FTC to POM: Our claim standards are not new

By Shane Starling

- Last updated on GMT

Related tags Ftc Federal trade commission Pleading

If POM's recent actions are anything to go by, it won't take the FTC's motion to dismiss lying down
If POM's recent actions are anything to go by, it won't take the FTC's motion to dismiss lying down
The Federal Trade Commission (FTC) says it has not set any new claim substantiation “rules” in a new court action against California-based pomegranate player, POM Wonderful.

In an earlier action that is yet to be heard in the same District of Columbia District Court, POM asserted that the FTC had implemented new scientific standards to back marketing campaigns that were restricting freedom of speech and damaging its brand equity.

In seeking to dismiss that action, the FTC states it never implemented any new rule or standard.

“This assertion is baseless, and the Court has no jurisdiction for several reasons,”​ the FTC’s motion to dismiss states.

“Because the FTC might seek the remedy of FDA approval in a consent agreement or might propose such a remedy in litigation does not mean that this is a new ‘rule’ that the FTC can enforce.”

The FTC is also suing POM for making unsubstantiated claims – a case due to be heard in May, 2011.

“In fact, after POM filed the instant complaint, the FTC filed an administrative complaint against POM, and that complaint does not allege that POM violated any ‘rule’ or ‘standard’ other than the FTC Act,”​ the action continues.

“Thus, POM’s allegation that the FTC will seek to enforce a new ‘rule’ against it is moot: The FTC has filed a complaint against POM and has not done what POM seeks to prevent. POM’s complaint can be dismissed on this basis alone.”

The FTC then alleges it never caused POM injury; that POM’s action will influence its own enforcement and that it fails to state a claim on which relief can be granted.

Definitive standards

But Virginia-based food attorney, Jonathan Emord, from Emord & Associates, said while the FTC may not have formally enshrined its substantiation policies, it did not necessarily follow that its individual settlements and actions could not add up to one in a court of law.

The issue is far more complicated than the FTC would have the court believe,”​ he said.

“The FTC settles upon terms it finds acceptable which, internally, must be vetted and approved by the Commission for use in decrees. Thus, its substantive requirements for substantiation in consent decrees are definitive standards that should be deemed actionable rules in federal court. Moreover, those substantiation standards have an actual chilling effect on prospective advertisers who regard the standards in the decrees as indicative of the level, degree, quality, and quantity of scientific support the FTC expects.”

Florida-based attorney, Joel Rothman, from Arnstein & Lehr, said the FTC action was almost certain to succeed and questioned POM’s aggressive litigious strategy.

“I can’t see POM getting past this motion to dismiss,” ​he said. “I think they should have tried harder to reach a settlement with the FTC when they had the chance and no doubt this litigation has led to the FTC being more aggressive than it might have otherwise. The FTC is a reasonable agency to negotiate with normally.”

New York-based food and drug attorney Marc Ullman, from Ullman, Shapiro and Ullman, agreed the FTC had a strong case.

POM’s action asked 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.

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."

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.

With the core of POM-FTC battle being about interpretations of what constitutes scientific substantiation, POM part-owner Linda Resnick highlighted POM’s angle when she said recently: “Why do we need thousands of people in a 20-year trial for fruit? They do it for drugs because drugs kill people, or potentially harm them."

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