High Court Says Federal Food, Drug, And Cosmetic Act No Bar To POM's Lanham Act Claim Against Coca-Cola

In a unanimous decision authored by Justice Kennedy,1 the United States Supreme Court held that competitors can bring Lanham Act claims for misleading food and beverage labels, allowing POM Wonderful LLC's ("POM") false advertising claim against the Coca-Cola Co. ("Coca-Cola"). The decision reverses the Ninth Circuit, rejects the argument that food and beverage labeling claims fall within the exclusive jurisdiction of the FDA, and finds that the Federal Food, Drug, and Cosmetic Act ("FDCA") leaves room—in the context of Lanham Act claims—for private actions that seek to police the truthfulness of label claims. The Court's decision opens the door for competitors to challenge the content of labels outside the bounds of FDA regulations, giving food and beverage companies a reason to scrutinize product labeling even more closely than in the past.

Coca-Cola's "Pomegranate Blueberry" Blend

POM produces, markets, and sells a variety of pomegranate products through its POM Wonderful brand, including a pomegranate-blueberry juice blend. Coca-Cola offers a competing pomegranate-blueberry juice blend under its Minute Maid brand. POM brought a false advertising claim under § 43(a) of the Lanham Act, 15. U.S.C. § 1125, in the Central District of California alleging that Coca-Cola's "pomegranate blueberry" label on a drink with 0.3 percent pomegranate and 0.2 percent blueberry juice is deceptive and misleading to consumers, and causes injury to POM as a competitor in the form of lost sales.

Coca-Cola defended against that claim on the basis that its label complied with the Nutrition Labeling and Education Act of 19902 and implementing regulations, in particular 21 CFR § 102.33, which requires companies to indicate that less-predominant juices are present as a "flavor" or "flavoring." The phrase "flavored blend of 5 juices" appeared in smaller type beneath the "POMEGRANATE BLUEBERRY" label. Coca-Cola argued that the FDA regulates the juice field and that private Lanham Act actions by a competitor should be barred by the FDCA.

Lower Courts: Leave Labeling to the FDA

Both lower courts sided with Coca-Cola. The District Court for the Central District of California granted partial summary judgment to Coca-Cola, holding that naming and labeling particulars were for the FDA rather than the court to decide and that Coca-Cola's juice label comported with federal law and regulations. 727 F. Supp. 2d 849 (2010). The Ninth Circuit similarly held POM's claim barred...