The Federal Trade Commission announced today that it has unanimously approved a settlement with a former POM Wonderful executive that will require him to cooperate in the ongoing deceptive advertising case against the juice maker.
As part of the settlement, Mark Dreher, who served as vice president of science and regulatory affairs at POM from August 2005 to May 2009, is barred from making any disease treatment or prevention claim in advertisements for POM’s products.
After the FTC’s investigation was first reported by The National Law Journal, the agency publicly confirmed the probe on Sept. 27. The FTC’s case alleges that POM violated federal law by making deceptive disease prevention and treatment claims.
The FTC complaint names as defendants POM Wonderful and its parent company, Roll International Corp. It also names Stewart Resnick, chairman of POM; Lynda Resnick, co-director of Roll; and Matthew Tupper, president and chief operating officer of POM.
At issue in the complaint are POM’s advertisements that showed the company’s signature bulb-shaped bottle making such health claims as, “Drink to prostate health,” “I’m off to save prostates,” and that the millions the company has spent on medical research has found that the company’s pomegranate juice offers “improved heart and prostate health and better erectile function.”
The complaint says that in fact, clinical studies, research and trials do not prove that drinking POM juice or taking the company’s pills and extract treats heart disease, prostate cancer or erectile function. POM Wonderful pomegranate juice is sold at grocery stores nationwide, and a 16 oz. bottle retails for approximately $3.99. The company’s POMx pills and liquid extract are sold via direct mail, with a one-month supply costing approximately $30.
The FTC has scheduled a hearing before an administrative law judge for May 24, 2011, during which POM will have the right to show cause as to why it should not be ordered to cease and desist from making the allegedly false health claims.
Dreher’s proposed settlement agreement was announced as the agency disclosed the administrative complaint against POM. Under the agency’s administrative procedures, the settlement must be open to public comment for 30 days. Janet Evans, a senior attorney in the FTC's Division of Advertising Practices handling the POM case, said that the agency did not receive any comments on the Dreher settlement.
Dreher’s settlement did not require him to pay any financial penalties, Evans said. Dreher, who is now president of Nutrition Science Solutions, was represented by William Hannay, an antitrust partner in Schiff Hardin’s Chicago office.