Decision day has come in FTC v. POM Wonderful (see prior post here) and both sides have claimed victory. On May 21st, the FTC published the “initial” 335-page decision by FTC Administrative Law Judge (“ALJ”) D. Michael Chappell. For POM, along with many food and supplement companies, the decision was good news because the ALJ rejected the FTC’s most strident and overreaching positions. On the other hand, the ALJ found that POM violated the FTC Act by making misleading health claims.
The crux of the FTC’s Complaint was that POM disseminated false and misleading advertising and promotional materials representing (mostly by implication) that “clinical studies, research, and/or trials prove” that consuming certain POM products (POM Juice, POMx Pills, and POMx Liquid) “prevents or reduces the risk of” or “treats” heart disease, prostate cancer or erectile dysfunction.
In his decision, the ALJ squarely rejected the FTC’s contention that randomized, double-blind, placebo-controlled human clinical trials (“RCTs”) were necessarily required. Rather, “the appropriate level of substantiation is determined by what the evidence shows that experts in the relevant field would deem adequate.” The ALJ thus basically agreed with POM’s position that, in addition to “gold standard” RCTs — which can be very costly — “basic science” and “pilot” studies could also be considered, with basic science referring to test-tube (in vitro) studies, in vivo animal studies, and pre-clinical research.
Under this standard, the ALJ found that the claims that the POM Products could “support prostate health” and “promote erectile health” could be supported. But he found that the claims that the POM Products could prevent, treat or reduce the risk of prostate cancer, erectile dysfunction and heart disease were not supported by scientific evidence and that they therefore violated the FTC Act. In other words, he held that POM’s structure/function claims were supported and not misleading, but its health claims and/or qualified health claims were deceptive.
Finally, the ALJ rejected the FTC’s request that POM obtain pre-approval from the FDA for any future health claims as being “unsupported by governing precedent.” The FTC sought a pre-approval requirement to create a “clear and precise” bright-line rule to eliminate any confusion or ambiguities. As the ALJ observed, “neither FDA pre-approval, nor FDA standards for obtaining such approval, constitutes the required level of substantiation under the FTC Act or applicable case law.”
On its website, POM claimed victory:
“Through its lawsuit against POM, the FTC tried to create a new, stricter industry standard, similar to that required for pharmaceuticals, for marketing the health benefits inherent in safe food and natural food-based products. They failed,” explained Craig Cooper, Chief Legal Officer for POM Wonderful LLC. “While we are still analyzing the ruling, it is clear that we will be able to continue to promote the health benefits of our safe, food products without having our advertisements, marketing or public relations efforts preapproved by the FDA and without having to rely on double-blind, randomized, placebo-controlled studies, the standard required for pharmaceuticals. We consider this not only to be a huge win for us, but for the natural food products industry.”
Likewise, the FTC issued a statement touting that the ALJ upheld the FTC’s Complaint that “POM deceptively advertised its products as treating, preventing, or reducing the risk of heart disease, prostate cancer, and erectile dysfunction.”
It is expected that both the prosecuting arm of the FTC and POM will seek review of the decision by the full Federal Trade Commission and, of course, there may be further appeals to the U.S Court of Appeals.
This decision is most significant in its implicit recognition that companies selling food products that are unquestionably safe have the right to engage in commercial speech to inform consumers about the qualities of those products without government constraints such as FDA pre-approval or a requirement of double-blind, randomized placebo-controlled clinical trials.
Finally, it is worth noting that the claims held to be misleading were primarily found to have been health claims by implication. As the ALJ observed with regard to POM’s heart disease claims:
The evidence shows that [POM] disseminated advertisements that impliedly represented that the POM Products treat, prevent, or reduce the risk of heart disease and, in many of these same advertisements, are clinically proven to do so, by lowering blood pressure, reducing arterial plaque, and/or increasing blood flow to the heart. [POM] made these claims indirectly and obliquely, typically by presenting, through words and images, a logical syllogism that: free radicals cause or contribute to heart disease; the POM Products contain antioxidants that neutralize free radicals; and, therefore, the POM Products are effective for heart disease. Against this background, many of the advertisements further state or represent that the POM Products have been shown in one or more clinical, medical, or scientific studies, to reduce plaque, lower blood pressure, and/or improve blood flow to the heart, in a context where it is readily inferable that the referenced study results involve heart disease risk factors and, therefore, constitute clinical support for the effectiveness claim.