Eighth Circuit Reverses Class Certification, Finding Best Buy Established Lack of Price Impact
Ninth Circuit Affirms Denial of Class Cert in Printer Suit

POM Seeks Supreme Court Review in FTC Ad Dispute

By Michael A. Scodro and Ramon Villalpando

On April 29, 2016, the Supreme Court will consider whether to grant the certiorari petition in POM Wonderful et al v. Federal Trade Commission (15-525), which asks the Court to identify the standard of review applicable to agency decisions that prohibit truthful, yet allegedly misleading, advertising.  The case arises out of an FTC complaint filed against POM claiming, among other things, that certain POM ads misleadingly implied that pomegranate juice was a scientifically-established treatment for disease.  An administrative law judge determined that a subset of the challenged ads contained this implied message, but the full Commission later banned a substantially larger group of ads, concluding that these ads made implied, misleading claims.  On appeal, the D.C. Circuit deferred to the FTC’s determination and upheld the ban, rejecting POM’s argument that—to safeguard POM’s First Amendment rights—the court should have reviewed the Commission’s decision de novo.

In its certiorari petition, POM asks the Supreme Court to decide “[w]hether a finding by the FTC that a truthful advertisement nonetheless implies a misleading message to a minority of consumers, and therefore receives no First Amendment protection, must be reviewed de novo.”  POM contends that, if Commission decisions are subject only to deferential review, then any “agency . . . will have essentially a free hand to ban certain kinds of truthful commercial statements in any industry on the theory that a substantial minority of consumers will misunderstand them, even if the underlying motive is likely political.”  The FTC responded to the petition on March 28, 2016, and POM filed its reply earlier this week.  The case is of substantial importance to advertisers, regulators, and consumers.  The Court’s disposition of the petition will be closely watched.

POM Wonderful et al v. Federal Trade Commission (15-525)