Supreme Court Opens Door To Food And Beverage Label Challenges Under Lanham Act

The United States Supreme Court paved the way today for competitors to challenge FDA-regulated food and beverage labels under the Lanham Act. The Court's opinion in POM Wonderful LLC v. The Coca-Cola Co. is the latest chapter in a long-running feud between POM Wonderful and Coca-Cola, which arose in 2008 when POM accused Coke of mislabeling one of its fruit juice blend products by prominently displaying the words "pomegranate blueberry" despite the product consisting mostly of less expensive apple and grape juices. To date, Coke had successfully persuaded a California district court and the Ninth Circuit that POM's Lanham Act claims were precluded by the Federal Food, Drug, and Cosmetic Act and attendant FDA regulations specifically addressing the labeling of fruit juice blends.

However, Justice Kennedy, writing for a unanimous Supreme Court, rejected this reasoning and instead held that Congress intended the Lanham Act and the FDCA to "complement each other with respect to food and beverage labeling." The Court began by noting that neither the FDCA nor the Lanham Act expressly prohibits Lanham Act claims challenging FDA-regulated labels, despite the fact that both statutes have co-existed for 70 years and undergone numerous amendments. The Court was especially persuaded by the fact that the FDCA expressly preempts some state law claims but remains silent regarding the preclusion of federal causes of action. Additionally, the Court determined that the Lanham Act and FDCA complement one another because the former statute protects commercial interests against unfair competition, while the latter protects public health and safety. As the Court explained, the FDA "does not have the same perspective or expertise in assessing market dynamics that day-to-day competitors possess." The Court also rejected the notion that preclusion of Lanham Act claims was necessary to achieve Congress's goal of "national uniformity in food and beverage labeling." Although the Court acknowledged that...

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