02 07 2012 UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION In the Matter of ) ) POM WONDERFUL LLC and ) ROLL GLOBAL, as successor in interest ) to Roll International companies, and ) Docket No. 9344 ) P UBLIC ) STEWART A. RESNICK, ) LYNDA RAE RESNICK, and ) MATTHEW TUPPER, individually and ) as officers of the companies. ) ) RESPONDENTS’ REPLY TO COMPLAINT COUNSEL’S POST-TRIAL BRIEF Kristina M. Diaz, Esq. Alicia Mew, Esq. Johnny Traboulsi, Esq. Brooke Hammond, Esq. Roll Law Group P.C. 11444 West Olympic Blvd., 10th Floor Los Angeles, CA, 90064 Tel: 310.966.8400 Fax: 310.966.8810 Email: [email protected] John Graubert, Esq. Bertram Fields, Esq. Skye Perryman, Esq. Greenberg Glusker Fields Covington & Burling LLP Claman & Machtinger, LLP 1201 Pennsylvania Avenue, NW 1900 Avenue of the Stars, Suite 2100 Washington, DC 20004 Los Angeles, CA 90067 Tel: 202.662.6000 Tel: 310.553.3610 Fax: 202.662.6291 Fax: 310.553.0687 Email: [email protected] Email: [email protected] {060188.3} RECORD REFERENCES References to the record are made using the following citation forms and abbreviations: Appendix of Advertisements – Respondents’ Appendix of Advertisements (submitted with initial Post Trial Brief) Reply Ad Appendix – Respondents’ Reply Appendix of Advertisements CX – Complaint Counsel exhibit PX – Respondents exhibit RPTB – Respondents’ Post Trial Brief RFF – Respondents’ Proposed Findings of Fact RCL – Respondents’ Proposed Conclusions of Law RRFF – Respondents’ Reply Findings of Fact CCPTB – Complaint Counsel’s Post Trial Brief RRCL – Respondents’ Reply Conclusions of Law Tr. – Trial testimony (CX0000 at 000 (XX, Dep. at xx)) – Citations to deposition testimony from this litigation (CX0000 at 000 (XX, Dep. at xx), in camera) – Citations to in camera deposition testimony from this litigation (CX0000 at 000 (XX, OS Dep. at xx)) – Citations to Deposition Testimony from POM Wonderful LLC v. Ocean Spray Cranberries, Inc., No. CV-09-00565 DDP (RZx) (C.D. Cal.) (CX0000 at 000 (XX, TCCC Dep. at xx)) – Citations to Deposition Testimony from POM Wonderful LLC v. The Coca-Cola Co., No. CV-08-06237 SJO (FMOx) (C.D. Cal.) (CX0000 at 000 (XX, Trop. Dep. at xx)) – Citations to Deposition Testimony from POM Wonderful LLC v. Tropicana Prods., Inc., No. CV-09-00566 DSF (CTx) (C.D. Cal.) (CX0000 at 000 (XX, Welch Dep. at xx)) – Citations to Deposition Testimony from POM Wonderful LLC v. Welch Foods, Inc., No. CV-09-00567 AHM (AGRx) (C.D. Cal.) Joint Stipulations of Law and Fact, JX0001 (or JX0003) ¶ - Citation to Joint Stipulations of Fact and Law CCFF – Complaint Counsel’s Proposed Findings of Fact CCCL – Complaint Counsel’s Proposed Conclusions of Law {060188.3} TABLE OF CONTENTS I. INTRODUCTION AND STATEMENT OF FACTS ........................................................ 1 II. POM’S ADVERTISING IS NOT DECEPTIVE AND DOES NOT VIOLATE SECTIONS 5 AND 12 OF THE FTCA .............................................................................. 5 A. Complaint Counsel’s Facial Analysis of the Challenged Ads Is Defective and Fails to Demonstrate that the Challenged Ads Convey the Establishment and Efficacy Claims Complaint Counsel Assign to Them .............. 5 1. The Challenged Establishment Advertisements, Viewed as a Whole, Do Not Clearly and Conspicuously Convey the Broad “Clinically Proven” Claims Complaint Counsel Seeks to Attach to Them ........................................................................................................... 8 2. The Challenged Efficacy Advertisements, Viewed as a Whole, Do Not Clearly and Conspicuously Convey Efficacy Disease Claims to a Reasonable Consumer........................................................................ 29 B. Complaint Counsel Failed to Present Any Reliable Extrinsic Evidence to Establish the Claims They Attribute to the Challenged Advertisements .............. 34 C. Respondents Did Not Intend to Convey Establishment and Efficacy Claims That the Challenged Products Treat, Prevent or Reduce the Risk of Heart Disease, Prostate Cancer, and Erectile Dysfunction ................................... 43 1. Inclusion of Studies and Health Claims in POM’s Ads Does Not Show Respondents Intended to Convey the Claims That the Products Treat, Prevent or Reduce the Risk of Disease ............................ 43 2. Citation to Money Spent on Research in POM’s Ads Does Not Show Respondents Intended to Convey the Claims That the Products Treat, Prevent or Reduce the Risk of Disease ............................ 48 3. POM’s Focus on Health Conscious Buyers Does Not Prove Respondents Intended to Convey the Claims that the Products Treat, Prevent or Reduce the Risk of Disease........................................... 48 a. The Medium in Which POM Advertised Does Not Show Respondents’ Intent to Convey the Challenged Claims ............... 49 b. POM’s Creative Briefs Are Irrelevant to Show Respondents’ Intent to Convey the Challenged Claims ............... 51 D. The Challenged Claims Are Not Material To Consumers’ Decisions to Purchase POM Juice ............................................................................................. 53 1. Respondents Rebutted Any Initial Presumption of Materiality Because the Reibstein Survey Unequivocally Demonstrates that the Challenged Claims Are Not Material Because Consumers Purchase POM Juice For Non-Disease Related Reasons ......................... 55 {060188.3} i 2. The Non-Expert Consumer Research Relied Upon By Complaint Counsel Do Not Show That the Challenged Claims Are Material ........... 59 a. The A&U Study is Methodologically Flawed and Sheds No Light on the Materiality of the Challenged Claims ...................... 59 b. The Zoomerang Survey is Methodologically Flawed and Sheds No Light on the Materiality of the Challenged Claims ........................................................................................... 63 3. Dr. Reibstein Never Testified That the Challenged Claims Would Motivate Consumers to Buy the Challenged Products ............................. 64 4. Materiality of the Challenged Claims Cannot be Inferred From the Notices Respondents Received about Their Science and Advertising................................................................................................ 65 E. Respondents’ Claims Do Not Constitute Broad “Treat,” “Prevent,” or “Reduce the Risk” Establishment Claims That Excuse Complaint Counsel From Meeting Their Burden Under Pfizer And Evaluating POM’s Significant Body Of Research .............................................................................. 69 1. The Proper Standard to Review Respondents’ Claims Is Under Pfizer ......................................................................................................... 73 2. Complaint Counsel’s Proposition That Only RCTs are Sufficient to Substantiate Health Claims Is Baseless Both Legally and Scientifically ............................................................................................. 74 a. There Is No Legal Requirement of RCTs to Substantiate a Safe Whole Food Product and “RCTs” Are Not Required to Show a Causal Relationship Between a Health Benefit and Product. ......................................................................................... 76 b. There Is No Scientific Basis Requiring RCTs to Substantiate a Safe Whole Food Product. ..................................... 82 c. The Challenged Products Are Safe 100% Whole Food Products That Are Not Offered In Place of Conventional Medical Treatment ........................................................................ 88 F. POM’s Heart Health Claims Are True and Substantiated by Competent and Reliable Scientific Evidence .......................................................................... 90 1. The Appropriate Evidentiary and Scientific Standard for Evaluating the Effect of a Fruit or Fruit Juice, Such As Pomegranate Juice (and Its Derivatives), on Cardiovascular Health Is Not RCTs .............................................................................................. 90 2. Respondents Possess Competent and Reliable Evidence to Substantiate the Health Benefit Claims Made Regarding the Challenged Products ................................................................................. 93 ii a. Respondents’ Scientific Research Demonstrates a Benefit in Lowering Blood Pressure.......................................................... 93 b. Respondents’ Scientific Research Demonstrates a Benefit in Reducing Arterial Plaque.......................................................... 94 c. Respondents’ Scientific Research Demonstrates a Benefit in Improving Blood Flow.............................................................. 97 3. Respondents’ Competent and Reliable Scientific Evidence Supports “Treat,” “Prevent,” and “Reduce the Risk of” Claims .............. 99 a. “Reduce the Risk” of Cardiovascular Disease............................ 100 b. “Prevent” Cardiovascular Disease .............................................. 101 c. “Treat” Cardiovascular Disease.................................................. 101 4. Competent and Reliable Scientific Evidence Supports Each of the Challenged Heart Advertisements .......................................................... 102 G. POM’s Erectile Claims Are True and Substantiated by Competent and Reliable Scientific Evidence............................................................................... 115 1. RCTs Are Not Required to Substantiate POM’s Erectile Claims ........... 116 2. Respondents Possess Competent