FTC Commission Upholds POM Wonderful Decision Regarding Deceptive Claims

Jan 22, 2013   

As we previously reported, on September 27, 2010, the Federal Trade Commission (“FTC“) filed an administrative complaint against POM Wonderful LLC (“POM“) for allegedly making unsubstantiated claims, which were also false or misleading in violation of Sections 5(a) and 12 of the Federal Trade Commission Act (“FTC Act“). In its Complaint, the FTC alleged that POMs claims that its products prevent, reduce the risk of, or treat heart disease, high blood pressure, prostate cancer, and erectile dysfunction (“ED”) were not supported by competent and reliable evidence. Additionally, the Complaint contained a proposed cease and desist order that would require, among other things, U.S. Food and Drug Administration (“FDA“) approval of certain disease claims for POMs products.

On May 17, 2012, an FTC Administrative Law Judge (“ALJ”) held in an Initial Decision that POMs claims that its products could treat, prevent, or reduce the risk of heart disease, prostate cancer, and ED were deceptive because these claims were not supported by sufficient competent and reliable evidence. However, the Decision rejected the FTCs theory that competent and reliable scientific evidence for the disputed claims could only be satisfied with two double-blind, randomized placebo-controlled clinical trials (RCTs). Instead, the ALJ found that competent and reliable scientific evidence could be established without RCTs. The ALJ also held that FTCs proposed requirement that POM be prohibited from making any disease claim in the future unless the claim had been pre-approved by FDA “would constitute unnecessary overreaching.”

On June 18, 2012, both POM and the FTC appealed the Initial Decision to the FTC Commissioners. POM appealed all portions of the Decision relating to the finding of liability. The FTC appealed the ALJs decision arguing that (1) all advertisements challenged in the Complaint violated the FTC Act, (2) the substantiation of disease efficacy claims should require well-designed, well-conducted RCTs, and (3) the ALJ erred in not requiring FDA approval for all future claims. The appeal briefs for POM and the FTC can be read here and here respectively. For more information regarding the POM and FTC appeals please see our previous report here.

On January 10, 2013, the FTC Commissioners issued a Final Order approving the Initial Decision 5-0 that POM made deceptive claims about treating, preventing or reducing the risk of heart disease, prostate cancer and ED. However, the Final Order differs in some respects from the Initial Decision. The Commissioners rejected the ALJs conclusion that “RCTs are not required to convey information about a food or nutrient supplement where . . . the safety of the product is known; the product creates no material risk of harm; and the product is not being advocated as an alternative to following medical advice.” The Commissioners also rejected the ALJs determination that the level of substantiation may vary depending on whether the advertiser offers the product as a replacement for traditional medical care.

The Final Order requires POM to possess two RCTs in order to substantiate claims regarding a products effectiveness in the diagnosis, treatment, or prevention of any disease. The Commissioners noted that “[a]lthough [the Commissioners] did not need to decide how many RCTs are necessary to substantiate [POMs] disease claims in order to establish liability, [they] specify a two RCT requirement in the Order for two reasons. First, such a requirement is consistent with Commission precedent.” Second, POM has “demonstrated propensity to misrepresent to their advantage the strength and outcomes of scientific research, as reflected by [the Commissions] conclusion that [POM] made false and misleading claims about serious diseases, including cancer, in a number of the advertisements.”

The Commissioners agreed with the ALJs conclusion that FDA pre-approval is not warranted as part of the remedy. The Commissioners concluded that FDA pre-approval is unnecessary because the goals are sufficiently accomplished by requiring POM to possess at least two RCTs. Significantly, the Commissioners left open the issue regarding FTCs authority to require FDA pre-approval for disease claims. It remains to be seen whether the FTC will continue to include provisions regarding FDA pre-approval in FTC consent orders in other cases. However, as we have previously reported, the FTC has increasingly included FDA pre-approval provisions in consent decrees with companies such as Dannon and Iovate. Our reports can be found here and here, respectively.

POM has 60 days to appeal the Commissions Final Order to a United States Circuit Court of Appeals. See 5 U.S.C. § 45(c). Fuerst Ittleman David & Joseph, PL will continue to monitor the development of the POM case. For more information about food and dietary supplement claims or to have Fuerst Ittleman David & Joseph, PL complete a label and website review of your products, please contact us at (305) 350-5690 or contact@fidjlaw.com.