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The Federal Trade Commission has a long reach, but its grip is not quite as strong as it was before the D.C. Circuit’s recent opinion in PomWonderful, LLC v. FTC, No. 13-1060, 2015 WL 394093 (D.C. Cir. Jan. 30, 2015). Section 5 of the FTC Act prohibits “unfair or deceptive acts or practices in or affecting commerce” and grants the FTC the power to enforce.  Since this broad mandate was enacted during the administrative explosion that accompanied the New Deal, the FTC has parlayed it into regulatory authority over a broad array of commercial activities, including data privacy, spam emails, product labeling, and marketing and advertising of all kinds. The drug and medical device industries certainly feel the FTC’s presence, including its regulation of advertising in connection with over-the-counter products.

It turns out, however, that product sellers have First Amendment rights that limit the FTC’s prerogative.  PomWonderful does not involve a drug of any kind, but it is fascinating reading because it involves fruit juice products for which the seller made numerous efficacy claims, such as that consuming the products would treat or reduce the risk of certain diseases.  The claims are similar to those we sometimes hear on the radio promoting dietary supplements or herbal remedies:

  • “Proven to promote cardiovascular health”
  • “30% decrease is arterial plaque”
  • “Prolonged post-prostate surgery PSA doubling time”

These are just a few examples, and there were others involving sexual function that we will leave aside for the moment.  But you get the idea.  The seller was engaged in more than mere puffery or vague claims that the juice was “good for you.”  These were specific disease-related efficacy claims.

To be sure, the juice seller had invested millions in scientific research at reputable institutions, and it could cite clinical trials that offered support for its claims. Id. at *2.  But was the scientific support sufficient such that the claims were not unfair or deceptive?  That is where our interest was piqued.  The FTC determined that the seller’s citation to clinical trials was selective, unbalanced, and unfair, and it ordered the juice seller to cease and desist.

Why does that interest us? Because the FTC applied an across-the-board rule that that any disease-related claim had to be substantiated by two randomized clinical trials.  When it comes to drugs, the FDA imposes a two-RCT requirement in certain contexts, including in the New Drug Application process, where the drug developer typically has to support its marketing application with adequate data from two large, controlled clinical trials.

The FTC tried to have it that way too, but the D.C. Circuit reeled in the commission ever so slightly. The D.C. Circuit affirmed the FTC’s order on the basis that the commission’s findings of false and misleading advertising were supported by substantial evidence.  The court, however, rejected a blanket two-RCT rule as an unconstitutional restriction on commercial speech under the two-part Central Hudson test.  Id. at *19.  Under the first prong of that test, the government’s asserted interest in restricting speech must be substantial, which was easily satisfied in this case by its interest in“ensuring the accuracy of commercial information in the marketplace.”  Id. at *20.  Second, the government’s means of restriction must “directly advance[ ] the governmental interest” and be “not more extensive than is necessary to serve that interest.”  Id.  This is “something short of a least restrictive means standard.”  Id. To the extent the FTC was requiring clinical trial support for disease-related claims generally, that was okay because mandating valid scientific support for disease-related efficacy claims was tailored to the goal of ensuring accuracy in advertising.  Id. 

Requiring two clinical trials as a blanket rule, however, did not pass muster.  It would often be assuring to have more than one trial, or more than two, or more than three.  Id.  But if just one clinical trial supports a truthful claim, the government’s proposed two-RCT rule bore no reasonable fit to the objective.  It also potentially deprived consumers of useful information.  The D.C. Circuit explained it this way:

Requiring additional RCTs without adequate justification exacts considerable costs, and not just in terms of the substantial resources often necessary to design and conduct a properly randomized and controlled human clinical trial.  If there is a categorical bar against claims about the disease-related benefits of a food product or dietary supplement in the absence of two RCTs, consumers may be denied useful, truthful information about products with a demonstrated capacity to treat or prevent serious disease. That would subvert rather than promote the objectives of the commercial speech doctrine.

 . . .

No matter how robust the results of a completed RCT, and no matter how compelling a battery of supporting research, the order would always bar an disease-related claims unless petitioners clear the magic line of two RCTs.

Id. at *21 (emphasis added).  Useful, truthful information.  Sellers are usually allowed to provide that kind of information to consumers, and the D.C. Circuit’s reasoning here seems solid.  It also jibes with the FTC’s own position, stated elsewhere, that “[i]n most situations, the quality of studies will be more important than quantity.”  Id. 

In the end, it was the rigidity of the FTC’s approach that did it in, and on a one-off basis, there may be instances where the commission could require two clinical trials to support claims without running afoul of the First Amendment.  The example that the D.C. Circuit provided, not surprisingly, was a case involving claims about the comparative efficacy of other-the-counter pain medicine.  Id. at *22.  With that “particular type of claim about a particular product” and in that context, the fit with governmental objectives was reasonable. The FTC will claim victory, but the principled application of the First Amendment to limit its reach could be a significant setback.  Let’s see if other circuits follow.