Juice Maker Charges FTC with Exceeding Authority in Regulating Health Claims
POM Wonderful LLC has filed a complaint for declaratory relief in a D.C. federal court against the Federal Trade Commission (FTC), alleging that it (i) exceeded its authority in requiring Food and Drug Administration (FDA) preapproval of health-related claims on food products, that is, those claims stating that a product treats, mitigates or prevents disease, and substantiation of non-disease-related claims with two “well-controlled” clinical studies; (ii) violated advertisers’ First and Fifth Amendment rights by requiring compliance with these new standards; and (iii) failed to comply with notice and comment rulemaking procedures in establishing the standards. POM Wonderful LLC v. FTC, No. 10-1539 (D.D.C., filed September 13, 2010).
According to the complaint, FTC has advised POM Wonderful that it must comply with standards recently announced in consent orders against other companies and now apparently applicable to the food and dietary supplement industry as a whole. Additional information about one of those orders appears in Issue 356 of this Update. POM Wonderful contends that these standards apply “regardless of whether or not the [advertising] claims are true or supported by competent, reliable scientific evidence.” Calling the standards a significant departure from FTC’s prior regulation of “deceptive” speech or advertising only, the plaintiff alleges that FTC has exceeded its statutory authority and is “encroaching upon the exclusive authority reserved for the FDA.”
POM Wonderful also alleges that it has spent “tens of millions of dollars in funding independent research and in establishing a research program to better understand and promote the nutritional qualities and health benefits of pomegranates. The new FTC rules essentially bar POM from discussing or disclosing the results of its research and the benefits of its products,” and thus, the agency has violated its free speech rights. The plaintiff characterizes this agency action as a prior restraint on truthful speech. The plaintiff seeks declarations that the new requirements are invalid, the agency exceeded its statutory jurisdiction, requiring FDA preapproval violates First and Fifth Amendment rights, and FTC failed to comply with rulemaking procedures and has acted arbitrarily, capriciously and contrary to law. The company also seeks an award of costs.
Meanwhile, a federal jury in California has reportedly rendered a verdict against a POM Wonderful competitor in a lawsuit contending that Welch’s misled consumers by labeling its product “100% Juice White Grape Pomegranate.” POM Wonderful brought the litigation under the Lanham Act, claiming that the false and deceptive label on Welch’s product, which contains mostly inexpensive apple and white grape juices, along with color and flavor enhancers, was designed to make consumers believe that the product contained a significant amount of pomegranate juice. It is unclear whether any damages were awarded. POM Wonderful President Matt Tupper was quoted as saying, “The primary objective of our lawsuit against Welch’s was to raise awareness of this widespread practice in the juice industry, and we are happy to have achieved this important goal.” See PR Newswire, September 15, 2010.
