September 18, 2020

FTC’s deceptive-ad claims

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POM-WonderfulBy Jenna Greene, From The National Law Journal

POM Wonderful LLC made deceptive ads touting the health benefits of pomegranate juice, the U.S. Court of Appeals for the D.C. Circuit ruled on Friday (Jan 30), siding with federal regulators.

In 2013, the Federal Trade Commission found that POM made false and unsubstantiated claims that its pomegranate juice and dietary supplements prevent heart disease, prostate cancer and erectile dysfunction. The commissioners ordered the privately held company not to run any ads touting the health benefits of its products unless they’re backed by at least two randomized and controlled human clinical trials.

POM, represented by Thomas Goldstein of Goldstein & Russell, argued that the requirement to conduct two clinical trials was a “sweeping injunctive prophylactic remedy” that would “radically transform the requirements” for food marketing. Goldstein urged the court to “balance the risk of the product—here, nothing, because it’s a healthy food,” with “the burden imposed” by the FTC’s remedy, a ban on commercial speech.

The appellate panel—Chief Judge Merrick Garland and judges Douglas Ginsburg and Sri Srinivasan—sided with the FTC, but concluded that only one clinical trial was necessary.

“The FTC Act proscribes—and the First Amendment does not protect—deceptive and misleading advertisements,” Srinivasan (left) wrote for the panel. “Here, we see no basis for setting aside the commission’s conclusion that many of POM’s ads made misleading or false claims about POM products.”

The court affirmed the FTC’s order requiring one clinical study before POM can make health claims about its products, but stopped short of requiring two, finding “inadequate justification” for the blanket requirement.

“All else being equal,” Srinivasan wrote, two studies would provide more reliable scientific evidence than one, just as three would be better than two, and four better than three. But here, requiring two trials “without adequate justification exacts considerable costs, and not just in terms of the substantial resources often necessary to design and conduct a properly randomized and controlled human clinical trial,” he wrote.

For example, if there was one large-scale, perfectly designed trial that showed a supplement significantly reduced the risk of disease, the two-trial requirement would prevent consumers from hearing the news.

“Consumers may be denied useful, truthful information about products with a demonstrated capacity to treat or prevent serious disease,” the panel found. The two-test requirement “brooks no exception for those circumstances. … The commission fails to demonstrate how such a rigid remedial rule bears the requisite ‘reasonable fit’ with the interest in preventing deceptive speech.”

POM also argued that doing clinical studies would be logistically difficult and could even be unethical—for example, if researchers deprived a control group of Vitamin C to test its relationship to preventing cancer. That may be true, the panel found, but “petitioners give us no reason to believe that it would be unethical to create a zero-intake group for pomegranate juice.”

POM argued that the clinical trial requirement amounted to a new legal rule, and therefore violated Administrative Procedure Act requirements for notice and comment.

“We disagree. The commission proceeded in this case via adjudication rather than rulemaking,” the panel found, pointing to “well-settled” precedent that “an order rendered in an adjudication may affect agency policy and have general prospective application does not make it rulemaking.”

FTC chairwoman Edith Ramirez called the decision “a victory for consumers. It is in keeping with established law that advertisers who market products for serious health conditions must have rigorous science to back up those claims.”

In an emailed statement, a POM Wonderful spokesman said, “We are grateful that the court substantially reduced the requirement that the FTC tried to enforce on us to conduct multiple double-blind, placebo-controlled studies.

“We’re proud of the $35 million of peer-reviewed scientific research we have done about pomegranates and pomegranate juice. Consumers know that pomegranate juice is inherently healthy, and POM Wonderful has always communicated with consumers in a transparent, honest manner, delivering valuable information about the potential health benefits of our products.”

IMAGE: Photo: Diego M. Radzinschi/NLJ

For more on this story go to:: http://www.nationallawjournal.com/id=1202716584746/POM-Wonderful-Loses-Appeal-Over-FTCs-DeceptiveAd-Claims-#ixzz3QaeeiUOb

 

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