A California-based pomegranate juice maker lost a labeling challenge Friday, in a high-profile case over the limits of commercial free speech.
In a unanimous decision by a three-judge panel, the U.S. Court of Appeals for the District of Columbia Circuit largely rejected claims by POM Wonderful that the Federal Trade Commission went too far in targeting the company’s aggressive and allegedly misleading health claims.
“The Commission’s findings of deception are supported by substantial evidence in the record,” Judge Sri Srinivasan wrote in the 45-page opinion.
From 2002 to 2010, sales for Pom Wonderful juice and POMx pills, described by the company as a pomegranate supplement, totaled close to $250 million, according to the FTC. The privately held company prides itself on having grown the pomegranate market, with the roughly 32,000 acres of pomegranates planted in California a tenfold increase over the planted acreage in 1976.
Health claims have anchored the company’s aggressive marketing.
Running in magazines from Playboy to Men’s Health, Pom Wonderful ads have included vivid language such as “Cheat Death” and “Drink to Prostate Health,” as well as myriad references to scientific studies.
One ad, for instance, declared that “a clinical pilot study” showed that a daily 8-ounce glass of Pom Wonderful reduces plaque in the arteries up to 30 percent. The FTC countered that the study was “tiny and methodologically flawed.” Much larger, double-blind studies “showed no significant plaque-reducing benefits at all,” according to the trade commission.
After a trial whose transcript spanned some 3,300 pages, an FTC administrative trial judge previously found that 19 Pom Wonderful claims were false or misleading. In January 2013, the full Federal Trade Commission went further, concluding that 36 ads or promotional materials were false or misleading.
“Insofar as the FTC imposed liability on petitioners for the nineteen ads found to be deceptive by the administrative law judge, the Commission sanctioned petitioners for misleading speech unprotected by the First Amendment,” Srinivasan wrote in the opinion issued Friday.
In a bit of victory for POM Wonderful and other companies, though, the appellate court agreed with the company that it was too much for regulators to require two randomized controlled trials to support a health claim, instead of just one.
“Requiring additional RCTs without adequate justification exacts considerable costs, and not just in terms of the substantial resources often necessary to design and conduct a properly randomized and controlled human clinical trial,” Srinivasan wrote.
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