FTC Files Brief in POM Wonderful LLC Appeal Arguing First Amendment Protection Is not Available for POM’s Allegedly Misleading ClaimsFebruary 10, 2014
By Riëtte van Laack –
On Friday, February 7, 2014, the FTC filed its long-awaited brief in the D.C. Circuit action concerning POM Wonderful LLC’s (“POM’s”) advertising for its pomegranate products (see our previous post here).
Not surprising, the FTC asserts that POM’s ads were deceptive. First, the FTC earlier determined that POM’s claims did not constitute “general health benefit” claims but claims (direct and indirect) that POM products fought specific diseases, i.e., atherosclerosis, prostate cancer, and erectile dysfunction. According to the FTC, the Court may rely on and should give deference to the FTC’s “reasoned analysis” of POM’s advertising claims, asserting that the FTC need not conduct surveys or obtain consumer testimony to support its interpretation of claims. Moreover, in this case, the FTC asserts that its interpretation is supported by POM’s internal documents produced during discovery. Second, according to the FTC, there is no question that the claims were false and misleading. FTC alleges that not only did POM not have one RCT to support its claims but several of POM’s studies showed no or a negative effect. Yet, according to the FTC, POM continued citing the single study supporting its claims without mentioning the subsequent studies that allegedly showed no or a negative effect.
As, according to the FTC, POM’s ads were misleading, POM’s First Amendment argument fails; false and misleading claims are not protected. The FTC acknowledges that First Amendment protection is available to potentially misleading claims that could be presented in a non-misleading manner by adding an effective disclaimer. However, this case does not concern future potentially misleading claims but past claims that, according to the FTC, were actually misleading, despite disclaimers or disclosures.
The FTC defends the requirement of two RCTs in the proposed order as a fencing-in provision. It claims that, under long-standing precedent, fencing-in provisions may be broader than the conduct that is declared unlawful; the FTC may “impose substantiation requirements that are reasonably related to preventing unlawful conduct even though those requirements may exceed what would be required of companies that have not been found liable for deceptive advertising.” The FTC justifies its choice of the remedy as a method to ensure that POM would not continue “its long track record of distorting scientific evidence when portraying the disease benefits of its product.” The FTC stresses that the two-RCT requirement applies only to POM’s future claims for disease prevention, risk reduction, and treatment, not to any future claims of general health benefits and not to disease claims that are effectively qualified.
The FTC did not discuss whether POM should have had positive results from more than one RCT because, in the underlying liability ruling, the FTC concluded that POM lacked positive results from even one RCT.
POM’s reply brief is due on February 21, 2014. On February 10, 2014, Public Citizen, Inc. filed a notice of its intent to submit an amicus curiae brief in support of the FTC. No date for oral argument has been set.