Supreme Court Unanimously Reverses Ninth Circuit’s Decision In 'POM Wonderful v. Coca-Cola'

Author:Mr Peter Brody, Paul D. Rubin and Joshua Oyster
Profession:Ropes & Gray LLP
 
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Ruling That Competitors May Bring Lanham Act Claims Challenging FDA-Regulated Food and Beverage Labels Could Impact Other Categories of FDA-Regulated Products

On June 12, 2014, the Supreme Court in POM Wonderful LLC v. Coca-Cola Co., No. 12-761, ruled that a competitor may bring a Lanham Act false advertising claim challenging food and beverage labels regulated by the Food and Drug Administration ("FDA") pursuant to the Federal Food, Drug, and Cosmetic Act ("FDCA"). Writing for a unanimous Court, Justice Kennedy concluded that POM's Lanham Act claims were not "precluded" by the FDCA.

Facts of the Case

POM alleged that the name and overall labeling of competitor Coca Cola's juice blend was false or misleading under the Lanham Act, a federal statute that provides a private right of action to challenge a competitor's false advertising. Coca-Cola's juice, sold under the Minute Maid brand, is labeled as "Pomegranate Blueberry" (with the words "Flavored Blend of 5 Juices" in a smaller font), yet it contains only 0.3% pomegranate juice and 0.2% blueberry juice. Coca-Cola asserted this name and label comply with the applicable FDA regulation addressing the labeling of juice blends. POM contended - despite the applicable FDA regulation - that the name of the juice, and presentation of this name on the product label, misleads and confuses consumers into believing that the product contains primarily pomegranate and blueberry juices. The Ninth Circuit had barred POM's Lanham Act claim in part because of the FDA's "comprehensive regulation" of food and beverage labeling, including the specific regulation addressing juice blends.

The Court's Ruling

In reversing the Ninth Circuit, the Supreme Court observed that although this is not a state preemption case, preemption principles are nonetheless "instructive" for the applicable preclusion analysis. The Court noted that neither the Lanham Act nor the FDCA expressly prohibits or limits Lanham Act claims challenging labels of FDA-regulated products. Because the Lanham Act and the FDCA have coexisted for roughly 70 years, the Court viewed Congress's decision not to adopt any preclusion provision as "powerful evidence" that Congress did not intend the FDCA to be the only means for ensuring proper food and beverage labeling. Moreover, the Court did not view Congress's adoption in 1990 of a provision expressly preempting certain state food and beverage labeling requirements as suggesting an intent to preclude...

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