On June 12, 2014, the U.S. Supreme Court issued its much anticipated opinion in Pom Wonderful LLC v. The Coca-Cola Company. Ruling in favor of Pom Wonderful, the unanimous Court reversed the Ninth Circuit’s decision that the Federal Food, Drug, and Cosmetic Act (FDCA) barred private parties from prosecuting Lanham Act claims based on a defendant’s deceptive labeling.
In 2008, Pom Wonderful, which markets a line of pomegranate juice beverages, sued Coca-Cola for false advertising under § 43(a) of the Lanham Act. Pom Wonderful’s complaint accused Coca-Cola of deceptive practices concerning Coca-Cola’s "Pomegranate Blueberry Flavored Blend of 5 Juices." The juice blend, sold under Coca-Cola’s Minute Maid brand, consisted primarily of apple and grape juice, with only 0.3% pomegranate and 0.2% blueberry.
The Ninth Circuit dismissed in part Pom Wonderful’s Lanham Act claims, holding that because FDA’s food regulations allowed Coca Cola’s labeling, a private party’s Lanham Act claim based on that labeling represented a necessary conflict between the two statutory schemes.Pom successfully petitioned the Supreme Court for certiorari, and the Supreme Court reversed.
The legal issue the Supreme Court addressed was whether and how the FDCA could be harmonized with the Lanham Act. In an 8-0 opinion, the Supreme Court rejected Coca-Cola’s argument that the FDCA precludes Lanham Act claims due to conflict between the two statutes. Instead, the Court highlighted the two statutes’ “complementary” relationship. Justice Anthony Kennedy, writing for the Court, explained:
Lanham Act suits take[ ] advantage of synergies among multiple methods of regulation. . . . [I]f Lanham Act claims were to be precluded then commercial interests—and indirectly the public at large—could be left with less effective protection in the food and beverage realm than in many other, less regulated industries.
No. 12-761, slip op. at 12 (June 12, 2014). In characterizing the relationship between the two statutes, Justice Kennedy emphasized their differing purposes. The FDCA, according to the Court, is a government-enforced statute concerned with protecting the safety of the public. The Court described the Lanham Act, on the other hand, as a private vehicle for protecting commercial interests. The Court reasoned that each statute concerns itself with governing separate and distinct aspects of the same food labeling practices, and thus, support rather than contradict each other. Id. at 11-12.
In its opinion, the Court also noted that the Lanham Act and FDCA had co-existed for 70 years and that Congress had intended that coexistence to continue when it declined to include federal claims in the preemption provision it enacted in the 1990 amendments to the FDCA. Slip op. at 9-11. Justice Kennedy also rejected Coca-Cola’s argument that allowing private parties to pursue Lanham Act claims based on food labeling would undermine national uniformity of food labeling. Allowing these claims to proceed, the Court reasoned, would merely subject defendants to the same variable patchwork of liability imposed by every other federal cause of action. Id. at 13-15.
Although the decision allows competitors to bring Lanham Act claims against each other, it is unlikely to help consumers seeking to file class actions asserting state law claims alleging deceptive food labeling. At the outset of the decision, Justice Kennedy stated: “This is not a pre-emption case.” Slip Op at 7. The court noted, however, that the 1990 FDCA pre-emption provision “forbids state-law requirements that are of the type but not identical to only certain FDCA provisions with respect to food and beverage labeling.” Id. at 10 Pom Wonderful’s Lanham Act claims were allowed to proceed because this “preemption provision by its plain terms applies only to certain state-law requirements, not to federal law.” Id. at 13. Accordingly, under the ruling companies may continue to argue that preemption or primary jurisdiction bars state law claims – including putative consumer class actions – based on allegedly deceptive food product labeling if those state law claims would impose a requirement different from or in addition to FDA’s regulations.
After the Supreme Court’s decision in Pom Wonderful, companies must continue the delicate balancing act of satisfying FDCA guidelines and safeguarding against Lanham Act claims while simultaneously successfully marketing their products.