FTC Judge Issues Decision on POM Case

LOS ANGELESAfter nearly two years and 2,000 exhibits filed in Washington, FTC's administrative law judge issued a 335-page initial order (available here) to close the complaint between FTC and POM Wonderful. The agency filed an administrative complaint in September 2010shortly after POM sued FTC on First Amendment grounds over its requirements related to health claimsalleging POM Wonderful, parent corporation Roll International Corp., and principals Stewart Resnick, Lynda Resnick and Matthew Tupper made deceptive disease prevention and treatment claims. Since that point, both sides have been active in the adjudicative process with myriad lists of experts, complaints and more detailed on FTC's website. A decision had been expected last month, but was delayed as the judge continued to pour over the documentation.

At issue were claims POM was making about the health benefits of the pomegranate, primarily based on studies the company has supported through the years. It has invested more than $35 million in research on the Wonderful variety pomegranate products; more than 70 of the 100 studies conducted have been published in peer-reviewed scientific journals. FTC's original complaint alleged the scientific studies conducted by POM Wonderful did not show the benefits promoted in its claims, did not show benefits compared to placebo, or were carried out without blinding. The agency was seeking to require not only that POM present the results of studies accurately, but that the company have pre-approval from FDA on any health claims.

In his order, D. Michael Chappell, FTC's chief administrative law judge, reviewed the proposed order from the agency, and agreed with the majority of the recommendations, finding that the respondents did not have appropriate substantiation for many claims at the time they were made, and did misrepresent some findings. As such, for a 20-year duration, POM, Roll Global and the named principals must ensure any promoted research results are accurate and not misleading, and that any claims must be not misleading and supported by "competent and reliable scientific evidence." However, Chappell disagreed on the proposed order's requirement for FDA pre-approval of claims, stating it would "constitute unnecessary overreaching," and that precedent does not support implementing such a requirement as a "bright-line" rule. In addition, Chappell noted nothing in his order prohibits the companies from making claims that are specifically permitted in labeling, "pursuant to FDA standards and regulations," which offers a "safe harbor" against future FTC challenges to certain claims.

The initial order will go before the full commission; if adopted, Roll Global, POM's parent company, would be under a 20-year order that requires scientific research to back up health benefit claims, but would not require FDA preapproval or a certain type of study for the claims.

"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," stated 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."

In an email to INSIDER, David C. Vladeck, director of the FTC Bureau of Consumer Protection, stated: "I am pleased that Judge Chappell found that all respondents including Mr. and Mrs. Resnick violated the Federal Trade Commission Act by deceptively advertising that the POM products treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction and has entered an order against them."