Supreme Court Sides with POM Wonderful in False-Advertising Suit against Coke

June 12, 2014

Does this ruling open opportunities for companies to sue over food labels already compliant with FDA’s Food, Drug and Cosmetic Act?

The Supreme Court today ruled that POM Wonderful can sue Coca-Cola for false advertising over Coke’s Minute Maid Pomegranate Blueberry 100% Fruit Juice Blend. POM Wonderful, which sells its own brand of pomegranate-blueberry juice claims that Coke’s Minute Maid product name and labeling imagery imply that its juice contains a high percentage of pomegranate and blueberry juices, when in fact the juice blend primarily comprises, in the Supreme Court’s words, “less-expensive apple and grape juices.” POM is suing Coke on grounds of the Lanham Act, a federal statute that allows companies to sue others over false or misleading advertising or labeling believed to create unfair competition. Coke, however, maintains that its labeling already complies with FDA’s Food, Drug and Cosmetic Act (FDCA), which allows companies to market juice blends without specifying all of the juices present on the label so long as a company specifies that the juice is present as flavoring. Read more on the case here.

In its defense, Coke argues that POM cannot bring the Lanham Act against a label that is already regulated by the FDCA-an opinion backed by previous rulings in the case by the U.S. District Court and the U.S. Court of Appeals for the Ninth Circuit.

But the Supreme Court today sided with POM Wonderful, and thus, POM can continue in its suit against Coke.

In short, the Court ruled that the FDCA does not preempt private Lanham Act suits because neither statute indicates this. In the Court’s opinion, Justice Anthony Kennedy wrote, “Neither the Lanham Act nor the FDCA, in express terms, forbids or limits Lanham Act claims challenging labels that are regulated by the FDCA” and that “In consequence, food and beverage labels regulated by the FDCA are not, under the terms of either statute, off limits to Lanham Act claims.”

Kennedy wrote that both the Lanham Act and the FDCA can and do coexist and work towards the same purpose (to prevent misleading labeling) and that the two “complement” each other while serving specific purposes-namely, that the Lanham Act specifically protects companies’ commercial interests in cases of unfair competition.

As such, the Court wrote, the FDCA does not necessarily supersede the Lanham Act. “The absence of such a textural provision when the Lanham Act and the FDCA have coexisted for over 70 years is ‘powerful evidence that Congress did not intend FDA oversight to be the exclusive means’ of ensuring proper food and beverage labeling.”

Moreover, it wrote, “A holding that the FDCA precludes Lanham Act claims challenging food and beverage labels also could lead to a result that Congress likely did not intend. Because the FDA does not necessarily pursue enforcement measures regarding all objectionable labels, preclusion of Lanham Act claims could leave commercial interests-and indirectly the public at large-with less effective protection in the food and beverage labeling realm than in other less regulated industries.”

As a result of this Supreme Court ruling, will we now see an uptick in private Lanham Act suits against food and beverage labels already governed by FDA and the FDCA? Does this open up gray area in the area of lawful labeling? Nutritional Outlook will continue to report on this case.

 

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine jennifer.grebow@ubm.com