Wednesday, June 30, 2010

Pomegranate Turf Wars Implicate FDA Regulatory Scheme

Ah, pomegranates. In ancient times, the Greeks believed pomegranates were responsible for the seasons. Demeter’s daughter Persephone couldn't resist the urge to eat a few pomegranate seeds while visiting the Underworld, condemning her to marry Hades and spend six months in hell. During those months, Demeter was so upset that she ignored the harvest. Hence, fall and winter.

In modern times, some researchers believe that pomegranates may unlock the secret to better health. It turns out that pomegranates are high in antioxidants, which may have cardiovascular benefits. Team up pomegranate juice with other juices like blueberry, and you have a potent cocktail of health claims.

This has been an emerging area of focus, both in grocery stores and with the FDA. It turns out that the world of juices is both highly competitive and increasingly the target of FDA scrutiny. In February of this year, the FDA issued a warning letter to POM Wonderful, LLC (one guess what they make). The FDA took the position that POM, by making health claims in its label and advertising, converted its 100% pomegranate juice into an unapproved new drug. Just to be clear, we think this is bogus paternalism – we don’t think pomegranate juice is a drug. Meanwhile, POM faced simultaneous pressure from a competitive source – Coca-Cola, who manufactures an enhanced (juiced up?) blend of juices with the catchy title, “Minute Maid ® Enhanced Pomegranate Blueberry Flavored 100% Juice Blend.” Coca-Cola marketed this blended juice as containing a host of benefits that contribute to brain development.

So what did POM do when faced with this competitive challenge from Big Juice? It sued, of course (POM also sued Welch’s, Ocean Spray, and Tropicana on similar grounds). And recently, a federal court in California, having examined POM’s claims, split the baby and let some claims proceed while tossing other core claims. See POM Wonderful LLC v. The Coca Cola Company, 2010 U.S. Dist. LEXIS 55400 (C.D. Cal. May 5, 2010). Importantly, POM did not contest the scientific accuracy of the claims made by Coca-Cola. Id. at *5. Rather, POM was annoyed because the blended juice contained predominantly apple and grape juice – standby, sweet juices that we all remember and love from our childhood – but marketed the pomegranate and blueberry aspects of the blend. In fact, POM alleged that the blended juice contained only 0.3% pomegranate juice and 0.2% blueberry juice. Id. at *14. This, POM claimed, was deceptive to consumers (and, incidentally, competitively harmful to POM), so POM sued under the Lanham Act and a collection of California consumer/unfair trade statutes.

POM came out swinging, alleging that the blended juice bottle prominently featured pictures and language intended to highlight the pomegranate and blueberry ingredients, that the print, television, and website advertising was all similarly misleading, and that Coca-Cola had in fact received a number of vitriolic complaints about the blended juice (the quoted consumer complaint threw out words like “fraud” and “scumbags,” and called the blended juice a “crock,” just to give you a flavor). Id. at *4-16. POM also had a consumer survey conducted by a consumer research/behavioral opinion consultant. Id. at *18.

The court easily dispatched of the state law claims, because POM lacked standing under California’s Unfair Competition Law (§ 17200) and False Advertising Law (§ 17500). Id. at *55. POM clearly wasn’t entitled to any restitution, and a lost business opportunity is only contingent; that’s not enough to confer standing under the UCL and FAL. Id. at *56-58.

The Lanham Act claim, however, was a little trickier. POM was required to show “that Coca-Cola made false or misleading advertisements, and that Coca-Cola’s advertisements deceived a substantial segment of its audience.” Id. at *28 n.13. When considering the Lanham Act claim, however, the court had to be mindful of the FDA’s prior and ongoing regulation in this area pursuant to the Food, Drug, and Cosmetic Act (FDCA). For years, the FDA has been all over health claims in the juice market, as evidenced by the Warning Letter the FDA sent POM in February. And, as you might imagine, the FDA has for years controlled numerous aspects of juice labeling, advertising, and even the pictures of fruit on the bottle (known as “vignettes”). We know, shocking that the FDA would be such a paternalistic control freak. So, for example, the FDA controls when you must call juice a “pomegranate flavored juice drink,” as opposed to “pomegranate juice,” what it means to be a “juice blend,” whether you are allowed to highlight aspects of the blend that are not the major ingredients, and whether you need to put pictures of all included fruits in the “fruit vignette,” or whether you can instead highlight certain fruits. Id. at *34-44. Now Coca-Cola’s catchy name – “Minute Maid ® Enhanced Pomegranate Blueberry Flavored 100% Juice Blend” – makes a bit more sense.

Given that the court wasn’t starting from scratch, it had to determine what, if anything, to make of the prior FDA activity in this area. Citing to a number of pharma cases (as well as a bunch of juice cases), the court fashioned a few rules of thumb:

1) “Lanham Act claims are barred where private litigants ask the court to determine preemptively how the FDA will interpret and enforce its own regulations.” Id. at *44. In other words, don't tread on the FDA’s turf.

2) At the same time, Lanham Act claims are appropriate where: (a) the defendant misrepresents that it complied with FDA regulations; or (b) the court needs only to verify whether the defendant’s conduct conforms to FDA requirements. Id. at *45.

So to recap: if you need to interpret FDA rules and regs to determine whether something’s misleading, no go on the Lanham Act claim. If, on the other hand, the falsity of the statement is ”easily verifiable,” “without requiring the truth of the fact to be determined by the FDA, “ the claim does not implicate the FDCA or FDA regulations. Id. at *48. Got it? Yeah, seems pretty fuzzy to us too.

The POM court ultimately decided it could consider POM’s Lanham Act claim, as long as the court construed it a particular way. Thus, for example, the court found that the name of the juice blend was OK, because the FDA “has concluded that manufacturers of multiple-juice beverages may identify their beverages with a non-primary characteristic, as Coca-Cola has done here.” Id. at *64. On the other hand, it was inappropriate for the court to consider POM’s complaints about the positioning and prominence of certain information in the label, because it “would necessarily be for the FDA to determine” in the first instance. Id. And, to the extent POM criticized FDA-compliant labeling as “false and misleading,” it was inappropriate for the court to “second-guess the considered judgments of the FDA.” Id. at *65.

In the end, the court dumped the vast majority of POM’s claims, finding Coca-Cola’s labeling, naming, and “fruit vignettes” complied with FDA requirements, but when it came time to sound the death knell on POM’s related claims of misleading advertising and marketing, the court hesitated. First, the court got off to a good start, heavily criticizing the methodology of POM’s survey evidence, which was being offered to establish the “consumer confusion” element. The court went so far as to deem the survey evidence “seemingly unreliable” because it “does not appear to relate to Coca-Cola’s advertising and marketing, and only implicates the naming and labeling of the Juice bottle.” Id. at *75-76. So why not toss the claim? There’s a huge fit issue lurking here. But for whatever reason, the court got cold feet and refused to address these Daubert issues, instead ruling that those issues are “best considered at trial.” Id. at *76. That's not the type of rigorous gatekeeping we need.

Second, the court addressed POM’s contention that Coca-Cola engaged in “willful deception,” which would shift the burden to Coca-Cola to demonstrate that consumers were not misled. Coca-Cola poked gaping holes in the “willful deception” evidence presented by POM, and the court agreed: “Coca-Cola’s claims are seemingly meritorious.” Id. at *77. So what happened? Why did the court let the claims survive? Because the court apparently believed that “POM should have the opportunity to demonstrate otherwise.” Id. So the court issued an opinion killing most of the case, expressed grave doubts about the remainder, but ultimately blinked when it came time to toss the whole shooting match.

It took us a long time to get to the end of the opinion, and when we did, it took us an even longer time to get our minds around the abrupt about-face of the court. And it made us think of how often we face similar issues in drug and device cases – shaky “experts” who are somehow allowed to survive because the court believes you have to let it all play out at trial, and plaintiffs who are permitted to use the specter of "intentional fraud" and "deception" to imbue the case with a maleficent odor and thus somehow avoid stricter judicial scrutiny. We keep hoping that more rigorous Daubert and TwIqbal practice will tip the scales back a bit, and it’s getting better out there, but decisions like this are a reminder that there’s still work to be done.

2 comments:

Anonymous said...

Just FYI -- POM was sued today in Federal Court (ND Ohio) by plaintiffs seeking certification of a class and alleging that POM advertises pomegranate juice and juice products with unsubstantiated claims about the products' ability to prevent disease, prolong life, and provide health and medical benefits not available from other foods or beverages.

Choudhury roy said...

This came after hearing how Johnson & Johnson's McNeil Consumer Healthcare unit committed numerous violations - various pediatric meds, including Children's Tylenol, may have contained too much active ingredient, metal specks or inactive ingredients that failed testing requirements, according to testimony by FDA deputy commish Josh Sharfstein. There were also lengthy and inexplicable delays in reporting and rectifying the problems. Moreover, a contractor was hired to surreptitiously remove Motrin from stores, which amounts to an unannounced recall (see the memo).automateandvalidate