Pearson v. Shalala

Citations: 164 F.3d 650; 334 U.S. App. D.C. 71; 1999 U.S. App. LEXIS 464; 1999 WL 12782Docket: No. 98-5043, 98-5084

Court: Court of Appeals for the D.C. Circuit; January 14, 1999; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

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Dietary supplement marketers must obtain preapproval from the Food and Drug Administration (FDA) before making health claims on product labels, which assert a relationship between the supplement and a disease or health condition. The FDA grants approval only if there is "significant scientific agreement" among qualified experts regarding the claim's support by available evidence. The appellants, including marketers Durk Pearson and Sandy Shaw and two health advocacy organizations, sought FDA authorization for four specific claims linking supplements to reduced disease risk: antioxidant vitamins and cancer, fiber and colorectal cancer, omega-3 fatty acids and coronary heart disease, and folic acid's effectiveness in preventing neural tube defects compared to lower food levels. The regulatory framework defines "dietary supplements" as products intended to supplement the diet, distinct from conventional foods or drugs. If a product is classified as a "new drug," it must undergo a rigorous approval process, and a dietary supplement with an unauthorized health claim is considered "misbranded," making its interstate introduction illegal. The FDA’s authority allows for certain dietary supplements to avoid being classified as drugs if claims are authorized. Approval relies on comprehensive scientific evidence and consensus among experts.

The FDA’s authorization operates under informal rulemaking per the Administrative Procedure Act, specifically 21 C.F.R. 101.70 and 5 U.S.C. 553. Congress mandated this rulemaking approach for regulating health claims on food labels, extending it to dietary supplements, which requires FDA approval for health claims before they can be added to labels. Marketers face this primary regulatory hurdle, while the sale of dietary supplements is mainly regulated only if they contain a "new dietary ingredient" or pose safety risks, as per 21 U.S.C.A. 350b and 342(f).

Before 1984, the FDA viewed health claims on foods as equivalent to drug claims, necessitating new drug approval. However, during the mid-1980s, companies began making health claims without such approval, prompting FDA support in 1987. Concerns arose regarding the lack of clear regulations from the FDA for these claims, leading to the Nutrition Labeling and Education Act of 1990 (NLEA). The NLEA allows health claims to be made without FDA approval if they are backed by "significant scientific agreement." Similar provisions were created for dietary supplements, with the FDA tasked to establish the validity procedures.

The FDA later issued regulations including 21 C.F.R. 101.14 and 101.70, but rejected claims that the "significant scientific agreement" standard violated the First Amendment, arguing that disclaimers would not effectively inform consumers about the nature of the claims. The FDA maintained that its approach aligns with the commercial speech doctrine established in Central Hudson Gas & Electric Corp. v. Public Service Commission.

The agency addressed concerns regarding the vagueness of "significant scientific agreement," asserting that its standard relies on objective factors and that its approval procedures for health claims, including a notice and comment process, limit its discretion. The FDA rejected four specific health claims related to dietary fiber and cancer, antioxidant vitamins and cancer, omega-3 fatty acids and coronary heart disease, and the effectiveness of 0.8 mg of folic acid in reducing neural tube defect risks. The FDA found the evidence for these claims inconclusive and did not define how "significant" was measured. 

Specifically, the dietary fiber-cancer claim was rejected due to insufficient evidence linking any specific fiber to observed effects in studies of fiber-rich foods. Similar reasoning was applied to the antioxidant vitamins-cancer and omega-3 fatty acids-cardiovascular claims. For the folic acid claim, the FDA noted the lack of evidence supporting the superiority of any specific source. The agency declined to consider an alternative proposal to allow the claim with a corrective disclaimer about its inconclusiveness. However, a broader claim linking folate consumption to reduced neural tube defect risk was initially rejected but later approved, with disputes arising over the reasons for the change—appellants attributing it to political pressure while the FDA cited new scientific studies addressing earlier concerns.

Appellants challenged the FDA's actions in district court, raising issues under the Administrative Procedure Act (APA) and constitutional claims, particularly that their First Amendment rights were violated by the FDA's refusal to allow disclaimers. Although the non-constitutional argument has merit, the court prioritized the constitutional claim regarding First Amendment rights, as it highlights the need for the FDA to provide clearer standards than the ambiguous "significant scientific agreement."

Appellants may still make health claims that do not meet the "significant scientific agreement" standard as long as they include proper disclaimers. They argue that the agency’s vague stance violates the Fifth Amendment, but this is linked to their Administrative Procedure Act (APA) challenge and will be addressed later. The FDA evaluates these health claims under the commercial speech doctrine and has explicitly rejected the idea that disclaimers can remedy "misleading" claims for dietary supplements. While the regulations do not outright forbid qualified claims, the FDA has indicated that disclaimers are insufficient and did not consider them in the relevant regulations. 

In response to appellants' constitutional challenge regarding disclaimers, the government presents two arguments: first, claims without "significant scientific agreement" are inherently misleading and thus not protected by the First Amendment; second, even if claims are potentially misleading, the government is not required to consider disclaimers instead of banning them altogether. The government contends that misleading claims could confuse consumers, likening the effect to selling products to hypnotized individuals. This argument is dismissed as nearly frivolous. However, the government’s second argument holds more weight, suggesting that consumers may find it difficult to independently verify health claims and could mistakenly believe that the government has endorsed them.

A three-part test under Central Hudson is required to evaluate government regulation of potentially misleading commercial speech. The first step is to determine whether the government’s interest is substantial, which the FDA supports with concerns about public health and consumer fraud. The Supreme Court has affirmed that the government's interest in ensuring accurate commercial information is significant, as is its role in promoting citizen welfare. 

The more critical evaluations concern whether the regulation directly advances the asserted interest and whether there is a reasonable fit between the government's goals and the means used to achieve them. The document argues that the government's position is weak on both fronts. Notably, the government does not claim that dietary supplements threaten consumer health but rather relies on a "common sense judgment" that banning unapproved health claims benefits consumer health. This view is criticized as an overly simplistic and indirect approach, lacking direct evidence of consumer harm or a sound rationale for discouraging non-verified products.

While it is acknowledged that the government can protect against consumer fraud through regulatory measures, the justification for such measures faces scrutiny regarding their proportionality to the goals. The government’s argument that it is not required to use disclaimers is challenged, suggesting a misinterpretation of the commercial speech doctrine, which favors disclosure over suppression. Overall, doubts are raised about the government's regulatory approach and its implications for free speech, especially regarding non-misleading information.

In Bates v. State Bar of Arizona, the Supreme Court evaluated the justification for prohibiting attorneys from advertising their fees, which the State Bar argued was misleading due to the potential for irrelevant factors to be highlighted over skill. While acknowledging the Bar's concerns, the Court rejected the idea that the public lacks the sophistication to discern advertising limitations, asserting that incomplete information is not inherently misleading and advocating for increased disclosure rather than suppression of advertising. This principle has been reiterated in subsequent cases, emphasizing the preference for disclaimers over outright bans on commercial speech.

The government contends that the Supreme Court's stance is inconsistent, referencing Friedman v. Rogers, where the Court upheld a ban on optometrists using trade names, stating that the First Amendment does not require states to permit misleading commercial speech if additional information could clarify it. However, the Court limited this ruling to the unique context of trade names and clarified that the ban did not restrict informational advertising protected under Bates.

The government’s argument does not align with the established principles in Bates, reaffirmed in later cases such as R.M.J., Shapero, and Peel. Additionally, the FDA's interpretation and the Ninth Circuit's ruling in Association of Nat’l Advertisers v. Lungren, suggesting that the Supreme Court's decision in Fox necessitates a more lenient review of regulations on misleading commercial speech, is disputed. In Fox, the Court clarified that scrutiny does not demand the least restrictive means but requires a reasonable fit between legislative goals and methods, without indicating any departure from the precedents set in Shapero and Bates.

The Court criticized prior cases as excessively restrictive, emphasizing that government policies favoring suppression of information over disclosure often overlook less restrictive alternatives. It noted that the Supreme Court's ruling in 44 Liquormart challenges the Ninth Circuit’s reliance on Posadas, which allowed for legislative discretion in restricting speech. The Court highlighted that the Supreme Court disapproved of Posadas' view that suppression is justified without considering less restrictive options. Although the Court rejected the government's argument against a First Amendment preference for disclosure, it did not resolve whether disclaimers could rectify weaknesses in health claims assessed by the FDA. The FDA determined that three health claims regarding antioxidants, fiber, and omega-3 fatty acids lacked significant scientific consensus, suggesting that disclaimers could clarify the inconclusiveness of existing studies. A fourth claim about folic acid was dismissed by the FDA due to insufficient evidence for superiority, although other credible sources indicated support for the claim. The Court suggested that disclaimers could effectively address the uncertainties associated with these claims, referencing an FTC case that upheld the requirement for disclaimers on unsubstantiated scientific claims.

The government's concern regarding consumer assumptions about the approval of dietary supplement claims by the FDA suggests a potential solution: requiring disclaimers that state "The FDA does not approve this claim." To address the issue of true labels omitting adverse effects, a prominent disclaimer could be included to inform consumers. The government argues that combining health claims with disclaimers would confuse consumers, but its only support is a general assertion that multiple claims would lead to confusion. The FDA must justify restrictions on commercial speech and cannot rely solely on claims of potential misleadingness without substantial evidence. The document references prior cases where the government failed to provide sufficient evidence for its restrictions. It acknowledges the possibility that the FDA could determine certain claims are misleading beyond remedy by disclaimers, especially if overwhelming evidence contradicts the claim. The excerpt also discusses the appellants' assertion that the FDA must clarify the term "significant scientific agreement," arguing that the lack of guidance constitutes a violation of their First and Fifth Amendment rights. While they do not contest the pre-screening concept, they criticize the vagueness of the FDA's standards, although the connection to the First Amendment's prior restraint argument is not clearly established.

Appellants' Fifth Amendment vagueness argument is acknowledged but deemed unnecessary due to their success on an Administrative Procedure Act (APA) claim, which would yield similar relief: invalidation of the FDA’s interpretation of the general standard and a remand for further guidance. The APA mandates that agencies must provide adequate explanations for rejecting proposed health claims, which requires defining "significant scientific agreement" to avoid arbitrary and capricious actions, as outlined in 5 U.S.C. 706(2)(A). Agencies cannot simply deny proposals without a rationale. The FDA’s vague application of "significant scientific agreement" is criticized, paralleling a judicial comment on obscenity; however, unlike the Supreme Court, the FDA is subject to the APA’s requirements. The agency does not need to define terms comprehensively at once but must allow the regulated parties to understand the guiding principles. Therefore, the FDA is instructed to clarify its definition of "significant scientific agreement" upon remand. The court invalidated four specific sub-regulations and the FDA’s interpretation of its general regulation, reversed the district court’s decision, and remanded the case for reconsideration of the appellants’ health claims. Definitions for "label" and "labeling" under the relevant statute are also provided, noting the FDA's stringent stance on health claims for dietary supplements, with only two currently authorized.

The FDA has approved various health claims related to foods, including claims about calcium and osteoporosis, fiber and cancer, fruits and vegetables and cancer, folate and neural tube defects, and soluble fiber and coronary heart disease. Challenges to the general regulation, 21 C.F.R. 101.1.4, have arisen in two circuits. The Tenth Circuit determined that appellants lacked standing due to their failure to identify a specific claim, indicating no concrete injury. The Second Circuit found challenges to the general regulation unripe without a specific proposed health claim but deemed the challenge to the claim-review procedure ripe. It ruled that a 540-day review period was a reasonable mechanism for the FDA to assess the truthfulness of proposed claims. In contrast, the Fox case involved a university's ban on certain sellers to maintain an educational atmosphere, where the Second Circuit reversed a decision for failing to apply the "least restrictive means" test under Central Hudson. The Supreme Court clarified that Central Hudson requires only a "reasonable" fit between means and ends. Unlike drugs, dietary supplements have less stringent scrutiny; however, the government argued that alternative communication channels exist, which is not applicable here. While manufacturers can publish health-related literature, such channels are less effective than direct claims on product labels due to higher consumer search costs. The FDA apparently did not consider disclaimers when evaluating the four specific health claims.

The Supreme Court's statements regarding the direct advancement prong of the Central Hudson test are acknowledged, with the position taken that the government's justification for consumer fraud meets this prong. The argument is supported by precedents set in Ibanez and Edenfield, suggesting that the government's evidentiary burden at the final step of Central Hudson should be equivalent to that at the direct advancement stage. It is noted that the FDA can impose a ban on a claim if the supporting evidence is significantly weaker than the evidence against it, particularly in cases relying on limited or outdated studies. The excerpt contrasts the case of Nutritional Health Alliance, which upheld a well-defined health claim regulation against prior restraint analysis, with Central Hudson, which indicated, in a footnote, that commercial speech might not be as susceptible to traditional prior restraint. There is an acknowledgment of potential differences between Administrative Procedure Act (APA) standards and First or Fifth Amendment analyses, suggesting that while an APA standard may be well-defined, it does not necessarily satisfy constitutional requirements, and that the APA might allow for agency guidance that constitutional amendments may not. These considerations are not the focus of the current discussion and are deferred for future consideration after any potential remand to the agency.