Pom Wonderful is suing the Federal Trade Commission (FTC) over new marketing standards of proof the Californian pomegranate leader says are damaging its brand equity.
In its suit, the company alleges the new standards raise the bar too high on what constitutes "competent and reliable scientific evidence" and thereby breach First and Fifth Amendment principles of free speech.
The action claims the standards, which the FTC recently outlined in two settlements with Nestlé Healthcare Nutrition Inc. and Iovate Health Sciences USA Inc, are a breach of the FTC’s remit.
It asks the US District Court of the District of Columbia to declare invalid the standards that include reference to a minimum of two clinical, human trials and pre-market Food and Drug Administration approval for certain claims.
New York-based food and drug attorney Marc Ullman, from Ullman, Shapiro and Ullman, said the action may be damaging in unexpected ways.
“This litigation does not appear to be a good idea for any number of reasons, including potential harm to industry’s efforts to rein in FTC’s spate of overreaching and burdensome enforcement actions in the supplement/natural products arena,” he said.
FTC Pom investigation?
He said POM’s action was weakened by the fact the FTC was not in any way acting directly against it so there was no ‘threat of harm’, despite reports the FTC is engaged in an ongoing investigation of its claims, and POM stating in its action that it was “specifically advised” by the FTC that the Nestlé/Iovate rulings had a broader authority.
The matter is further complicated by POM seeking and winning an injunction to suppress media reports of any FTC investigation of its activities, which it then withdraw after The New York Times and The Washington Post backed The National Law Journal in an appeal against it.
Colorado-based food attorney Justin Prochnow from Greenberg Traurig said the action represented widespread industry concern over recent FTC settlements.
“The provision that 'competent and reliable scientific evidence' must, at a minimum, include two adequate and well-controlled human clinical studies of the product is troubling for companies,” he said.
“The lack of a statutory definition of "competent and reliable scientific evidence" in the statutes or regulations enforced by FDA and FTC has always created some confusion among industry companies as to what constitutes sufficient support for claims.”
Prochnow said the new FTC standards would mean animal studies and studies conducted on individual ingredients were likely to be discounted by the agency.
The Nestlé settlement for a children’s immunity product called BOOST Kid Essentials where the new standards were outlined can be found here.
Virginia based attorney Jonathan Emord from Emord & Associates backed POM’s assertion that the FTC standards change was unconstitutional, and violated the First Amendment.
“The agency cannot make unencumbered commercial speech dependent upon anything other than the requirement that the speech be non-misleading,” he said. “Speech not approved by FDA may be true. Speech not supported by a set number and kind of human trials may also be true. The constitutional burden of proof is on FTC to prove falsity in each specific case based on the precise content of the claim.”
POM’s suit sates in part that it, “has spent millions establishing a brand identity that is synonymous with good health” and that the FTC, “is injuring POM's goodwill and brand identification with consumers as the juice company that focuses on science and good health."
The new FTC rules have, "disrupted POM's present and ongoing business," it said and imposed, "significant new burdens and risks on advertisers."
“The new FTC rules essentially bar POM from discussing or disclosing the results of its research and the benefits of its products.”
POM had many of its claims challenged by the FDA in February. They included being able to reduce atherosclerosis; reduce blood flow/pressure; slow the onset of prostate cancer; improve erectile function; improve circulation; reduce cholesterol; fight free radicals and benefit diabetes.
The company also this week won a case in a California court against juice maker Welch’s which was deemed to have been making misleading claims about its own pomegranate juices.