A federal judge in Washington on September 30 ruled against juice maker POM Wonderful LLC in a dispute with federal trade regulators over advertising rules and regulations that the company contends violate speech rights.
Lawyers for POM sought a declaration in Washington’s federal trial court that the Federal Trade Commission violated the law with new regulations that put a greater burden on companies before they can make certain health benefit claims of products.
U.S. District Judge Richard Roberts of the District of Columbia in his ruling didn’t delve into the merits of the dispute. Instead, the judge deferred to the trade commission, noting that administrative proceedings are ongoing there.
“Here, if the court resolved the issues POM raised in its declaratory judgment action, the parties would still have to litigate whether POM’s health claims about its products were false, misleading, and unsubstantiated in violation of the FTC Act,” Roberts wrote.
The judge said “continuing this parallel matter would not aid in the orderly progress of resolving the parties’ dispute. Yielding here while the administrative action proceeds will not significantly prejudice POM.”
A lawyer for POM in the trial court, Barry Coburn of Washington’s Coburn & Greenbaum, declined to comment Monday on the judge’s ruling.
POM’s complaint, filed in September 2010, came two weeks before the FTC brought an administrative complaint against the company alleging deceptive promotion of the benefits of pomegranate juice and pills.
POM alleged the FTC unlawfully bypassed the rule-making process in announcing its industry-wide intent to require companies to get U.S. Food and Drug Administration approval before making certain scientific claims. POM’s attorneys claimed the FTC improperly adopted a new standard.
Roberts said the FTC administrative proceeding will provide the forum for POM to challenge the commission’s rules and regulations.
POM “will have a full opportunity to challenge any FTC final action against it upon the conclusion of the administrative action with a fully developed administrative record available,” Roberts said.
Lawyers for the FTC said POM knew the agency was preparing to bring an administrative action at the time the company filed suit in Washington. The agency called POM’s suit “baseless.”
Roberts noted that POM in the administrative case has argued defenses that the company first brought to light in the federal district court suit. “Courts should not allow parties to use the Declaratory Judgment Act to engage in forum shopping,” the judge said.
“POM’s conduct leaves the disfavored appearance that POM hastily filed the instant case, in part, to secure tactical leverage from proceedings in this forum,” Roberts said.
Mike Scarcella is a reporter for The National Law Journal, a Legal affiliate based in New York. This article first appeared on The BLT: The Blog of Legal Times.