums that allegedly promote good
health and reduce the risk of disease.” Advertising its nasal spray as
effective for the prevention and treatment of COVID-19 allegedly violated
Sections 5 and 12 of the FTC Act, as well as the COVID-19 Consumer Protection
Act of 2021. In March 2025, the enforcement action was dismissed with
prejudice.

Not satisfied, Xlear sued, seeking a declaratory judgment
under the APA that Sections 5 and 12 of the FTC Act “do not and cannot impose
an affirmative burden of substantiation on regulated parties.” It alleged that
its xylitol-based hygiene products are effective “against various pathogens,”
yet fear of the likelihood of future FTC enforcement allegedly prevents Xlear
from taking steps to advertise its products’ benefits, including protection
against COVID-19, which it alleges “remains a serious health risk” to
Americans. It argued that precedent upholding the FTC’s substantiation
requirement is no longer good law under Loper Bright Enterprises v. Raimondo,
and that the requirement chills Xlear’s First Amendment speech rights and
violates its Equal Protection rights by allegedly shifting the burden of proof
to defendants to show that their advertising claims are substantiated. [I’ve been
waiting for this argument for a while.]

The claims weren’t ripe. “Here, Xlear cannot point to a
definitive position the FTC has taken on advertising claims it has yet to
make—let alone one that inflicts an actual, concrete injury—because whether an
advertisement is deceptive turns on its content, making it a fact-specific
inquiry.”

Xlear argued that it was making a facial challenge. To win
such a challenge, Xlear needed to show that Sections 5 and 12 of the FTC Act
never require a health claim to be substantiated. It didn’t. Loper Bright didn’t
matter because “the court is not interpreting the statute, much less deferring
to agency action. Rather, the court is determining the ripeness of the case and
addressing the standard for a successful facial challenge.”

Xlear also argued that the FTC has taken a definitive
position/final action by highlighting the substantiation requirement going back
to 1984. But the “distinction between ‘general statements of policy’ and
‘rules’ is critical” because “ ‘general statements of policy’ … neither
determine rights or obligations nor occasion legal consequences.” An agency’s
“policy statements ‘do not establish a binding norm—or in other words, do not
have the force and effect of law.” Nor can they be “enforced against parties”
or “expose them to civil and criminal liability.” “Thus, even if the court were
to agree that the substantiation requirement represents the FTC’s definitive
statement of its position under the first prong of the final agency action
test, the requirement still fails under the second prong because the FTC’s
substantiation requirement does not determine the rights and obligations of the
parties.”

I wonder what the Texas district court hearing the
gender-affirming care cases thinks about this argument, since it is very much
ripe there.

from Blogger https://tushnet.blogspot.com/2026/08/challenge-to-ftcs-substantiation.html