challenge to FTC's substantiation requirement isn't yet ripe

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.