WASHINGTON – The politically well-connected California billionaires who built POM Wonderful into a pomegranate juice powerhouse have lost their latest challenge to federal regulators, but the fight isn't over yet.
In another turn to a long-running dispute over health claims and aggressive salesmanship, a Washington-based federal judge dismissed POM Wonderful's assertions that the Federal Trade Commission went too far in restraining advertising. In quietly dismissing the case Sunday, U.S. District Judge Richard W. Roberts suggested the Los Angeles-based fruit juice company was simply trying to beat regulators to the punch.
"POM's conduct leaves the disfavored appearance that POM hastily filed the instant case, in part, to secure tactical advantage," Roberts said.
POM sued two years ago after the commission went after other companies for allegedly deceptive health claims. It argued that the regulators were encroaching on free-speech rights and the Food and Drug Administration's authority, and that other companies like itself were at risk.
Two weeks later, the commission filed its complaint against POM, contending that company officials filed their lawsuit because they knew regulators were about to crack down.
At issues were ads for POM that made claims like: "SUPER HEALTH POWERS! Backed by $25 million in medical research. Proven to fight for cardiovascular, prostate and erectile health." The larger dispute, though, lives on, as POM Wonderful is still trying to convince the trade commission that it should reverse course and accept the company's advertising.
Through their company, Roll Global, Stewart and Lynda Resnick of Beverly Hills have become major agribusiness players in California's San Joaquin Valley, as well as major contributors to political candidates. Their holdings include Paramount Citrus, which describes itself as the "largest integrated grower, shipper and packer of fresh citrus" in the United States, and Paramount Farms, which says it "grows, processes and packages more pistachios than any company in the world." Forbes magazine estimated the Resnicks' net worth at $2.2 billion.
Using health research, canny marketing and pomegranates grown in the San Joaquin Valley, the Resnicks made POM Wonderful famous as well. In a 345-page decision in May, an administrative law judge acknowledged the existence of pomegranate-related health studies but upheld most of the trade commission's complaints about the juice maker's claims.
Citing its "First Amendment rights to communicate the promising results of our extensive scientific research program on pomegranates," company officials are challenging the trade commission. A formal appeal of the May decision led to a flurry of written briefs and oral arguments on Aug. 23. No ruling has yet been issued.