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LEGAL ISSUES

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Airborne Coughs It Up
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Airborne Health, which ranked No. 2 on the 2006 Inc. 500, may not be feeling that healthy right now. In March, Airborne, the $151 million maker of vitamin-enriched effervescent tablets, announced a $23.3 million settlement in a false-advertising class action. The suit, filed in 2006 in California, centered on cold-curing benefits touted on Airborne's packaging, benefits that were supposedly backed by a "clinical study." But a Good Morning America report in 2006 revealed that the study was performed by a two-person company that employed no scientists or doctors. Airborne has since removed any cold-curing claims from its packaging; the company's packaging and advertising now focus on the product's purported benefits for the immune system. As part of the settlement, Airborne admitted no wrongdoing but agreed to reimburse customers who bought the product from 2001 to 2007, at up to $63 a person.

In a letter to customers, Airborne's CEO, Elise Donahue, wrote, "We reached this settlement because we thought it was the best way to avoid protracted and costly litigation."

Last updated: May 1, 2008




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