Tuesday, May 22, 2012

FTC ALJ rules many Pom ads misleading, unsubstantiated

In the Matter of POM Wonderful LLC and Roll Global LLC, FTC File No. 082-3122 (May 21, 2012)

Bottom line: while rejecting complaint counsel’s arguments that double-blind, randomized clinical trials were required to substantiate health claims of the sort made by Pom, the ALJ found that Pom didn’t meet the somewhat lower standard of reliable and competent scientific evidence either with respect to claims about heart health/disease, prostate health/disease, and erectile function/dysfunction.  Though I don’t think the opinion explicitly says so in so many words, it implicitly acknowledges what I think any honest observer of the general consumer market would have to: ordinary consumers are unlikely to regularly distinguish between a “supports health” claim and a “prevents disease” claim in any relevant way, meaning that the DSHEA’s framework is fundamentally rotten.  At the very least, the proceeding against Pom helps to make that point to advertisers trying to finesse the distinction, though of course I expect an appeal.

With respect to a number of ads, set out in the appendix available on the FTC’s site, the ALJ found that reasonable consumers would receive an implied claim that the Pom products treated, prevented, or reduced the risk of heart disease, prostate cancer, or erectile dysfunction, and some of the ads conveyed the further message that these effects were clinically proven.  With or without the explicit "clinically proven" language, these claims weren’t sufficiently substantiated.  The appropriate level of substantiation is “competent and reliable scientific evidence.”  When a disease treatment/prevention/risk reduction claim is made in connection with a safe food product not being offered as a substitute for medical treatment, that doesn’t require double-blind, randomized, placebo-controlled clinical trials (RCTs), but it does require some sort of clinical studies adequate to show that the product does what it claims.  Here, the weight of the expert testimony was against the implied disease claims in the ads.

Crucially, whether the substantiation was adequate to support either “highly qualified or generalized health claims” or “the express language of the advertisements” didn’t matter.  Advertisers are responsible for (material) implied messages too.  Pom argued that its ads were exaggeratedly humorous and simply provided a general “healthy” message; to the extent the ads made specific claims, Pom argued, they disclosed that the evidence came from preliminary studies.  The ALJ was unimpressed given the specific health benefits mentioned, the claims of scientific support, and sometimes references to clinical studies.  Humor might draw attention to the ads at the outset, but the presence of humor didn’t make every factual claim in the ads into puffery.  Likewise, the weasel words in the ad didn’t help: whether a consumer interprets “can” help health as “will” help health depends on context.  

Pom argued that, in the context of a food ad, consumers wouldn’t receive a “clinically proven” or other disease treatment/risk reduction message, but would think of it more like “exercise reduces your risks” instead of “drug Z reduces your risks by targeting a specific disease mechanism.”  I’m really not clear why there’s a legally relevant difference between these, and the ALJ pointed out that in either case the factual claim would still be within the scope of the FTC’s complaint here.  Nor did the qualifiers “preliminary,” “promising,” “encouraging,” or “hopeful” change the message to make it nondeceptive in the overall impression that the ads were claiming clinical proof.

Ultimately, the ALJ concluded, a significant minority of consumers acting reasonably would receive the message that there was scientific support for the disease claims.  The ads offered basic syllogisms as a way of implying their claims.  For example: free radicals cause or contribute to heart disease; Pom products contain antioxidants that neutralize free radicals; thus, the words and images of the ad implied that Pom products would be effective at fighting heart disease.

Along the way, the ALJ made some other rulings of note: first, TV appearances by one of Pom’s principals, during which she promoted the health benefits of Pom’s products, weren’t ads within the jurisdiction of the FTC if Pom didn’t pay for or sponsor them.  Given the jurisdictional limit, it wasn’t necessary to reach any First Amendment argument.

Also: an intent to convey a message alone isn’t evidence that the message was conveyed, since intent isn’t required for a violation of the FTCA and it would be “incongruous” to make intent a sword but not a shield (hmm, wish some trademark cases would think of that…).  It was unnecessary here to examine Pom’s intent because of the other evidence showing what messages were conveyed.

So, when are RCTs required?  The ALJ found that the best evidence was that RCTs would be required substantiation for a nutrient supplement if the advertiser claimed that the product treated/prevented/reduced the risk of a disease and offered it as a replacement for medical care.  But RCTs aren’t required where the safety of the product was known, it created no material risk of harm, and it wasn’t being sold as an alternative to following medical advice.

It didn’t matter whether the claim was presented as “the product reduces the risk of X” or “tests prove the product reduces the risk of X.”  In either case, experts in the relevant scientific communities would require the same level of substantiation.  (Courts sometimes recognize this in the Lanham Act context as well: in the modern world, some types of claims—health claims prominent among them--are inherently/necessarily based on scientific evidence.)

Okay, if not RCTs, then what?  The amount of substantiation experts in the field would agree is reasonable is one factor to determine the appropriate level of substantiation required for non-establishment claims.  (Except that, as the ALJ’s findings indicate, these are functionally establishment claims whether they use the words “tests prove” or not, so one would think we ought to look upward and not downward for the standard ….) 

The other factors are the products involved, the type of claim, the benefits of a truthful claim, the ease of developing substantiation for the claim, and the consequences of a false claim.  The product involved (a well-known food generally known to be safe and not claimed as a substitute for conventional therapies) weighed in favor of a less-than-pharmaceutical-grade standard.  The type of claim (health), by contrast, weighed in favor of a high standard.  The difficulty and expense of substantiation through randomized double-blinded trials (potentially hundreds of millions of dollars), combined with the potential benefits of truthful health claims, weighed against requiring full-scale clinical trials for substantiation where the product was a safe, natural food that had been in use for centuries.  Nor did the risks of falsity loom large given these same product characteristics and given that Pom wasn’t promoting its products as an alternative to conventional treatment.  Economic injury in spending on a useless product is significant, but not as important as health harms, especially since this juice would be considered a “premium” product anyway. 

Taken together, the factors led the ALJ to conclude that “competent and reliable evidence” must include clinical studies, though not necessarily RCTs, showing that Pom products would treat, prevent, or reduce the risk of the claimed conditions.  But Pom lacked such substantiation, according to the greater weight of the expert testimony.

Pom, amazingly, argued that these claims weren’t material.  The FTC usually begins with the presumption that the fact that a claim was made makes it material—you only have so much time and money for advertising, so you try to spend it wisely.  But the presumption was unnecessary here given the other evidence of materiality.  Not only did common sense support the materiality of health claims like these, Pom was well aware of the direct link between providing a scientific reason to believe and sales, e.g. an article reporting that “every time a new study [was] released touting” a health benefit, there was a “spike in sales.”  Pom sponsored over 100 studies costing over $35 million over more than a decade; it used those studies for marketing purposes as part of its “unique selling proposition.”  “[I]t defies credulity to suggest that Respondents would advertise study results related to these conditions if such advertising did not affect consumer behavior.”  Pom’s survey evidence, which purportedly found that consumers were interested in general “health” benefits rather than specifics, didn’t sufficiently inquire into their underlying beliefs and thus didn’t rebut the other evidence of materiality.

The ALJ ordered specific relief against the individual defendants found to have participated in the deceptive advertising, as well as restraints on Pom.  The order applies to Pom’s products as well as any other food, drug, or dietary supplement sold by Pom entities (they also sell citrus fruits, nuts, Fiji water and wine).  This multi-product order was justified given the transferability of the conduct.  Pom argued that their other products didn’t involve pomegranates and were so “dramatically different” that they wouldn’t use Pom research to “understand” any components of the other products.  The ALJ noted that this argument was “beside the point because the advertising technique, i.e., sponsoring research of a product’s health benefits and using the results to make disease claims, is readily transferable to advertising any food, drug or dietary supplement.”  Indeed, respondents have already sponsored research “exploring” the health benefits of Wonderful Pistachios and Fiji Water.  They argued that they had a history of “not advertising those benefits until the science is sufficiently developed.”  (Now that's chutzpah!)  The ALJ pointed out that this very case demonstrated that “Respondents’ judgment … has not always been exercised appropriately.”

The seriousness and deliberateness of the violations also supported a multi-product order covering all foods, drugs, and dietary supplements sold by Pom entities.  The ALJ specifically pointed to the seriousness of the health conditions at issue, consumers’ inability to evaluate the evidence for themselves, and the extent of the advertising.  Pom argued that the ALJ should give weight to Pom’s internal ad-vetting procedures, but those hadn’t stopped a bunch of the ads at issue here.  Thus, respondents will be barred from making representations that any covered product was effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease, unless at the time they were made the representations were non-misleading and they possessed and relied upon competent and reliable scientific evidence, sufficient in quality and quantity to substantiate the representations, based on standards generally accepted in the relevant scientific fields when considered in light of the entire body of relevant and reliable scientific evidence.

The ALJ rejected complaint counsel’s request for an order requiring FDA pre-approval for any direct prevention/treatment claim (as opposed to “clinical studies suggest that …” claims otherwise supported by competent and reliable evidence).  The FDA standard was too high for these particular claims about a safe, known food not being promoted as an alternative to conventional medical treatment.  Complaint counsel argued that an FDA standard would provide clear and precise guidance, but the ALJ didn’t accept that as a sufficient justification for these products, especially given that complaint counsel's proposed standards have their own uncertainties and difficulties of interpretation, such as what would count as an unqualified disease claim v. a qualified health benefit claim.  Anyway, there was no reason to think that “competent and reliable evidence” was unclear.

Other parts of the order generally prohibited misrepresentations and provided a safe harbor for claims approved by the FDA.

Overall, while a defeat for the FTC’s most aggressive position, this case affirms that food etc. producers making health claims need good clinical evidence substantiating their claims.  Always assuming the order holds up (and, because it adopted a less-than-RCT standard, I expect it is likely to do so), it’s unlikely to represent much of a retreat in this area, where concerns about consumers’ health and inability to evaluate scientific evidence for themselves will remain persuasive.

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