In a lawsuit that will likely be closely watched, Xlear, Inc.—a Utah-based manufacturer of xylitol-based hygiene products—has filed a federal lawsuit against the Federal Trade Commission (FTC) and its chairman, Andrew N. Ferguson. The suit, filed June 18 in the U.S. District Court for the District of Utah, seeks declaratory relief challenging the FTC’s long-standing requirement that advertisers have substantiation to prove the claims made in their advertising.
Xlear’s central argument is that the FTC’s “substantiation” standard, particularly as it applies to health-related claims, exceeds the agency’s statutory authority under Sections 5(a) and 12 of the FTC Act. The company contends that the Act prohibits only false or deceptive statements—not unsubstantiated ones—and that requiring marketers to possess substantiation effectively imposes a standard not found in the text of the statute. The complaint points to the FTC’s requirement that health-related claims be backed by randomized controlled trials (RCTs) as particularly onerous.
Background: COVID-19 and Prior FTC Enforcement
The story of the dispute can be traced back to the early months of the COVID-19 pandemic. Xlear promoted its saline product, Xlear Nasal Spray, as an additional layer of defense against COVID-19, citing in vitro studies and emerging research. The FTC responded with a warning letter in July 2020 and later referred the matter to the Department of Justice, which filed suit in October 2021. The FTC alleged that Xlear and its CEO violated the FTC Act by making claims without RCT substantiation. That case was voluntarily dismissed with prejudice in March 2025, after four years of litigation.
Despite the dismissal, Xlear claims that the FTC’s 2022 Health Products Compliance Guidance continues to impose a “rigorous substantiation” requirement that chills protected speech, harms the company’s ability to market its products, and deprives consumers of truthful health information.
Substantiation and Reliance on Loper
At the heart of the new complaint is a statutory interpretation argument shaped by the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, which overturned the Chevron doctrine and ended judicial deference to agency interpretations of ambiguous statutes. Xlear argues that under Loper, courts must now determine the “best reading” of a statute and that the FTC’s historical insistence on substantiation—especially via RCTs—is not the best and thus not a permissible reading of Section 5 and Section 12.
Xlear notes that the FTC Act makes no mention of “substantiation,” and that even well-supported, truthful statements could be deemed unlawful under the agency’s current framework. The company argues that this interpretation imposes a de facto rule without congressional authorization, contravenes First Amendment protections for commercial speech, and violates the Equal Protection Clause by shifting the burden of proof to advertisers to prove their claims are substantiated rather than the FTC proving the claims are deceptive.
Relief Sought
Xlear requests that the court strike down the FTC’s substantiation requirements under Sections 5 and 12 of the FTC Act. Xlear also seeks a declaratory judgment clarifying that:
- The FTC cannot impose a substantiation requirement beyond what the FTC Act expressly permits
- The FTC must bear the burden of proving that challenged statements are false, unfair, or deceptive—not merely unsubstantiated
- Any future FTC enforcement must adhere strictly to the statutory text and that the agency must cease equating lack of substantiation with unlawful conduct
Implications for the Industry
Xlear’s suit also raises a familiar tension for advertisers in the health and wellness sector: How much evidence is enough to substantiate a product claim? While the FTC has long maintained that health-related claims require “competent and reliable scientific evidence,” typically in the form of RCTs, Xlear argues that such a standard is both impractical and unnecessary, particularly when truthful claims are based on established scientific principles or general evidence.
The case also highlights tension in positions taken by the Trump administration. While historically, the FTC has used its enforcement activity to regulate behavior. Ferguson and FTC commissioner Mark Meador have repeatedly said the FTC is a law enforcement agency, should focus on bringing cases, and should avoid regulation.
The requirement that an advertiser have substantiation comes not from a regulation promulgated by the agency but from a body of enforcement actions both litigated and settled that engrafted that requirement into Section 5 of the FTC Act. How the FTC and the courts react to the challenge to regulation by enforcement will be illuminating on multiple levels.
