POM Petitions D.C. Circuit for Rehearing on FTC Action

POM Wonderful, LLC markets a number of pomegranate-based products. In a series of advertisements that ran from 2003-2010, POM touted medical studies showing that daily consumption of its products could address a variety of medical conditions, including heart disease and cancer. In 2010, the FTC filed an administrative complaint against POM and related parties challenging the claims as false, misleading and unsubstantiated. After an initial Administrative Law ruling following a lengthy trial, the ALJ found the advertising misleading based on its description of existing clinical trials. The ALJ, however, rejected the FTC’s attempt to impose a mandatory substantiation standard of randomized, well-controlled human clinical trials demonstrating statistically-meaningful results (“RCT”) to substantiate all health-related efficacy claims.

Ultimately the Commission issued an order finding that the challenged ads were misleading and barred their future dissemination. The Commission declined to address the specific level of support required for general health or nutritional claims. However, the Commission barred POM from running future ads asserting that the products prevented or treated any disease unless supported by at least two RCTs. POM appealed the Commission’s order to the United States District Court for the District of Columbia.

On January 15, 2015, the D.C. Circuit issued an opinion affirming most, but not all of the FTC’s order. Importantly, the court made clear that FTC efforts to regulate advertising are subject to strict First Amendment limitations. That means, before the FTC can impose restrictions on future advertising, it must demonstrate that the restrictions are narrowly tailored to accomplish the government’s legitimate interest in preventing misleading advertising. Consistent with this finding, the court rejected the FTC’s requirement that disease claims must be supported by two RCTs, finding that such claims could be supported by one RCT. As the court stated:

[T]he Commission understandably does not claim a myopic interest in pursuing scientific certitude to the exclusion of all else, regardless of the consequences.

Here, the consequences of mandating more than one RCT bear emphasis. Requiring additional RCTs without adequate justification exacts considerable costs, and not just in terms of the substantial resources often necessary to design and conduct a properly randomized and controlled human clinical trial. If there is a categorical bar against claims about the disease-related benefits of a food product or dietary supplement in the absence of two RCTs, consumers may be denied useful, truthful information about products with a demonstrated capacity to treat or prevent serious disease. That would subvert rather than promote the objectives of the commercial speech doctrine. 

While the court’s ruling was a clear victory for the FTC as against the challenged POM advertising, it was also a strong rebuke to the agency’s attempt to establish an across-the-board requirement of two RCT’s for disease-related claims.

Dissatisfied with the court’s ruling, on April 6, 2015, POM filed a petition with the D.C. Circuit, POM requesting that the full court reconsider some of the thirty-six advertisements that it claimed did not conclusively indicate that POM products treated or prevented diseases. POM further claimed that some of the advertisements only had the potential to mislead, and the health benefits described in the ads were not conclusive. Accordingly, POM argued that the advertisements are subject to First Amendment protection. Finally, these types of cases rarely are reviewed by the courts because they’re likely to settle, and POM pressed the importance of reviewing the case to set the precedent for future cases.

Given that the FTC has suffered some setbacks in its attempt to impose a two RCT requirement, it will be interesting to see if the court accepts POM’s petition and further narrows the FTC’s ruling. Even if POM is unsuccessful, the court’s rejection of an imposed across the board fixed substantiation standard and recognition of a marketer’s first amendment rights is still significant.

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