A Moment of Truth for Truth in Advertising: How Far Can Speech Regulation Go?

You know better than to believe everything companies say in their advertisements, of course. But that doesn't stop ads from influencing your shopping habits, which is why companies spend millions on marketing.

When it comes to claims about the healthfulness of foods and other products, though, the gimmickry reaches levels beyond that of mere marketing: The untrue-but-influential claims made for many products echo the cure-all testimonials of the "patent medicines" that were sold in the pre-Food and Drug Administration days.

Actually, probably only POM Wonderful goes that far, promoting its pomegranate juice as an elixir to ease a whole range of health woes. Most companies merely toutlimited health benefits for their products, or imply the use of natural ingredients not found in them.

The wild and woolly marketplace has several mechanisms to rein in marketing mischief, but no lawsuit can protect consumers like common sense. And lurking in the background of these cases is the right to free speech, which applies to commercial speech, too. Indeed, one case that was recently settled could have marked the beginning of the unraveling of current health claim regulation.

Recent Attempts to Halt Baseless Health Claims

The government has been stepping up its enforcement of health claims recently. For example, on Tuesday, the FDA warned that mouthwash doesn't reduce plaque or promote healthy gums, despite the marketing claims of Johnson & Johnson (JNJ), CVS Caremark (CVS), and Walgreen (WAG). The companies base their claims on the ingredient sodium fluoride, which hasn't been proved to help gums or remove plaque. The FDA said that if the false claims didn't stop within 15 days, it would take more serious enforcement action.

That threat may not have felt too serious, however, as POM Wonderful got a similar warning back in February, but continued to stand by its claims. Not much seemed to happen, but then the Federal Trade Commission stepped in, suing over those claims, which POM Wonderful continues to defend. By taking the case to court, the FTC is bringing more force to bear than the FDA did: If the FTC wins, POM faces a ban on making health claims unless it can back them up to the FDA's over-the-counter drug standards. (See the proposed order at the end of the FTC's POM complaint.)

But government agencies aren't the only enforcers looking to stop spurious marketing. For example, vitaminwater's various health claims have been targeted by the Center for Science in the Public Interest, whose lawsuit against Coke (KO), the maker of vitaminwater, was allowed to proceed in July.

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Normally, judges hedge denials to dismiss with language emphasizing that they aren't making a decision on the merits of the case, but rather on whether the plaintiff's claims are strong enough to allow a trial. In this case, the judge went much further,
appearing to practically decide the case in advance: He ruled that various vitaminwater claims violated FDA regulations, such as the "jelly bean" rule, which prohibits selling junk food as healthy by adding nutrients to it. Vitamin water's third ingredient is sugar, a hefty 33 grams per 20-ounce bottle, about half as much as a similar sized soda.

Consumers are also behind a lawsuit against retailers such as Target (TGT) and Wal-Mart (WMT) for marketing their store-brand organic milk as coming from small dairies with open pastures, when in fact it came from a single large Colorado dairy whose "organic" status is being challenged by the government. That suit got new life recently: The Eighth Circuit Court of Appeals revived the claims about the small dairies and open pastures, though not the claims that the milk shouldn't have been tagged "organic," reports The Huffington Post. Target says it no longer uses the milk from that dairy.

Healthful or Harmful?

While those suits involve products that may not be as healthful as they claim to be, at least the products involved aren't actively harmful. In a lawsuit involving antibacterial soap, plaintiffs are warning that a product touted for its health benefits is actually hazardous: Not only is "anti-bacterial" soap no better at disinfecting than regular soap and water -- despite marketing claims to the contrary -- the main anti-bacterial chemicals in them, Triclosan and Triclocarban, are harmful to humans and the environment, the plaintiffs contend.

At least two such lawsuits are in play at the moment. One, brought by the National Resources Defense Council, is trying to force the FDA to regulate the chemicals after a 32-year delay in rule-writing. As a column on DailyFinance's sister site, WalletPop notes, the antibacterial soap market is a billion-dollar industry, despite the government's repeated findings that the chemicals offer no advantages.

The second suit involving similar claims targets Dial over its antibacterial soap, as reported by StLouisToday.com That suit seeks an injunction against Dial's claims that its antibacterial soaps are better, and a refund of all the extra money Dial was able to charge to consumers based on the claims it made for its antibacterial products, among other things.

The Nexus of Free Speech and Misleading Health Claims

Commercial speech didn't always have free speech protection; In the 1970s, however, that changed. In the seminal case Central Hudson Gas & Electric v. Public Service Commission, the Supreme Court outlined what forms of commercial speech could be regulated or prohibited by government. One category is "misleading" speech: Assuming the speech isn't misleading, analysis then turns to whether or not the regulation is justified and sufficiently narrow.

One context where the ability to regulate commercial speech has been litigated involves prescription drugs. The FDA prohibits companies from marketing drugs "off-label" for uses for which they haven't been approved. In sending warning letters, the FDA calls off-label promotion "misleading." However, that characterization has been rejected by a district court, and in fact, the FDA's ability to regulate off-label promotion isn't clear. The activity usually banned by the rules is telling doctors (and consumers) about research that suggests a benefit from the drug, but is insufficient to prove it works and is safe for that use: for example, a small clinical study or a case study. Assuming the limited data is truthful (not always a good assumption), why is the communication banned?

Pharmaceutical company Allergan, which recently settled off-label promotion claims with the Department of Justice, had sued to overturn the off-label regulations, but dropped its suit during the settlement. If Allergan's case had been decided, it's possible off-label promotion would have become legal. And though the Allergan case has been dropped, the issue will remain until a future suit settles the question.

A Moment of Truth for Truth in Advertising

While the two contexts -- health claims about ordinary consumer products and benefit claims for prescription drugs -- are different, eliminating the FDA's ability to ban off-label promotion of drugs would be an ominous sign for the ability to limit consumer product health claims. For example, POM Wonderful claims to have lots of clinical research supporting its claims. If POM successfully argues it is not promoting a drug, just a juice, despite its myriad claims that the juice helps to treat or prevent diseases, what would the FTC have to do before taking action to prohibit the speech, as its proposed order currently would? (I'm assuming the POM studies are insufficient to prove its claims under current standards.)

Similarly, would diet product testimonials, as long as they are true, still have to offer the disclaimer "results not typical" to avoid being misleading? Underlying the idea of prohibiting the use of a limited clinical trial or a small case study to promote an off-label use is in part the fact that the positive result may not be typical, and indeed, may not apply to anyone else.

Those and related questions wouldn't have been settled by the Allergan case, even if the pharmaceutical company had won, but an Allergan win would have opened the door to all sorts of challenges based on the idea that banning true speech is unconstitutional. So if some other company takes up the cause, and wins, expect lots more litigation.

Bottom line: If the product doesn't come with a prescription, or if the multi-page fine print document that comes with it doesn't specifically say it works and is safe in the way its ads claim, don't believe the ads. But you probably don't think you believe ads anyway. And yet all that marketing still works.