A Shot of Rejection: Court Affirms TTB’s Ad Denial

Advertising Law

A Washington, D.C., judge poured out an action from a vodka company over its advertising claims in an appeal from the Alcohol and Tobacco Tax and Trade Bureau (TTB).

Bellion Spirits asked the TTB for permission to include a statement on its vodka bottles about a compound called NTX, a proprietary blend of ingredients the company said mitigates alcohol’s damage to DNA. Specifically, Bellion wanted to include the statements “NTX helps protect DNA from alcohol-induced damage” and “NTX reduces alcohol-induced DNA damage.”

The advertiser proposed to include with the claims a disclaimer that would state, “NTX does not protect against all health risks associated with moderate and heavy levels of alcohol consumption, including, but not limited to, motor vehicle accidents, high blood pressure, stroke, cancer, birth defects, psychological problems and alcohol dependency.”

After consulting with the Food and Drug Administration (FDA), the TTB denied Bellion’s petition, as Bellion’s claims were not adequately substantiated and were misleading, according to the decision.

Bellion filed suit in D.C. federal court challenging the TTB decision, arguing that it violated the company’s First Amendment rights as an unconstitutional restriction on commercial speech, as well as a prior restraint. The TTB also exceeded its statutory authority by consulting with the FDA, the company said.

U.S. District Court Judge James E. Boasberg affirmed the TTB decision. The proposed statements could be prohibited outright because they were misleading, the court said, and even if that were not the case, the restrictions passed constitutional scrutiny. Or as the court described it, “[w]hichever way the court tilts the wineglass, Bellion’s vintage is wanting.”

While Bellion pointed to 112 studies it provided to the TTB to support its claims, 106 of those were eliminated from consideration due to credibility defects (such as being conducted on animals or in vitro, or addressing only a component of NTX and not the entire compound). As for the remaining studies, the FDA and TTB found flaws that left them unable to substantiate Bellion’s claims.

“In addition, TTB found the proposed claims misleading to the extent they make an implicit claim that NTX infusion will benefit brain and liver health,” Judge Boasberg wrote, with the implicit claims similarly unsubstantiated.

The court also found the TTB was well within its authority to involve the FDA in its decision making, particularly as it merely consulted with the agency and did not concede its jurisdiction entirely.

Holding that the TTB had a basis to reasonably conclude that Bellion’s claims were not credible, the court affirmed the decision. However, in “an abundance of caution,” the court also conducted a constitutional analysis and again rejected the advertiser’s arguments.

The TTB’s decision advanced governmental interests on two fronts, the court said: It prevented consumer fraud by prohibiting misleading ad claims, and it promoted health.

“[I]f consumers come to think that a certain alcoholic beverage has health benefits, they may consume more without regard to the risk,” Judge Boasberg explained. “For the same reason, preventing Bellion from labeling and advertising its product to promote its biological benefits is directly connected to the government’s interest in promoting health, even where consumers will undoubtedly continue to consume alcohol.”

Finally, Bellion argued that the government could have taken a less restrictive course of action by crafting a disclaimer that would have permitted the claims to appear on the vodka bottles. But the TTB was not required to generate and systematically review any possible disclaimer, the court said; instead, “there need only be a reasonable fit between the government’s interest and its regulation.”

To read the opinion in Bellion Spirits v. United States, click here.

Why it matters: In a 48-page “spiked” opinion, U.S. District Judge James E. Boasberg said the TTB was well within its rights to prevent Bellion from making the contested claims on its bottles of liquor. Not only did the court uphold the TTB’s decision that the advertising was misleading and unsubstantiated, it found the prohibition on the ad claims passed constitutional scrutiny. The TTB’s regulations enumerate the substantive criteria for approval of health claims and also explain that it may consult with the FDA, and therefore TTB’s framework both provides adequate warning as to how applications will be treated by the agency—regarding both substantive criteria and process—and conforms to a standard sufficiently objective to vitiate any concern about arbitrary enforcement.