United States: DC Circuit Court Holds That Two Studies Are Not Required For Certain Advertising Claims

Last Updated: February 20 2015
Article by Daniel S. Blynn, Samuel D. Boro and Randal M. Shaheen

On January 30, 2015, the US Court of Appeals for the DC Circuit issued its decision in POM Wonderful, LLC v. FTC.1 The court generally affirmed the Federal Trade Commission's (FTC or Commission) January 2013 findings that many of POM's advertisements made misleading or false claims about POM's pomegranate juice and supplement products. Notably, however, the court rejected the FTC's position that advertising claims about a product's effects on disease prevention and treatment always require at least two gold-standard "randomized and controlled human clinical trials" (RCTs). As explained below, the denial of the blanket requirement of two RCTs will have several important implications for advertisers.

The Commission's January 2013 Findings

In January 2013, the Commission upheld an Administrative Law Judge's (ALJ) decision that POM deceptively advertised its products and did not have adequate support for disease prevention and treatment claims. The POM advertisements at issue represented that the products treated or prevented heart disease, prostate cancer, and erectile dysfunction. The ALJ explained that the studies POM cited in its advertisements contained numerous perceived deficiencies, such as small sample sizes, lacks of control groups, and/or statistically insignificant results. Moreover, POM failed to disclose to consumers that, for some of the advertised claims, other studies had shown no effect on the studied diseases.

The Commission went beyond the ALJ's decision and found that POM made deceptive claims in 36 advertisements, and issued an injunction prohibiting POM from making any claim that a food, drug, or dietary supplement is "effective in diagnosis, cure, mitigation, treatment, or prevention of any disease," unless the claim is supported by two RCTs.

The DC Circuit Affirms the FTC's Conclusion that POM's Advertising Claims Were Deceptive, But Rejects the Two-Study Standard

On appeal, the DC Circuit affirmed the FTC's conclusion that POM's advertising claims were deceptive, but rejected the two RCT standard. The FTC took issue with POM's selective use of study results in its advertising. In particular, the Commission held that POM cherry-picked results from the most favorable studies and gave no indication that there had been contrary results reached in other studies.

Both on appeal and at the Commission POM argued that its claims actually were qualified health claims for which a two RCT standard was certainly inappropriate. The DC Circuit affirmed the Commission's rejection of this defense, finding that, although the ads referred to the studies as "preliminary" or "promising," the overall context of the ad conveyed a more positive spin to the studies rather than merely providing an objective disclaimer. Both the Commission and the DC Circuit suggested that a disclaimer such as "evidence in support of this claim is inconclusive" would have been a more effective, albeit less marketing friendly, disclaimer. However, this narrow approach as to what language sufficiently qualifies a health claim later was used against the Commission. The DC Circuit rejected the Commission's argument that the two RCT standard was not unduly burdensome because it only applied to "unqualified claims," finding only that claims using words like "inconclusive" or "additional research is necessary" likely would pass muster as unqualified.

With respect to the Commission's two-RCT requirement, POM argued that in certain situations, practical, ethical, and economic constraints and prohibitive cost burdens made it unfeasible to conduct RCTs on certain food products. The court was unpersuaded. Rather, the court emphasized that the need for RCTs is driven by the particular claim made, so "if the cost of an RCT proves prohibitive, petitioners can choose to specify a lower level of substantiation for their claims."

The court accepted the notion that RCTs likely would be necessary to support a disease reduction or treatment claim, but rejected the blanket requirement of two RCTs on several grounds. First, the court rejected the FTC's reliance on precedent and prior consent orders. Second, the court rejected the two-RCT standard based on a Central Hudson-First Amendment commercial speech analysis.

More specifically, the FTC argued that precedent dictated the two-RCT standard, but the court found that the Commission's reliance on In re Thompson Medical Co.2 was misplaced. In Thompson Medical, two RCTs were warranted to substantiate claims involving the efficacy of over-the-counter painkillers, but the reasoning for this requirement depended on the specific nature of the product and the claims made. The FTC also argued that the two-RCT standard had been applied in previous consent orders. 3 The court rejected the Commission's reliance on these as well because the consent orders were not litigated matters and the orders were limited to specific disease claims rather than all disease claims. Moreover, many other consent orders regarding disease claims only required "competent and reliable scientific evidence" rather than a rigid two-RCT standard to substantiate disease claims.

The court noted, however, that two RCTs may be required in some circumstances depending on the product and the specific claim made. For example, the FTC may require RCT substantiation as a forward-looking remedy to act as a corrective to past deceptive claims made without RCT substantiation, so long as the requirement of RCTs for future claims is "tightly tethered to the goal of preventing deception." While an RCT may be required, a blanket requirement for two RCTs is too broad under a Central Hudson commercial speech analysis. The FTC still bears the burden to demonstrate a "reasonable fit" between the means chosen and the government interest pursued. Indeed, the court underscored that:

It of course is true that, all else being equal, two RCTs would provide more reliable scientific evidence than one RCT, affording added assurance against misleading claims. It is equally true that three RCTs would provide more certainty than two, and four would yield more certainty still.

In light of this, the court held that prior precedent goes against the FTC's position advocating two RCTs, and, instead, demonstrates that "two-RCT remedial provisions are only selectively imposed in specific circumstances based on particular concerns." Regarding POM's advertisements, the court upheld the FTC's order requiring the disease claims to be substantiated by at least one RCT, but the blanket two-RCT requirement for all disease-related claims was held to be unjustified.

Key Takeaways for Advertisers

The DC Circuit's decision provides several lessons for advertisers:

  • Courts generally will give deference to the FTC to interpret the claims made by advertisements. This deference includes FTC interpretations of qualifying language such as "promising" or "preliminary." In POM Wonderful, the FTC determined that these qualifiers did not sufficiently convey the limitations of the studies performed, and the court saw no reason to reject this decision. Instead the court noted that such disclaimers will have to use unambiguous terms, such as "inconclusive" or "more research needed."
  • When making disease claims, an advertiser does not necessarily have to conduct two RCTs to substantiate its claims. Rather, the relevant analysis for the appropriateness of a disease claim is the "total body of the evidence." In some situations, even a clinical trial combined with observational research may be sufficient for a disease claim. Advertisers should consider the nature of the product and the specific advertising claims being made when determining what kind of testing will be necessary to substantiate the claims.
  • Going forward, the FTC will not be able to mandate two-RCT substantiation in all situations, but its power to dictate other substantiation remedies has not been significantly diminished. For disease-related claims, advertisers should anticipate the need for RCT substantiation, or something very close to that. The cost of substantiation is lowered by the rejection of the two-RCT requirement, but claims must still be supported by competent and reliable scientific evidence at the time they are made. The FTC likely will take the DC Circuit's decision into consideration in its next enforcement actions. With the courts' giving great deference to the FTC's determinations, advertisers still need to weigh their claims carefully.

Footnotes

1. -- F.3d --, No. 13-1060, 2015 WL 394093 (D.C. Cir. Jan. 30, 2015).

2. 104 F.T.C. 648 (1984).

3. See, e.g., In re L'Occitane, Inc., No. C-4445, 2014 WL 1493613 (FTC Mar. 27, 2014); In re Dannon Co., Inc., No. C-4313, 2011 WL 479884 (FTC Jan. 31, 2011); In re Nestlé Healthcare Nutrition, Inc., No. C-4312, 2011 WL 188928 (FTC Jan. 12, 2011).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.