POM Wonderful Petitions the U.S. Supreme Court in FTC Case

By Riëtte van Laack –

As we previously reported, POM Wonderful (“POM”) petitioned the U.S. Court of Appeals for the D.C. Circuit for en banc review of that Court’s earlier decision which had largely upheld the FTC’s cease and desist order issued against POM.  That petition was denied.  Now, POM has filed a Petition for a Writ of Certiorari to the U.S. Supreme Court to review the D.C. Circuit’s decision.  As in the request for the en banc review, POM asks the Supreme Court to address the question of whether the Court of Appeals should have deferred to the FTC on the question of whether certain speech is not protected by the First Amendment, or alternatively, whether the Court of Appeals should have done a de novo review on that issue.

At issue are seventeen advertisements which, according to POM, the FTC incorrectly determined are misleading.  POM claims that the ads were not misleading because they included qualifying language.  However, the FTC decided that, despite the qualifying language, the ads were misleading to a “significant minority” of consumers; this significant minority allegedly would interpret the ads as unqualified claims that there is conclusive evidence that POM’s products cure or prevent cardiovascular disease and prostate cancer.  POM disputes the FTC determination and argues that the First Amendment entitles POM to de novo review of the FTC’s determination that they do.

POM discusses four reasons for granting the writ:

1. The D.C. Circuit’s determination conflicts with Supreme Court precedent holding that “factual” determinations by lower tribunals that concern the protected character of the speech at issue are reviewed de novo.
2. There is a circuit split on the question presented.
3. The issue is important and precedent setting and the Court should not allow “a major precedent setting . . . speech restriction to go into effect without” review.  According to POM, “if the D.C. Circuit’s grant of enormous deference to the FTC in this case remains in place, the agencies’ settlement leverage will derail most future vehicles before they leave the station.”
4. The POM case is rare because it concerns thirty six different ads viewed differently by the ALJ, the Commission, and indeed dissenting Commissioner Ohlhausen.   According to POM, the case “will allow this Court to demonstrate the importance and application of the standard of review in a concrete setting that will clarify future cases.”

After all the litigation involving these parties involving many issues raised by POM, it is noteworthy that POM is not challenging the entirety of the FTC’s Cease and Desist Order.  Instead, POM acknowledges in its petition to the Supreme Court that even if the Court rules in favor of POM, that ruling would not be outcome determinative in terms of the FTC Order as a whole.  Thus, regardless of what happens at the Supreme Court, POM will be subject to at least a major part of the FTC’s Order.  However, POM asserts that Supreme Court review of which ads are false or misleading is relevant for POM because it will determine the scope of the FTC’s Order.  If the seventeen additional ads are found not false or misleading, as POM claims, POM may continue to use them.  Before the Supreme Court decides whether to hear the case, the FTC will have the opportunity to file its opposition.