The Federal Trade Commission (FTC) found petitioners POM Wonderful LLC, Roll Global LLC, Stewart Resnick, Lynda Rae Resnick, and Matthew Tupper (collectively, POM) liable for making false or misleading statements in product advertisements, in violation of the Federal Trade Commission Act (FTCA). POM asked the D.C. Circuit to invalidate the FTC’s order, arguing, among other things, that the order violates POM’s First Amendment free speech rights. In that regard, POM criticized the FTC for not producing extrinsic evidence of consumer reaction to POM’s advertisements before interpreting the advertising claims and determining that the advertisements were misleading. POM and its amici also argued that the FTC’s order departed from the agency’s past practice of using a flexible standard to assess substantiation for health and disease claims and that the FTC’s purportedly new approach would hurt consumers by limiting access to important information about developing science.
Public Citizen and the Center for Science in the Public Interest submitted an amicus brief in support of the FTC in the D.C. Circuit. The brief demonstrated that the FTC is not required to submit extrinsic evidence of consumer deception before finding that advertising claims are misleading and thus subject to proscription. It also explained that the FTC’s order followed the agency’s longstanding, flexible approach to determine that POM’s flawed pilot studies and other supposedly supportive research were insufficient to substantiate the serious disease-related claims that POM made about its products, particularly in light of the scientific evidence in POM’s own hands that contradicted its assertions. The brief also discussed the strong policy rationale supporting the FTC’s approach, including the agency’s preference for randomized, controlled trials to support disease treatment and prevention claims. The FTC’s approach appropriately accommodates companies’ interest in relying on developing science while protecting consumers from companies that peddle in falsehoods and misleading disease claims.
The D.C. Circuit issued its decision on January 30, 2015, and denied the bulk of POM’s challenges. The opinion summarized its holding: “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. In all other respects, we deny the petition for review.”