In a unanimous opinion authored by Justice Anthony Kennedy, the U.S. Supreme Court held that POM Wonderful may proceed with its Lanham Act suit against Coca-Cola and that the statute can peacefully coexist with the Federal Food, Drug, and Cosmetic Act (FDCA).
No stranger to litigation, POM challenged Coke’s labeling of the Pomegranate Blueberry Flavored Blend of Five Juices drink, arguing that the drink’s contents (0.3 percent pomegranate juice and 0.2 percent blueberry juice) belied its label in contravention of the Lanham Act.
Lower courts agreed with Coke that the Lanham Act could not proceed because the labels were regulated under the FDCA and regulations promulgated by the Food and Drug Administration. But the Supreme Court reversed.
“Nothing in the text, history, or structure of the FDCA or the Lanham Act shows the congressional purpose or design to forbid these suits,” Justice Kennedy wrote. “Quite to the contrary, the FDCA and the Lanham Act complement each other in the federal regulation of misleading food and beverage labels. Competitors, in their own interest, may bring Lanham Act claims like POM’s that challenge food and beverage labels that are regulated by the FDCA.”
The Court disagreed with Coke’s argument that the FDA should take the lead to encourage national uniformity in food and beverage labeling and found no evidence that Congress intended to foreclose private enforcement of other federal statutes.
Neither statute by its express terms references the other and the two have coexisted since the Lanham Act was enacted in 1946. Both have been amended in the last 70 years, the justices added, without the addition of language precluding enforcement of other federal laws, adding support that FDA oversight is not the exclusive means of food and beverage label regulation.
“The Lanham Act and the FDCA complement each other in major respects, for each has its own scope and purpose,” Justice Kennedy wrote. “Although both statutes touch on food and beverage labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety.”
To read the opinion in POM Wonderful v. Coca-Cola Co., click here.
Why it matters: In reversing the Ninth Circuit, the U.S. Supreme Court established that, at least in the false advertising/unfair competition context, manufacturers cannot always hide behind one federal statute in order to avoid liability under another. The mere fact that a product name or label may comply with the provisions of the FDCA does not mean that the chosen name or label is not misleading or otherwise deceptive under the Lanham Act. The Court makes clear that companies are entitled to challenge a competitor’s representations – even where such representations are consistent with another federal statute – in order to ensure that marketplace competition remains fair. The U.S. Supreme Court’s green light for Lanham Act suits brought by competitors could result in brand wars and potentially open the litigation floodgates. Accordingly, companies must carefully market their products to satisfy FDCA guidelines while simultaneously guarding against Lanham Act challenges.