Celebrity endorsements—how brands can manage legal risks and protect their reputations

The importance of this distinction is illustrated by the Federal Trade Commission’s 2000 lawsuit against Steve Garvey, the retired Los Angeles Dodgers first baseman, and Enforma, which marketed and sold weight-loss supplements “Exercise in a Bottle” and “Fat Trapper.” In two infomercials, Garvey served as a somewhat skeptical host interviewing an expert endorsing the weight-loss supplements. The infomercials featured footage of people eating enormous amounts of high-caloric food and promised consumers that if they purchased the supplements—which purportedly contained fat-blockers and fat-burners—they could eat food such as fried chicken, pizza and cheeseburgers without gaining weight. 

The FTC alleged that both Garvey and Enforma had made false, deceptive and unsubstantiated advertising claims about the weight-loss supplements and that Garvey was liable not only as a participant acting as a spokesperson but as an “endorser” of the products.

According to the FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising, an “endorsement” means “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser …” Further, the endorser must be a “bona fide” user of the product or service at the time of the endorsement and the endorsement should not contain any representations that would be deceptive or could not be substantiated if made directly by the advertiser.

Unlike Enforma, Garvey refused to settle the lawsuit. His case eventually made its way to the 9th Circuit Court of Appeals, which upheld the district court’s holding that Garvey did not endorse the weight-loss supplements. It said the FTC failed to establish that a reasonable consumer would conclude Garvey’s statements in the infomercials reflected his personal opinion about the products. In other words, Garvey was merely speaking on behalf of the company.

The lesson here is to determine from the beginning whether the celebrity will merely be a spokesperson for the company or also an endorser of a company’s product or service. And it must also be clear to consumers that the celebrity is being compensated to speak on behalf of the company and/or its products or services.

Celebrity as endorser

Consider a hypothetical company selling a diet program and weight-loss supplements that hires a well-known actress to endorse its program. Advertising features before and after photos of the actress, claiming that she lost 10 pounds in two weeks on the program. And it discloses, as required by FTC guidelines, that according to a clinical study, the average weight loss after two weeks on the program is five pounds.