POM Wonderful to FTC: Go Ahead, Punk. Make My Day
I have written a number of posts about the fact that making health claims in advertising is one of the surest ways to invoke the ire of the Federal Trade Commission and the Food and Drug Administration. Indeed, sellers of breakfast cereals, over-the-counter medicines, and dietary supplements all have learned this lesson recently, settling false advertising claims with the FTC.
But not POM Wonderful, the maker of pomegranate products, including POM Wonderful juice and POMx dietary supplement pills and liquid. The company, which has an aggressive marketing campaign centered around the health benefits of consuming pomegranate products, recently took on the FTC Clint Eastwood-style. It filed a federal complaint in the District of Columbia, seeking a declaratory judgment that the FTC has violated the Constitution and the Administrative Procedure Act by effectively promulgating new rules that would prohibit POM Wonderful from engaging in speech about the health benefits of its products.
The crux of POM's complaint is that the FTC has told POM that the agency is now applying to all marketers a new standard set forth in recent settlements with Nestle and Iovate Health Sciences. These settlements basically prohibit a marketer from making representations that its product is effective in preventing or curing diseases unless the representation is subject to a tentative or final Over-The-Counter ("OTC") drug monograph promulgated by the FDA or is the subject of an approved new drug application. For statements about health claims like weight loss, the settlements generally require the marketer to rely on "competent and reliable scientific evidence that substantiates that the representation is true," which means having "at least two adequate and well-controlled clinical studies . . . conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true." See FTC v. Iovate Health Sciences USA, Inc., No. 10-CV-587 (W.D.N.Y. July 29, 2010) (Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief).
POM's complaint alleges that it invested tens of millions of dollars funding scientific research into the health benefits of pomegranates based on the FTC's prior "substantiation standard," which POM alleges merely required a marketer to posses "'competent, reliable scientific evidence' to substantiate the representation." POM alleges that, by requiring prior FDA approval for some types of statements and 2 independent studies for others, the "new FTC rules essentially bar POM from discussing or disclosing the results of its research and the benefits of its products." This, according to POM, violates the First Amendment, amounts to a "taking" of a "substantial property interest in the scientific research [POM] has funded," is a violation of the Administrative Procedures Act, is an unlawful attempt to enforce the Food, Drug & Cosmetics Act, and exceeds the FTC's authority.
The FTC was not amused. Less than 2 weeks later, it filed an administrative complaint challenging POM's advertising. It sets out in copious detail the text of a variety of marketing materials for POM's juice, pill and liquid products. They make claims about these products' ability to reduce the risk of prostate cancer, prolong the doubling time for prostate-specific antigen, decrease arterial plaque, improve blood flow, reduce blood pressure, and cure erectile dysfunction. The ads often mention that POM has spent twenty million dollars or more on scientific studies, and often discuss those studies.
The FTC's complaint takes issue with the accuracy of POM's health statements and descriptions of the studies. For example, in discussing cardiovascular benefits, the FTC noted:
[T]he Davidson Study showed no significant difference between consumption of pomegranate juice and a control beverage in carotid intima-media thickness progression rates after 18 months. two smaller studies funded by POM Wonderful or its agents showed no significant difference between consumption of pomegranate juice and a control beverage on measures of cardiovascular function; and multiple studies funded by POM Wonderful or its agents did not show that POM Wonderful products reduce high blood pressure.
FTC Compl., para. 13. Thus, the FTC challenges not only what studies POM relied on, but also the fact that POM knew of other studies that do not prove the statements they were making.
Much of the marketing that the FTC pointed to has been pulled down on POM Wonderful's website, but summaries of studies are on a related site, with links to the actual studies themselves.
This is shaping up to be a very interesting commercial speech battle in the field of consumer fraud law. It remains to be seen whether POM Wonderful will have the staying power to see it through to the end.
