POM loses to FTC

by Steve Gardner

The DC Circuit just issued its opinion in POM’s appeal of the FTC’s excellent order against POM for some of its marketing practices. 

The opinion is 45 pages long, so let me provide the Court’s own summary of the opinion:

The FTC Act proscribes—and the First Amendment does not protect—deceptive and misleading advertisements. 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. Contrary to petitioners’ contentions, moreover, the Commission had no obligation to adhere to notice-and-comment rulemaking procedures before imposing liability in its adjudicatory proceeding. Additionally, we affirm the Commission’s remedial order insofar as it requires POM to gain the support of at least one randomized, controlled, human clinical trial study before claiming a causal relationship between consumption of POM products and the treatment or prevention of any disease. We find inadequate justification, however, for the Commission’s blanket requirement of at least two such studies as a precondition to any disease-related claim. 

Public Citizen and CSPI filed an amicus brief in this case.

The opinion is overall a resounding victory for the FTC and thus for consumers. The only point where FTC lost is the Court’s conclusion, based on a Central Hudson review of POM’s commercial speech rights, that—although it was okay for the FTC’s order to require one clinical study if POM made claims related to disease—it was just too much restriction on POM’s speech to require two such studies.
This is an excessive deference to corporate speech rights. The requirement of two clinical studies is the FDA's standard requirement before approval of an actual drug. And these are in fact illegal drug claims, barred by the Food, Drug, and Cosmetic Act, but FTC Act doesn’t have that jurisdiction, so all the FTC could do was require the same level of proof that would be required of any other company that properly sought FDA approval for a drug/disease claim. The Public Citizen/CSPI amicus addresses these issues beginning at page 11.
Nonetheless, an excellent win for consumers and the FTC, with lots of good language about deceptive marketing.


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