NAD Settlements — They're Possible and Worth Considering

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Many advertisers who appear before the National Advertising Division assume that once an NAD challenge is filed there’s no turning back. The NAD rarely declines an opportunity to review cases, and when it does reject a complaint it is usually for one of the narrow reasons stated in Section 2.2(B)(i) of the ASRC Policies and Procedures. Those reasons include where the challenged advertising is local in nature, subject to pending litigation, exceedingly technical, or permanently withdrawn before the challenge. In other words, short of one NAD party filing a lawsuit against the other, an advertiser and challenger who wish to mutually resolve a pending NAD dispute may believe they have no way of doing so. But before you resign your advertising to the self-regulatory microscope, there’s still hope for settlement that avoids the costs of litigation and the risks of a detailed public case report.

The NAD recently issued a trio of case reports (Cases #5719, #5720, #5721) administratively closing cross-challenges between T-Mobile and AT&T based on settlements that the NAD found satisfactory. The NAD’s one-page orders in each case are succinct and substantively identical. First, the NAD explains that “[d]uring the pendency of the instant inquiry, the parties informed the NAD that they reached an agreement concerning the challenged claims.” Next, the NAD notes that “the parties’ agreement regarding the advertising claims at issue addresses NAD’s concerns for the public’s interest in receiving truthful and accurate information.” For these reasons, the NAD concludes that “supplemental review by the self-regulatory forum would be duplicative and, consequently, lacks sufficient merit to warrant the expenditure of its resources”—a catch-all basis for administrative closure under Section 2.2(B)(i)(f) of the ASRC Policies and Procedures. Finally, in a footnote, the NAD reserves the right to re-open the challenges “in the event of a breach of the settlement agreement by either party.”

Originally published on Venable's All About Advertising Law blog on June 23, 2014 and Law360 on July 3, 2014.

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Topics:  Advertising, AT&T, NAD, Settlement, T-Mobile

Published In: General Business Updates, Communications & Media Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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