Yes, taken completely out of context that is absolutely crazy.  What they were saying is that given the claims of Diamond Nuts, walnuts would have to be classified as a drug.  If you then look at what Diamond Nuts put in its advertising, you would see that there was no direct research to any of their claims that walnuts provide those health benefits.

I don't have a problem with the letter from the FDA.  A company should not be able to make claims to the health benefit of a product unless it's been tested and proven.  You don't go around saying fish oil, which contains Omega 3 Fatty Acids, help prevented breast cancer in a Japanese study and then try to suggest walnuts will help preven breast cancer because they contain Omega 3 Fatty Acids.  It's a HUGE jump to assume that Omega 3 Fatty Acids were the reason the people in the study didn't get breast cancer.  Likewise, there's no context as to how much O3FAs were received from fish oil or from walnuts.   

all i saw was diamond say that walnuts have omega 3 fatty acids, which are good for you, and listed the benifits of omega fatty acids. I see this type of stuff on many labels. what was different for it in the wal nuts? Are omega 3 fatty acids not that what htey are made out to be or am i just reading the letter wrong? To me its like saying orange huice has vitamin c which s good for. whats the difference here?