SANTA MONICA, CA – Advertisers’ free speech rights were recently vindicated in a major decision by the Federal Court Of Appeals sitting in Washington, D.C. The court reversed a split decision made by the Federal Trade Commission (FTC) which required food and beverage manufacturer POM Wonderful to have not one but two randomized controlled human trials (RCTs) for claims that its products help prevent, treat, or cure disease. William Rothbard, an expert in unfair competition and deceptive advertising, explains on his blog why the recent development is a significant victory for the Republican minority on the FTC, as well as for the dietary supplements industry.
In his article, Rothbard explains how the DC Court Of Appeals decided that requiring two RCTs was excessive and unjustified because it could suppress useful information for consumers, in violation of advertisers’ 1st Amendment rights to engage in truthful commercial speech for a lawful product. The court indicated that a more general, flexible standard of “competent and reliable scientific evidence,” limited to no more than one RCT, should be applied, and that an effective disclaimer to indicate a claim’s limitations or inconclusive nature would suffice, where needed. [source: http://www.cadc.uscourts.gov/internet/opinions.nsf/CF44C4FA22F615C585257DDD00549353/$file/13-1060-1535012.pdf]
William Rothbard, a former attorney with the FTC who has decades of experience in the ad law field, discusses elsewhere on his blog [source: http://www.ftcadlaw.com/ftc-commissioners-fight-over-free-speech-and-dr-oz-as-cout-settles-rct-debate/] that commercial speech was also in the spotlight recently in a separate FTC case against Genesis Today Inc. that involved statements made on the Dr. Oz Show. [source: http://dockets.justia.com/docket/texas/txwdce/1:2015cv00062/732880] The Democratic majority on the FTC felt that allegedly deceptive statements on Dr. Oz made by defendant Lindsay Duncan about the weight loss benefits of green coffee bean constituted commercial advertising subject to governmental regulation even though Duncan did not mention a specific product or offer. The dissenting Republican minority strongly disagreed, feeling Duncan’s appearance on a talk show was non-commercial in nature and thus fully protected by the 1st Amendment even if what he said was not factually correct.
Rothbard discusses how the two sides on the FTC applied their accepted criteria for defining commercial speech in reaching their different conclusions. The majority argued that despite not mentioning a specific product or price, Duncan’s appearance on Dr. Oz was commercial because he had an economic motivation for appearing and in effect was promoting his green coffee brand by discussing specific attributes of green coffee as a weight loss aid. Using the same factors, the minority argued the appearance was not commercial because Duncan did not mention his product or price or propose a commercial transaction. The Republican commissioners warned that the majority’s interpretation of commercial speech in this context was so broad that it would discourage nutraceutical industry representatives’ from engaging in public discussion of important health issues even in non-commercial venues such as talk shows.
Rothbard noted that while Dr. Oz also effusively endorsed the weight loss benefits of green coffee bean, which gave a tremendous boost to the industry generally and Duncan’s product specifically, as the host, and without any financial ties to the defendants, his speech was fully protected under the 1st Amendment.
Siding with the FTC minority, Rothbard expresses the hope that the agency’s obsession with the “Dr. Oz effect” is passing and that the “Duncan Affair” is a one-off. He calls on the FTC’s “propensity for regulatory overreach [to be] tempered by the D.C. Circuit’s ’slap on the wrist’ in POM Wonderful, not only on excessive substantiation demands but on an over-expansive, speech-chilling definition of commercial advertising.”
William Rothbard has been a business litigator and advertising law specialist for more than 30 years. He has widespread experience counseling advertisers and representing them in state and federal unfair competition and deceptive advertising proceedings. Prior to entering private practice he was an advertising enforcement attorney with the Federal Trade Commission and an attorney adviser to the FTC Chairman. A graduate of the University of Michigan and the University of California Hastings College of Law, he also served as Senior Counsel to the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Monopoly, and Business Rights. For more information, visit: http://williamrothbardnews.com/