Health Law Daily Wrap Up, ADVERTISING (FOOD, DRUG & MEDICAL DEVICES)—D. Utah: Xlear’s challenge to FTC ad-substantiation requirement dismissed as unripe, (Jul 30, 2026)

By Martin A. Steinberg, J.D.

Xlear claimed the FTC unlawfully requires advertisers to substantiate health-related claims with competent scientific evidence, including randomized controlled trials in some cases.

The federal district court in Salt Lake City dismissed Xlear Inc.’s challenge to the Federal Trade Commission’s requirement that advertisers substantiate health-related claims with competent and reliable scientific evidence. Xlear sought a declaration that Sections 5 and 12 of the FTC Act do not authorize an affirmative substantiation requirement or, alternatively, do not require randomized controlled trials. The court held that the dispute was not ripe because the FTC had taken no final agency action concerning Xlear’s proposed future advertising claims, and determining whether an advertisement is deceptive requires a fact-specific inquiry. It further concluded that the FTC’s policy statements, guidance documents, 2020 warning letter, and prior enforcement action did not determine Xlear’s rights or obligations or impose legal consequences. The court therefore dismissed the action without prejudice for lack of subject-matter jurisdiction and did not reach the FTC’s alternative failure-to-state-a-claim argument (Xlear, Inc. v. FTC, No. 2:25-cv-00484-DBB (D. Utah Jul. 27, 2026)).

Background. Sections 5 and 12 of the FTC Act prohibit unfair or deceptive practices and false advertising, including materially misleading claims concerning food, drugs, devices, services, and cosmetics. The FTC and courts have long interpreted those provisions to require advertisers making health-related claims to possess competent and reliable scientific evidence, which may include randomized controlled clinical trials in some circumstances.

Xlear develops and sells xylitol-based hygiene products, including nasal sprays, toothpastes, mouthwashes, chewing gums, and Spry-branded dental products. In 2020, the FTC warned Xlear that its claims concerning the ability of its nasal spray to prevent or treat COVID-19 lacked adequate substantiation. The United States subsequently sued Xlear in 2021, alleging that the company’s COVID-19 advertising violated Sections 5 and 12 of the FTC Act and the COVID-19 Consumer Protection Act. The government sought injunctive relief and civil penalties, but the parties stipulated to dismiss the enforcement action with prejudice in March 2025.

Xlear then filed this action seeking a declaration under the Administrative Procedure Act and the Declaratory Judgment Act that Sections 5 and 12 do not authorize the FTC to impose an affirmative substantiation requirement. Alternatively, Xlear sought a ruling that those provisions do not require advertisers to support their claims with randomized controlled trials. Xlear alleged that its products are effective against various pathogens but that the threat of future FTC enforcement deters it from advertising those benefits, including possible protection against COVID-19. It also expressed concern that the FTC might bring another action involving its Spry dental products, which were not at issue in the earlier case.

Xlear further alleged that the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), undermined precedent supporting the FTC’s substantiation requirement. It contended that the requirement chills protected speech and violates equal-protection principles by effectively shifting the burden to advertisers to prove that their claims are substantiated. Xlear did not allege, however, that the FTC had issued any warning regarding its Spry products or other proposed advertising claims, and no FTC administrative proceeding or enforcement action was pending against it.

Subject matter jurisdiction. The court first addressed whether it had subject-matter jurisdiction over Xlear’s request for declaratory relief. Because none of the identified FTC materials or actions determined Xlear’s rights or obligations or produced legal consequences concerning the proposed future advertising, the court held that Xlear had not shown a dispute fit for judicial review. Federal courts may decide only actual “cases” or “controversies.” A declaratory judgment must resolve a concrete dispute concerning present rights rather than provide an advisory opinion about hypothetical future conduct.

The FTC argued that Xlear’s claims were not ripe because no enforcement proceeding was pending, no final agency action had been taken concerning the advertising Xlear wished to publish, and any ruling would address only the possibility of future enforcement involving unspecified claims and products. Xlear responded that the FTC’s substantiation requirement was already chilling its speech and that declaratory relief would eliminate that present harm.

The court identified the two ripeness considerations, fitness for judicial review and the hardship of withholding review, but found the absence of final agency action dispositive. In the agency-review context, fitness turns in part on whether the challenged action is final. Under the Administrative Procedure Act, final agency action must mark the consummation of the agency’s decision-making process and must determine rights or obligations or produce legal consequences. Xlear therefore had to identify a definitive FTC position that inflicted an actual and concrete injury.

The court held that Xlear could not identify such an action. Xlear was challenging the possibility that the FTC might apply its substantiation requirement to advertising claims that Xlear had not yet made. Whether an advertisement is deceptive depends on its precise language, its express and implied representations, the information it omits, and the overall context in which consumers encounter it. Because that inquiry is fact-specific, the FTC could not have taken a definitive position on hypothetical advertisements whose content had not been established. The FTC’s 2020 warning letter did not supply the necessary finality because it addressed prior COVID-19 claims that Xlear expressly disclaimed as the basis for the present suit.

Xlear sought to avoid that conclusion by characterizing its suit as a facial challenge to the FTC’s authority to impose any categorical substantiation requirement. The court emphasized that facial challenges carry a heavy burden: the challenger must establish that no set of circumstances exists in which the challenged requirement would be valid. Xlear had not met that burden because it did not show that Sections 5 and 12 could never require substantiation of a health-related claim.

Instead, Xlear argued that Loper Bright Enterprises v. Raimondo had undermined prior decisions upholding the FTC’s substantiation requirement. The court rejected that argument as inapposite. Loper Bright eliminated Chevron deference and altered how courts review agency interpretations of statutes, but the court was not deciding the proper interpretation of Sections 5 and 12 or deferring to the FTC. It was deciding only whether Xlear’s challenge was ripe and whether Xlear had adequately pleaded a facial challenge.

The court also rejected Xlear's argument that the FTC’s longstanding substantiation policy itself constituted final agency action. Xlear cited FTC guidance and policy statements dating to 1984 and contended that, taken together, they had become a de facto rule with binding legal consequences. General policy statements do not establish binding norms, carry the force of law, determine legal rights or obligations, or independently expose regulated parties to civil or criminal liability. Even assuming the substantiation policy represented the FTC’s definitive position, it failed the second part of the final-agency-action test because it did not itself determine Xlear’s rights or impose legal consequences.

The court pointed in particular to the FTC’s 2022 health-products guidance. That document expressly states that it is intended only as business guidance, interprets existing advertising law and precedent, and does not have the force or effect of law. It also explains that whether a particular advertising claim is deceptive depends on the facts of the specific case. Although regulated entities may feel practical pressure to conform their conduct to such guidance, that pressure does not transform a nonbinding policy statement into an order compelling compliance.

The court similarly concluded that the FTC’s 2020 warning letter was not final agency action. The letter did not impose legal consequences and addressed only the COVID-19 marketing claims involved in the prior enforcement dispute, not Xlear’s Spry products or any future claims. The court noted that Tenth Circuit precedent generally treats agency warning and opinion letters as nonfinal because they do not conclusively determine legal rights. The FTC’s prior decision to initiate the enforcement action likewise did not constitute final agency action. The court explained that the initiation of enforcement proceedings does not itself conclusively determine legal rights or represent the agency’s final determination.

Because none of the identified FTC materials or actions determined Xlear’s rights or obligations or produced legal consequences concerning the proposed future advertising, the court held that Xlear had not shown a dispute fit for judicial review. Adjudicating the merits would require the court to resolve an abstract disagreement before the FTC had applied its substantiation principles to any concrete advertising claim. The case was therefore unripe, and the court lacked subject-matter jurisdiction. It dismissed the action without prejudice and did not reach the FTC’s alternative argument that the complaint failed to state a claim under Rule 12(b)(6).

The Case is No. 2:25-cv-00484-DBB.

Judge: Barlow, D.

Attorneys: John P. Snow (Price Parkinson & Kerr) for XLear, Inc. Matthew Michael Hoffman for the FTC.

Companies: XLear, Inc.

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