On January 30, 2015, the United States Court of Appeals for the District of Columbia issued an opinion in a case regarding the Federal Trade Commission’s (FTC) challenge to the advertisements of POM Wonderful’s (“POM”) pomegranate-based products. POM Wonderful Inc. v. FTC, Case No. 13-1060 (D.C. Cir. Jan. 30, 2015). POM produces, markets, and sells a variety of pomegranate-based products. The case stems from POM’s advertisements from 2003 to 2010 that described medical studies showing that daily consumption of POM’s products could treat, prevent, or reduce the risk of certain ailments, such as heart disease, prostate cancer, and erectile dysfunction.
In 2010, the FTC filed an administrative complaint charging that POM and related parties had violated the Federal Trade Commission Act by making false, misleading, and unsubstantiated representations. After significant administrative proceedings, the FTC found that POM and the associated parties were liable for violating the FTC Act and ordered them to cease and desist from making misleading and inadequately supported claims about the health benefits of POM’s products. These parties were also barred from running future ads asserting that their products treated or prevented any disease unless supported by at least two randomized, controlled human clinical trials that demonstrated statistically significant results.
POM and the associated parties petitioned for review of the FTC’s order in the D.C. Circuit and argued that the order ran afoul of the FTC Act, the Administrative Procedure Act, and the First Amendment. The opinion was predominately a victory for the FTC, as the D.C. Circuit upheld the FTC’s conclusion that many of POM’s ads made misleading or false claims and affirmed the FTC’s remedial order insofar as it required POM’s health claims to be supported by at least one randomized, controlled human clinical trial study. Nonetheless, there are several key takeaways for defendants in misbranding lawsuits.
POM argued that it had properly qualified its health claims by using words such as “promising,” “initial,” and “preliminary.” The court favored the FTC’s conclusion that those words did not neutralize these health claims when the positive results were touted to consumers in unequivocally positive terms and without reference to the limitations of these studies.
However, the court indicated that a disclaimer could potentially rectify this error:
“An advertiser thus still may assert a health-related claim backed by medical evidence falling short of an RCT [randomly controlled clinical trial] if it includes an effective disclaimer disclosing the limitations of the supporting research.”
Randomly Controlled Clinical Trials (RCTs)
The court rejected POM’s argument that it was unnecessary for POM to have one or more RCTs to substantiate disease claims. The court cited the FTC’s factual findings regarding the importance of control groups and having double-blinded studies, concluding that “it is less likely that participants or investigators will consciously or unconsciously take actions potentially biasing the results.”
However, the court held that the FTC’s order against POM was unconstitutional to the extent it mandated two (as opposed to one) RCTs “as an across-the-board requirement for any disease claim.” It ruled that the FTC failed to justify a “categorical floor of two RCTs for any and all disease claims.” In reaching this conclusion, the court noted, among other things, that FDA seemed to only require one RCT in certain circumstances. It noted that even the FTC itself had not consistently required two, or in some cases even one, RCT. In addition, while the FTC highlighted POM’s “history of selectively drawing on favorable studies while disregarding unfavorable results,” the court held that the FTC did not sufficiently link the two-RCT requirement to POM’s history of wrongdoing in order to justify the imposition of the two-RCT requirement.
Nevertheless, the court stated that the FTC is not necessarily barred in future cases from imposing a two-RCT substantiation requirement; only here, the FTC failed to justify its two-RCT requirement for all of POM’s disease claims.
The court rejected POM’s argument that requiring RCTs to substantiate disease related claims about food products was too onerous. Indeed, the court acknowledged that RCTs may be costly, but ruled that “if the cost of an RCT proves prohibitive, petitioners can choose to specify a lower level of substantiation for their claims.”
There is no First Amendment protection for misleading advertising. Accordingly, the court had no difficulty summarily concluding that FTC correctly determined that many of POM’s ads were deceptive.