On June 12, 2014, the US Supreme Court ruled unanimously in
favor of WilmerHale client POM Wonderful LLC (POM) in an important
case involving the intersection of the Lanham Act's prohibition
on false advertising and the Federal Food, Drug, and Cosmetic
Act's (FDCA) regulation of food and beverage labeling.
The case, POM Wonderful LLC v. The Coca-Cola Company,
presented the question whether a private party such as POM may
bring a false advertising claim under the Lanham Act to challenge a
competitor's misleading food or beverage label that is also
regulated under the FDCA. Ruling in POM's favor, the Supreme
Court held that "[t]here is no statutory text or established
interpretive principle to support the contention that the FDCA
precludes Lanham Act suits like the one brought by POM in this
case."
At issue in the case was Coca-Cola's Minute Maid Division's
naming and labeling of its "Pomegranate Blueberry" juice
product. Despite its name, Coca-Cola's "Pomegranate
Blueberry" juice contains only trivial amounts of pomegranate
(0.3%) and blueberry juice (0.2%). Apple and grape juice account
for more than 99% of the product. POM, which also makes and sells
pomegranate juice products, sued Coca-Cola under the Lanham Act,
alleging that it had lost sales because Coca-Cola's naming,
labeling, marketing, and advertising misled consumers to believe
that Coca-Cola's product consists primarily of pomegranate and
blueberry juices.
In a unanimous opinion authored by Justice Kennedy, the Supreme
Court agreed with POM that neither the FDCA nor the Food and Drug
Administration's (FDA) regulations preclude Lanham Act claims.
The Court reasoned that "[n]othing in the text, history, or
structure of the FDCA or the Lanham Act shows the congressional
purpose or design to forbid [Lanham Act] suits" and that, in
fact, "the FDCA and the Lanham Act complement each other in
the federal regulation of misleading food and beverage
labels." In reaching this conclusion, the Court rejected
Coca-Cola's contention that, in enacting and amending the FDCA,
Congress intended to displace the Lanham Act's private remedies
in the name of "national uniformity." The Court also
rejected the government's intermediate position, which would
have precluded POM's Lanham Act claims to the extent the FDCA
or FDA regulations "specifically" authorize the
challenged aspects of a label.
POM's victory in the Supreme Court overturns decisions by the
Ninth Circuit and district court finding that POM's challenge
was precluded by the FDCA and FDA's regulations. POM's
victory ensures that the Lanham Act remains available to protect
the commercial interests and goodwill of participants in the food
industry against unfair competition.
WilmerHale Partner Seth Waxman argued the case in the Supreme Court on April 21, 2014. Others involved in the case at the Supreme Court include Partners Brian Boynton and Felicia Ellsworth, Counsel Francesco Valentini, and Senior Associate Rachel Murphy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
