(In the Matter of POM Wonderful LLC and Roll International Corp., companies, and Stewart A. Resnick, Lynda Rae Resnick, and Matthew Tupper, individually and as officers of the companies)
[author: Daniel G. DePasquale]
Chief Administrative Law Judge D. Michael Chappell has upheld a Federal Trade Commission (“FTC”) complaint accusing POM Wonderful LLC (“POM Wonderful”), the maker of best-selling POM Wonderful 100% Pomegranate Juice (“POM Juice”), of making deceptive advertising claims regarding the health benefits of its popular beverage. The Initial Decision (“The Decision”) would prohibit POM Wonderful, its sister company Roll Global LLC, and principals of the company, from making any representation regarding the “health benefits, performance, or efficacy” of its product offerings unless such claims were backed up by scientific evidence that was “competent and reliable.” The Federal Trade Commission Act (“FTC Act”) grants the Federal Trade Commission the authority to “prevent unfair or deceptive acts or practices affecting commerce by persons partnerships or corporations” 15 U.S.C. § 45(a)(1)–(2) (2012) though, notably, only the printed advertisements paid for by the company were considered “advertisements” as part of the alleged false claims.
The complaint, filed by the FTC in September 2010 and which also included allegations regarding POMx supplements, accused POM Wonderful of violations of Federal law by its alleged false and misleading representations. At issue were the company’s claims that use of its products would treat, prevent, or reduce the risk of prostate cancer, heart disease, and erectile dysfunction and that scientific data supported such findings. The Decision is subject to appeal at the request of any party. After thirty (30) days, however, it will become a decision of the Commission and, barring any appeal, will terminate in twenty (20) years.
In its complaint the FTC, among other claims, alleges that the company, impliedly or expressly, made false and misleading claims including:
1. drinking eight ounces of POM Juice, or taking one POMx Pill or
one teaspoon of POMx Liquid, daily, prevents or reduces the risk of
heart disease, including by (1) decreasing arterial plaque, (2)
lowering blood pressure, and/or (3) improving blood flow to
the heart; and
2. drinking eight ounces of POM Juice, or taking one POMx Pill or
one teaspoon of POMx Liquid, daily, treats heart disease, including
by (1) decreasing arterial plaque,(2) lowering blood pressure,
and/or (3) improving blood flow to the heart.
According to the Decision, sales of POM Juice from “September 2002 to November 2010 totaled approximately $247,739,776” in the United States alone. POM Wonderful was said to have relied on results from a study that was “unblended” and “uncontrolled” regarding its advertising claims in relation to prostate cancer. In addition, their claims related to heart disease were alleged to be flawed as well. The complaint states that POM Wonderful, as early as May 2007, knew that a study it had funded “showed no significant difference after 18 months between consumption of pomegranate juice and a control beverage in reducing carotid arterial wall thickness.” Despite these findings, however, the company continued to market the benefits of its products in the absence of the scientific data to back up the advertisements. The Decision, with regard to the erectile dysfunction claims, found that the ads were false and unsubstantiated specifically because the company could not validate the claim that its products were any more effective than a placebo.
The Decision underscored the serious nature of alleged false claims since they related to potential health risks of the general public and “pertained to serious diseases and dysfunction of the body, including cancer.” In addition, Judge Chappell opined that because of the nature of the advertisements, general consumers would “readily infer that the study results constituted clinical proof of effectiveness for the referenced maladies.” Judge Chappell stopped short of requiring Food and Drug Administration (“FDA”) approval for representations made by the company citing “unnecessary overreaching” as his reason for restraint in that regard.