Juice maker POM Wonderful has filed suit against the Federal Trade Commission in federal district court in Washington, claiming the agency has created a new standard for the evaluation of deceptive advertising that tramples the company’s free speech rights.
Lawyers for POM, including Barry Coburn of Washington’s Coburn & Coffman, are seeking a declaration in the U.S. District Court for the District of Columbia that the FTC’s new standard is invalid and that the agency has overstepped its authority by allegedly encroaching on the Food and Drug Administration.
The new standards, POM’s attorneys said, requires advertisers to obtain FDA approval before making certain types of health related claims — specifically, disease claims — about food, beverages and dietary supplements.
The FTC “specifically advised” POM of the new standard and said it carries legal force, according to the Sept. 13 suit against the agency. The court papers do not indicate when the FTC made this notification. The new standard, according to POM’s lawyers, was first announced in FTC settlements with Nestlé Healthcare Nutrition, Inc. and Iovate Health Sciences USA, Inc. in mid-July.
POM’s attorneys said the FTC requirement comes “regardless of whether or not the claims are true or supported by competent, reliable scientific evidence.” The standard prevents POM from “truthfully advertising” the health benefit attributes of its products, according to the complaint.
The FTC is also requiring two clinical studies for non-disease claims, a requirement that POM’s lawyers say “represents a dramatic change in the level of substantiation required to establish the truth of these claims.”
“[POM] has spent millions establishing a brand identity that is synonymous with good health,” POM’s lawyers said in court papers. “The FTC, by its acts, is injuring POM’s goodwill and brand identification with consumers as the juice company that focuses on science and good health.” The FTC’s rules have “disrupted POM’s present and ongoing business,” according to attorneys for the juice maker, and impose “significant new burdens and risks on advertisers.”
POM’s lawyers said the FTC had never before required prior approval of advertising statements. The attorneys said the FTC is encroaching on the authority controlled by the FDA. The new rules, the lawyers argue, substantially change the legal definition of deceptive advertising.
Lawyers for POM also allege the new requirement violates POM’s Fifth Amendment right to due process. Attorneys for the juice maker claim the new requirement diminish the value of POM’s research program and strategy.
A spokesman for the FTC, Mitchell Katz, referred questions to agency spokeswoman Betsy Lordan, who was not immediately reached for comment Tuesday evening. No lawyer for the FTC has filed a notice of appearance in the case, which is assigned to Judge Richard Roberts.
Coburn declined to comment. Another lawyer for POM, Kristina Diaz of the Roll Law Group, in Los Angeles, was not immediately reached for comment. A POM spokesman, Rob Six of Roll International, did not provide immediate comment on the suit.
It remained unclear late Tuesday whether POM is still being investigated by the FTC, as The National Law Journal reported in late July.
On July 23, lawyers for the juice maker successfully sought a temporary restraining order in District of Columbia Superior Court blocking The National Law Journal from identifying the fact the FTC had an ongoing regulatory investigation of POM.
A week after a judge issued the order, POM voluntarily asked that it be rescinded. At the time, The National Law Journal — backed by an amicus brief joined by The Washington Post, The New York Times and other media outlets — had asked the D.C. Court of Appeals to overturn the judge’s ruling.
Hogan Lovells is suing POM for more than $666,000 in unpaid attorneys fees and expenses for work performed in an FTC regulatory inquiry. That fee suit, which revealed the existence of an FTC investigation targeting POM, remains pending in D.C. Superior Court.
Mike Scarcella can be contacted at firstname.lastname@example.org.