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Analysis: POM Wonderful FTC ruling

Attorney: FTC Commissioners’ ruling on POM Wonderful is ‘truly astonishing’, ‘abusive’ and ‘unlawful’

1 commentBy Elaine WATSON , 17-Jan-2013
Last updated on 18-Jan-2013 at 01:51 GMT

While the headlines yesterday could be summarized as ‘FTC one, POM zero’, legal experts say the 54-page opinion from FTC Commissioners on the FTC’s false advertising case vs POM Wonderful could have troubling implications for the food and supplement trade as a whole.

Indeed, even one of the Commissioners - Maureen K. Ohlhausen - said in comments accompanying the majority opinion that she was concerned it could set a precedent by blurring the boundaries between structure/function claims and more hardcore disease-related claims.

Specifically, she disagreed with the majority findings of implied disease claims: “It is difficult to imagine any structure/function claims that POM could associate with its products in the marketplace without such claims being interpreted, under the FTC precedent set in this case, as disease-related claims.”

Final order reinstates FTC’s controversial 2-RCT rule that Michael Chappell rejected

While the Commissioners agreed with administrative law judge (ALJ) Michael Chappell (who issued an initial ruling on the case last May) that POM had made several unsubstantiated claims about its pomegranate juice, they also disagreed with him on some key points.

For example, although POM did not emerge from Chappell’s ruling smelling of roses, his judgment was welcomed by many in the food/supplement industry because it challenged the FTC’s position that disease claims about foods should always be supported by at least two randomized controlled trials (RCTs).

Yesterday, however, FTC Commissioners rejected Chappell’s argument and issued a final order barring POM from making disease claims on any of its products unless they are supported by at least two RCTs, a standard of evidence many in the trade believe to be inappropriate for foods - as opposed to drugs.

Emord: Health marketplace will be dumbed down considerably thanks to this ruling

Their opinion was immediately blasted by leading food law attorney Jonathan Emord as “arbitrary and capricious” and potentially bad news for the trade as a whole, regardless of the merits of POM’s ads.

He told FoodNavigator-USA: “The problem created by the FTC’s new 2 RCT requirement is rendered particularly egregious because the FTC imposed it not only on establishment but also on efficacy claims, not only on disease treatment but also on any disease-related claim, and not only on express but also on implied claims. 

“The breadth of that requirement is truly astonishing and bodes ill for the free interchange of truthful health information. After today’s decision, the health marketplace will be dumbed down considerably to the detriment of health conscious consumers.”

There will now be a multimillion dollar entry fee for firms looking to convey health benefits

In September 2010, the FTC filed an administrative complaint accusing the Californian pomegranate juice giant of making false and unsubstantiated advertising claims that its products could prevent or treat heart disease, prostate cancer, and erectile dysfunction.

He added: “The Commission ignored significant academic criticism of the utility and reliability of RCTs in the food and supplement context and unfairly considered two RCTs as requisite when no reputable scientist would rule out the possibility of one good study sufficing or of the totality of evidence short of an RCT sufficing, depending on the claim made. 

“In the end, that will mean a loss in public health as there will now be a multi-million dollar entry fee imposed on any who would wish to convey a health benefit to consumers in the market.”

The broad fencing-in provision is also “abusive and unlawful”, he claimed, not least because the order applies to all products sold by POM’s parent Roll Group, including products not covered in the false advertising case.

Commissioners did not give the FTC Complaint Counsel everything they wanted

Ivan Wasserman, a Washington DC-based attorney at law firm Manatt, Phelps & Phillips, agreed that the opinion dashed hopes that had been raised by Chappell’s earlier ruling.

“If anyone had hoped the FTC would accept something less than RCTs to support disease treatment or prevention claims, that hope has been dimmed by this decision.”

But he did also note that the Commissioners did not give the FTC Complaint Counsel everything they wanted.

“They rejected their request that the final order prohibit POM from making disease claims unless the claims are pre-cleared by FDA. That provision has become common in FTC Orders, and it will be interesting to see if it continues.”

He added that the Commissioners had also avoided the question of whether media interviews given by POM constituted ads and whether they were protected as free speech: “Perhaps the most surprising thing to me was that the Commissioners punted on the issue of whether statements made by company officials during interviews were actionable under the FTC Act. 

“They basically concluded that they did not have all of the relevant information on the circumstances of the interviews, and did not need to decide the issue because POM was already liable based on its ad claims.”

Marc Ullman, partner at law firm Ullman, Shapiro & Ullman LLP, said: "The one substantive change in the final order is that it says you don't need pre-approval from the FDA for NLEA health claims in advertisements [which are the remit of the FTC, not the FDA], whereas in the past decade we've seen a requirement for this in FTC consent decrees and orders."

Cara Welch, senior VP, Scientific & Regulatory Affairs at the Natural Products Association, conceded this was a positive move, but said the insistence on 2 RCTs established "a disturbing precedent for supplement companies regarding substantiation and clearly sets a drug standard".

Does the case have broader significance or not?

But not everyone we spoke to felt the opinion shed any more light on what the FTC expects in general as regards claims substantiation.

Writing in the FDA Law blog this morning, Hyman, Phelps & McNamara attorneys   John R. Fleder and   Riëtte van Laack said the opinion "seemed to go to great lengths to avoid making any sweeping pronouncements of law... by repeatedly noting that its rulings were based on the specific facts applicable only to POM’s actions".

But they added: "The FTC ruled that qualifying language such as 'may' or 'can' with respect to the effects of the POM products on diseases does not modify the messages that were otherwise conveyed.  Nor, the FTC found, does humor, parody or hyperbole in an advertisement block  the communication of what the FTC will conclude is a serious message conveyed in an advertisement."

Finally, as regards free speech, they said: "Can the FTC place a burden on an advertiser to prove that its ads are substantiated or must the FTC prove that an advertisement is actually false or misleading to avoid First Amendment attacks?  We suspect that this issue could well be decided in this very case."

POM: FTC ignored the findings of its own chief administrative law judge

The FTC case vs POM has been followed closely by the food and supplements industry as it addresses broader questions over the substantiation required for making claims about foods as distinct from drugs

POM, meanwhile, said it “categorically rejects” the FTC’s assertion that its ads misled consumers about the health benefits of pomegranate juice and vowed to appeal at the U.S. Circuit Court of Appeals.

A spokesman said: “The FTC is taking the unprecedented step of holding food companies… to the same standards as pharmaceuticals.

“The agency ignored the findings of its own Chief Administrative Law Judge [Chappell] in an attempt to bypass Congress and rewrite the rules governing food advertising.  

“By holding health food companies to pharmaceutical research standards and ‘implying’ disease treatment claims that are not being made, the FTC is going to stifle research across the entire food industry.”

FDA pre-approval for claims is not required

The FTC Commissioners found that POM had made 34 false or misleading claims that POM products treat, prevent, or reduce the risk of heart disease, prostate cancer, or erectile dysfunction (whereas Chappell had found 19 unsubstantiated claims).

In a concurring statement, Commissioner J. Thomas Rosch added: “If POM’s ads simply made health claims, standing alone, they could not properly be challenged as false or deceptive.

“But they do not stand alone. In some instances the alleged health claim is expressly linked to a claim that the POM products treat, prevent or reduce the risk of heart disease or prostate cancer.

“Those… links create a net impression that the highest possible level of substantiation exists for the POM product being advertised, and that claim is false.”

Click here to read the opinion in full.

Click here to read Commissioner Rosch’s concurring statement.

Click here to read Commissioner Ohlhausen’s concurring statement.

 

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1 comment (Comments are now closed)

Not ALL attorneys think this is Astonishing

There is no new law being made here. The only thing that could remotely be "astonishing" about this opinion, is that it took so long to get to this point. POM clearly made claims that their product could treat, prevent or reduce the risk of these diseases. We all know that. There seems to be a belief in this industry that we can get around these pesky advertising rules by being clever with the copy. The industry would do well to carefully read the analysis of the advertisements.
The”science” POM Wonderful relied upon was inadequate. Perhaps the two RCTs standard, as it applies to POM, isn’t such a bad standard. I believe a careful reading of the opinion allows for less than two RCTs, if the data are adequate and the claim well crafted.
I hope the industry learns something from this.

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Posted by DM
17 January 2013 | 20h47

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