FTC and POM Wonderful go head-to-head

The lawyers at POM Wonderful are beyond busy these days. POM is involved in at least six significant legal and regulatory proceedings, several indicative of the renewed scrutiny placed on claims by the Federal Trade Commission (FTC) and Food and Drug Administration (FDA).

Let's start with the FTC, who, in a widely anticipated move, filed an official administrative complaint against POM yesterday, charging the company with "false and unsubstantiated claims" that their products can "prevent or treat heart disease, prostate cancer, and erectile dysfunction." The complaint names POM Wonderful, its sister company Roll International, and company principals Stewart Resnick, Lynda Resnick and Matthew Tupper, and makes claims charges against POM's juices and supplements. According to David Vladeck, Director of the FTC's Bureau of Consumer Protection, "Any consumer who sees POM Wonderful products as a silver bullet against disease has been misled. When a company touts scientific research in its advertising, the research must squarely support the claims made. Contrary to POM Wonderful's advertising, the available scientific information does not prove that POM Juice or POMx effectively treats or prevents these illnesses."

POM filed its own preemptive lawsuit against the FTC on September 15, accusing the agency of setting new standards in recent settlements with Nestle Healthcare Nutrition and Iovate Health Sciences (makers of the controversial weight-loss product Hydroxycut) that impair its ability to do business. The broader impact of these settlements suggests that FTC will discount scientific studies performed on animals or isolated ingredients, instead requiring a minimum of two human trials. Furthermore, FTC will start enforcing requirements for more pre-market approval by the Food and Drug Administration for certain health claims. In its filing, POM states that FTC's actions injure "POM's goodwill and brand identification with consumers as the juice company that focuses on science and good health." The FDA challenged several claims by POM back in February 2010, including pomegranate's ability to reduce atherosclerosis, lower blood pressure, delay prostate cancer, and improve erectile function. The claims featured prominently in POM's advertising across national magazines and newspapers, company websites, billboards, and product packaging.

On a smaller scale, POM took home a victory in recent weeks against Welch's in a California decision finding Welch's guilty of intentionally misleading advertising. The court agreed that Welch's "100% Juice White Grape Pomegranate" claims were unfounded and in violation of the Lanham Act, which protects companies from false advertising by competitors. Welch's product contains less than one ounce of pomegranate juice per 64-ounce bottle, according to POM. Similar cases filed by POM are pending against Coca-Cola, PepsiCo and Ocean Spray for their respective pomegranate juice products and claims.

NBJ bottom line: But there's even more to this claims saga. A class action suit against POM is also pending in Florida, accusing the company of misleading health claims tied to the warnings from FDA earlier this year. Many experts see this as more evidence of the industry's increasingly vulnerable position in using claims-based marketing. According to Ivan Wasserman of Manatt, Phelps & Phillips, class-action lawyers often troll the regulatory agencies' dockets looking for recall notices and claims warnings. When they find one, "the next day there'll be 25 attorneys announcing an intent to file a lawsuit and looking for plaintiffs," Wasserman told NBJ this summer.

The lines around acceptable claims marketing are clearly shifting thanks to heavier and heavier pushes by FDA and FTC to assert more control over the process. It doesn't help that POM continues to behave so aggressively in its defiance of regulators, but the company stands behind its $35-million investment in clinical studies and clearly feels that new regulatory requirements pose serious consequences to its success as a business. The back-and-forth legal wrangling between POM and the FTC is making the pomegranate something of a crucible for just what role science and health claims will play in the nutrition world.

With regulatory sanctions, legal proceedings and pricey consumer lawsuits all on the table, it's getting harder and harder for industry to tell good news about its products. This mounting skepticism and disdain among U.S. regulators toward "insufficient" science and "aggressive" advertising could spell real trouble for functional foods and supplement companies, not to mention the marketing department of every company in the nutrition industry.

NBJ will cover POM Wonderful's legal woes and the broader issues surrounding health-claims marketing in our October issue on raw materials & ingredient supply. Subscribe now via our website.

Related NBJ links:

U.S. Nutrition Companies Shell-Shocked by Spate of Pricey Consumer Lawsuits

FDA Steps Up Enforcement Under Obama Administration

NBJ 2010 Healthy Foods Report

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