POM Wonderful Loses Bid to Block FTC Deceptive-Ad ClaimsAndrew Zajac
POM Wonderful LLC’s claims that its pomegranate products combat heart disease, prostate cancer and erectile dysfunction aren’t adequately backed by research, a federal appeals panel ruled, upholding a Federal Trade Commission ban on deceptive advertising by the company.
“We see no basis for setting aside the commission’s conclusion that many of POM’s ads made misleading or false claims,” U.S. Circuit Judge Sri Srinivasan wrote for a three-judge panel in Washington. “The FTC proscribes -- and the First Amendment does not protect -- deceptive and misleading advertisements.”
The ruling is a setback in POM’s aggressive marketing of pomegranates, which includes a successful challenge in the U.S. Supreme Court to Coca-Cola Co., the world’s largest beverage company, over its labeling of products containing the juice of the heavily seeded fruit. POM had sued Coca-Cola claiming a label on one of its drinks promoting pomegranate was misleading and the Supreme Court ruled in June the lawsuit could proceed.
“Consumers know that pomegranate juice is inherently healthy, and POM Wonderful has always communicated with consumers in a transparent, honest manner, delivering valuable information about the potential health benefits of our products,” Rob Six, a spokesman for POM, said in an e-mailed statement on Friday’s appeals court ruling.
POM’s owners, Stewart and Lynda Resnick, introduced the garnet-red juice in the curvy little bottle in 2002, touching off a marketing craze of flavored fruit teas, martinis and salad dressings. The Resnicks are the biggest U.S. growers of pomegranates and pistachios.
The POM boom was fueled by advertising claims, challenged by the FTC, that described pomegranates as “the antioxidant superpower” offering protection against heart and prostate maladies as well as some of the enhancement attributes of Viagra.
The FTC in January 2013 upheld the findings of an administrative law judge that POM’s advertising was deceptive and ordered the company to stop claiming that its products are effective in treating, curing or preventing any disease “unless the claim is supported by two randomized, well-controlled, human clinical trials.”
Friday’s ruling pared back the FTC’s study requirement for POM to one clinical trial. Mandating more than one such study “exacts considerable costs” and could deny consumers accurate information about a product’s disease-prevention attributes documentable in a single, large, well-designed clinical trial, according to Srinivasan’s ruling.
“We are grateful that the court substantially reduced the requirement that the FTC tried to enforce on us,” to conduct multiple clinical trials, Six said in his statement.
POM reported spending at least $34 million researching the health benefits of pomegranates by the time the FTC filed its complaint against the Los Angeles-based company in 2010.
POM “routinely distorted the scientific record and omitted the negative results” of its studies, according to an FTC filing in the court case. “POM had not substantiated any of its disease claims with positive results from even one well-controlled clinical trial,” FTC lawyers said in the filing.
POM countered that at most its claims are only “potentially misleading” and the FTC was obliged to apply constitutional free-speech protections to advertising “based upon accurate and verifiable information that did not actually mislead any consumer,” company lawyers wrote.
Friday’s ruling “is a victory for consumers,” upholding the standard that advertisers, including food and dietary supplement marketers like POM, who sell products for serious health conditions “must have rigorous science to back up those claims,” FTC Chairwoman Edith Ramirez said in an e-mailed statement.
In the Supreme Court case, POM, in an 8-0 vote, was allowed to revive a six-year-old false-advertising lawsuit against Coca-Cola for its labeling of Pomegranate Blueberry Flavored Blend of Five Juices, a concoction that is 99.4 percent grape juice.
The label is deceptive because the larger lettering of “pomegranate” belies the tiny amount of pomegranate juice in the product, POM contended.
Coca-Cola, based in Atlanta, argued that POM’s suit was out of bounds because the name and label of its product meet Food and Drug Administration regulations.
The Supreme Court ruling gives companies more room to police competing products for misleading claims and allows them to pursue false-advertising suits even when the FDA regulates a product.
The health claims case is POM Wonderful LLC v. FTC, 13-1060, U.S. Court of Appeals, District of Columbia (Washington).