Pom Wonderful, LLC v. Fed. Trade Comm'n
| Decision Date | 30 January 2015 |
| Docket Number | No. 13–1060.,13–1060. |
| Citation | 777 F.3d 478 |
| Parties | POM WONDERFUL, LLC, et al., Petitioners v. FEDERAL TRADE COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Thomas C. Goldstein argued the cause for petitioners POM Wonderful, LLC, et al. With him on the briefs were John Graubert, Megan L. Rodgers, and Erik S. Jaffe.
Erik S. Jaffe was on the brief for petitioner Matthew Tupper.
Bilal K. Sayyed was on the brief for amici curiae Consumer Healthcare Products Association and Council for Responsible Nutrition in support of petitioners.
Jonathan W. Emord was on the brief for amici curiae Alliance for Natural Health USA and TechFreedom in support of petitioners.
Jonathan E. Nuechterlein, General Counsel, Federal Trade Commission, argued the cause for respondent. With him on the brief were Joel Marcus, Assistant General Counsel, and Imad D. Abyad, Attorney. John F. Daly, Attorney, Federal Trade Commission, entered an appearance.
Julie A. Murray, Scott L. Nelson, Allison M. Zieve, and Stephen Gardner were on the brief for amici curiae Public Citizen, Inc. and Center for Science in the Public Interest in support of respondent.
Before: GARLAND, Chief Judge, SRINIVASAN, Circuit Judge, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge SRINIVASAN.
POM Wonderful, LLC produces, markets, and sells a number of pomegranate-based products. In a series of advertisements from 2003 to 2010, POM touted medical studies ostensibly showing that daily consumption of its products could treat, prevent, or reduce the risk of various ailments, including heart disease, prostate cancer, and erectile dysfunction. Many of those ads mischaracterized the scientific evidence concerning the health benefits of POM's products with regard to those diseases.
In 2010, the Federal Trade Commission filed an administrative complaint charging that POM and related parties had made false, misleading, and unsubstantiated representations in violation of the Federal Trade Commission Act. After extensive administrative proceedings, the full Commission voted to hold POM and the associated parties liable for violating the FTC Act and ordered them to cease and desist from making misleading and inadequately supported claims about the health benefits of POM products. The Commission's order also bars POM and the related parties from running future ads asserting that their products treat or prevent any disease unless armed with at least two randomized, controlled, human clinical trials demonstrating statistically significant results.
POM and the associated parties petition for review of the Commission's order, arguing that the order runs afoul of the FTC Act, the Administrative Procedure Act, and the First Amendment. We deny the bulk of petitioners' challenges. The FTC Act proscribes—and the First Amendment does not protect—deceptive and misleading advertisements. Here, we see no basis for setting aside the Commission's conclusion that many of POM's ads made misleading or false claims about POM products. Contrary to petitioners' contentions, moreover, the Commission had no obligation to adhere to notice-and-comment rulemaking procedures before imposing liability in its adjudicatory proceeding. Additionally, we affirm the Commission's remedial order insofar as it requires POM to gain the support of at least one randomized, controlled, human clinical trial study before claiming a causal relationship between consumption of POM products and the treatment or prevention of any disease. We find inadequate justification, however, for the Commission's blanket requirement of at least two such studies as a precondition to any disease-related claim. In all other respects, we deny the petition for review.
Since 1987, entrepreneurs Stewart and Lynda Resnick have acquired and planted thousands of acres of pomegranate orchards in California. In 1998, they began to collaborate with doctors and scientists to investigate the potential health benefits of pomegranate consumption. They formed POM Wonderful, LLC to make, market, and sell pomegranate-based products. The products include POM Wonderful 100% Pomegranate Juice and two dietary supplements, POMxPills and POMxLiquid, which contain pomegranate extract in concentrated form. The Resnicks are the sole owners of POM Wonderful and an affiliated company, Roll Global LLC, which provides advertising and other services to POM. Those entities have engaged in a broad array of advertising campaigns promoting POM products through various media including magazine ads, newspaper inserts, billboards, posters, brochures, press releases, and website materials.
POM's promotional materials regularly referenced scientific support for the claimed health benefits of its pomegranate products. By 2010, the Resnicks, POM, and Roll had spent more than $35 million on pomegranate-related medical research, sponsoring more than one hundred studies at forty-four different institutions. This case involves studies examining the efficacy of POM's products with regard to three particular ailments: heart disease, prostate cancer, and erectile dysfunction.
1. POM sponsored a number of studies examining the capacity of its products to improve cardiovascular health. One such study, led by Dr. Michael Aviram of the Technion–Israel Institute of Technology, examined the effect of pomegranate juice consumption by patients with carotid artery stenosis. Carotid artery stenosis is the narrowing of the arteries that supply oxygenated blood to the brain, usually caused by a buildup of plaque inside the arteries.
In Dr. Aviram's study, ten patients with carotid artery stenosis consumed concentrated pomegranate juice daily for a year, while nine patients with carotid artery stenosis served as a control group and consumed no pomegranate juice. The investigators measured the change in the patients' carotid intima-media thickness (CIMT), an indicator of plaque buildup. They found that patients who consumed pomegranate juice every day experienced a reduction in CIMT of “up to 30%” after one year, while CIMT for patients in the control group increased by 9% after one year. POM Wonderful LLC, No. 9344, Initial Decision of ALJ at 115 ¶ 791 (U.S. Fed. Trade Comm'n May 17, 2012) (ALJ Initial Decision). As one of POM's experts would later testify, the Aviram study, while “suggest[ing] a benefit” from pomegranate juice consumption for patients with carotid artery stenosis, was “not at all conclusive,” in part because of the study's small sample size. Id. at 118 ¶ 802 (quoting expert testimony). In 2004, the journal Clinical Nutrition published the study. See M. Aviram et al., Pomegranate Juice Consumption for 3 Years by Patients with Carotid Artery Stenosis Reduces Common Carotid Intima–Media Thickness, Blood Pressure and LDL Oxidation, 23 Clinical Nutrition 423 (2004).
Subsequently, in 2005, a larger study, led by Dr. Dean Ornish of the University of California, San Francisco and the Preventative Medicine Research Institute, followed seventy-three patients with at least one cardiovascular risk factor for one year. The patients were randomly assigned either to drink one cup of pomegranate juice daily or to drink a placebo beverage. At the end of the study, Dr. Ornish and his co-investigators found no statistically significant difference between the treatment group and the placebo group in CIMT change or any other heart-related measure.
In 2006, a third, still larger study, led by Dr. Michael Davidson of the University of Chicago, followed 289 patients with one or more coronary heart disease risk factors. As in the Ornish study, the patients were randomly assigned to drink either pomegranate juice or a placebo beverage each day. At the end of eighteen months, Dr. Davidson and his co-investigators found no statistically significant difference in the rate of carotid intima-media thickening between patients in the treatment group and those in the placebo group. POM initially delayed publication of the adverse findings, but ultimately allowed publication of the study in 2009. See Michael H. Davidson et al., Effects of Consumption of Pomegranate Juice on Carotid Intima–Media Thickness in Men and Women at Moderate Risk for Coronary Heart Disease, 104 Am. J. Cardiology 936 (2009).
In their final report, Dr. Davidson and his co-investigators noted that they had found some evidence of an association between pomegranate juice consumption and decreased CIMT among subgroups of patients with high triglyceride levels and low levels of HDL (“good”) cholesterol. Dr. Davidson and his co-authors emphasized, however, that the findings for those subgroups were based on “post hoc exploratory analyses” unanticipated in the study protocol. As Dr. Davidson and his co-authors noted, “post hoc exploratory analyses ... should be interpreted with caution because of an increased risk of “type I errors” (i.e., false positives). See id. at 941. Even for patients in the high-risk subgroups, moreover, the reduction in arterial thickness was between 4% and 9% (depending on the measurement), substantially below the 30% decrease reported by Dr. Aviram.
Although Drs. Ornish and Davidson completed their arterial thickness studies in 2005 and 2006, respectively, a consumer reading POM's promotional materials after 2006 would not have known of those studies or that they cast doubt on Dr. Aviram's prior findings. In June 2007, for example, POM distributed a brochure featuring a statement by Dr. Aviram that “POM Wonderful Pomegranate Juice has been proven to promote cardiovascular health,” along with a description of his arterial thickness study, but with no mention of Drs. Ornish's and Davidson's contrary findings. POM Wonderful LLC, No. 9344, Opinion of the Commission, App. B fig.10, at 5 (U.S. Fed. Trade Comm'n Jan. 10, 2013) (FTC Op.). That same summer, POM published a newsletter in which it...
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