In POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014), the Supreme Court unanimously held that competitors may bring false advertising claims under the Lanham Act challenging food and beverage labels regulated under the Federal Food, Drug, and Cosmetic Act (FDCA). The Supreme Court’s decision in POM was greatly anticipated by some observers in heavily regulated industries (e.g., pharmaceuticals) because of the potential for a statement on preemption or the primary jurisdiction doctrine. Certain district courts have relied on the Ninth Circuit’s POM reasoning to find state law consumer fraud and false advertising claims preempted under the primary jurisdiction doctrine. See, e.g., Astiana v. Hain Celestial Grp. Inc., 905 F. Supp. 2d 1013 (N.D. Cal. 2012). A decision by the Supreme Court affirming the Ninth Circuit could have provided additional ammunition for defendants asserting a primary jurisdiction defense in the product liability or other contexts. But instead the Supreme Court decided the issue on different grounds.
In POM, petitioner, which produces and markets a pomegranate-blueberry juice, filed a Lanham Act suit alleging that the name, labeling and advertising of Coca-Cola’s “Pomegranate Blueberry” juice misleads consumers into believing that it consists predominantly of pomegranate and blueberry juice, thereby causing decreased sales for petitioner. 134 S. Ct. at 2235. The lower courts held that the FDCA and the FDA’s regulations precluded petitioner’s suit under the Lanham Act. Id. at 2235-36. The Supreme Court reversed, finding first that this was not a preemption case because it did not raise the question of whether state law is preempted by federal law. Rather, the action concerned a question of preclusion between two federal statutes that hinged on statutory interpretation. Id. at 2236. The Court noted that neither the Lanham Act nor the FDCA expressly forbids Lanham Act claims challenging labels regulated by the FDCA, finding this to be “powerful evidence that Congress did not intend FDA oversight to be the exclusive means” of regulating food and beverage labeling. Id. at 2237. The Court further found that the structures of the two statutes reinforced the conclusion drawn from the text. The two statutes are complementary – while both touch on food and beverage labeling, the Lanham Act protects commercial interests and the FDCA protects health and safety. Id. at 2238. Moreover, because the FDCA’s enforcement is largely committed to FDA and the Lanham Act allows private enforcement, “[a]llowing Lanham Act suits takes advantage of synergies among multiple methods of regulation.” Id. at 2239. For these reasons, the Court stated that “[a] holding that the FDCA precludes Lanham Act claims challenging food and beverage labels would not only ignore the distinct functional aspects of the FDCA and the Lanham Act but would also lead to a result that Congress did not likely intend.” Id.
Because the Supreme Court expressly stated that its decision was about statutory interpretation rather than preemption, the decision does not undermine the potential defense of primary jurisdiction in cases involving heavily regulated industries. But it did not yield the strong opinion on primary jurisdiction that some had hoped for. The POM decision does ensure that the Lanham Act remains a viable option for businesses in the food and beverage industry seeking to protect their commercial interests even when those interests involve a product that is regulated under the FDCA.