Less than two weeks after POM Wonderful LLC filed a complaint against the Federal Trade Commission (FTC) alleging that new requirements imposed on food producers making health-related claims exceeded the agency’s authority, FTC filed a complaint charging the pomegranate juice maker with “making false and unsubstantiated claims that their products will prevent or treat heart disease, prostate cancer, and erectile dysfunction.” In re: POM Wonderful LLC, No. 9344 (F.T.C., filed September 24, 2010). According to FTC, POM Wonderful’s scientific studies either did not show the benefits claimed for the product or were not sufficiently rigorous.
As part of this administrative action against the company, FTC also reached an agreement with a former POM Wonderful executive in which he will provide the agency with documents relating to the purported product misrepresentations and refrain from making any additional misrepresentations in the future. Mark Dreher has also apparently agreed to cooperate with FTC in connection with the litigation against POM Wonderful. The agreement is subject to public comment until October 27, 2010.
POM Wonderful filed its complaint for declaratory relief in a D.C. federal court alleging that FTC (i) exceeded its authority in requiring Food and Drug Administration (FDA) pre-approval of health-related claims on food products, that is, those claims stating that a product treats, mitigates or prevents disease, and substantiation of non-disease-related claims with two “well-controlled” clinical studies; (ii) violated advertisers’ First and Fifth Amendment rights by requiring compliance with these new standards; and (iii) failed to comply with notice-and-comment rulemaking procedures in establishing the standards. POM Wonderful LLC v. FTC, No. 1:10-cv- 01539 (U.S. Dist. Ct., D.C., filed September 13, 2010).
According to the complaint, FTC has advised POM Wonderful that it must comply with standards recently announced in consent orders against other companies and now apparently applicable to the food and dietary supplement industry as a whole. POM Wonderful contends that these standards apply “regardless of whether or not the [advertising] claims are true or supported by competent, reliable scientific evidence.” Calling the standards a significant departure from FTC’s prior regulation of “deceptive” speech or advertising only, the plaintiff alleges that FTC has exceeded its statutory authority and is “encroaching upon the exclusive authority reserved for the FDA.”
POM Wonderful also alleges that it has spent “tens of millions of dollars in funding independent research and in establishing a research program to better understand and promote the nutritional qualities and health benefits of pomegranates. The new FTC rules essentially bar POM from discussing or disclosing the results of its research and the benefits of its products,” and thus, the agency has violated its free speech rights. The plaintiff characterizes this agency action as a prior restraint on truthful speech. The plaintiff seeks declarations that (i) FTC’s new requirements are invalid, (ii) the agency exceeded its statutory jurisdiction, (iii) requiring FDA pre-approval violates First and Fifth Amendment rights, and (iv) FTC failed to comply with rulemaking procedures and has acted arbitrarily, capriciously and contrary to law. The company also seeks an award of costs.