Who has the right to sue to prevent misleading and deceptive labeling of food and beverage products—private trademark owners, or the federal government? Trick question! According to the U.S. Supreme Court, the answer is both.
Yesterday, in a unanimous opinion, the Supreme Court ruled that POM Wonderful, LLC (“POM”), the pomegranate juice producer, is not precluded from suing the Coca-Cola Company (“Coca-Cola”) under the Lanham Act for deceptively labeling its juice products, even though food and beverage labels are governed by the Food, Drug, and Cosmetic Act(“FDCA”) and the U.S. Food and Drug Administration (“FDA”) regulations issued thereunder. Thus, POM’s private false advertising claim is not barred simply because the federal government has the authority to regulate the misbranding or mislabeling of food and drinks. The Court emphasized the discrete purposes of the two laws: the Lanham Act is a private mechanism by which competitors can protect their brands, whereas the FDCA is a public protection measure under which the government can regulate health and safety.
The Supreme Court’s ruling reversed the U.S. Court of Appeals for the Ninth Circuit, which had held that the enforcement of food and beverage labeling is under the exclusive purview of the federal government. The Ninth Circuit had stated that in cases where the Lanham Act and FDCA govern the same label, the FDCA is superior and bars Lanham Act claims. The Supreme Court disagreed, holding that, “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.”
This case stems from POM’s contention that Coca-Cola, which sells juice products under its Minute Maid brand, misleads consumers about the contents of its juice to the detriment of competitors like POM. The product at issue is a juice blend labeled “Pomegranate Blueberry” in large print, followed in smaller type by the words “Flavored Blend of 5 Juices.” In reality, this product contains just 0.3% pomegranate juice and 0.2% blueberry juice, and consists of over 99% apple and grape juices. POM argued that Coca-Cola’s label misleads consumers to think that its product contains primarily pomegranate and blueberry juice, and that this injures sellers of pomegranate juice like POM.
The Court’s ruling was not a surprise, as the justices expressed pointed skepticism of Coca-Cola’s defenses during oral arguments. Coca-Cola’s lawyer argued that, “we don’t think that consumers are quite as unintelligent as POM must think they are. They know when something is a flavored blend of five juices [and] the non-predominant juices are just a flavor.” In response, Justice Anthony Kennedy cracked, “Don’t make me feel bad because I thought that this was pomegranate juice.” The Court’s unanimous ruling seems to indicate that Justice Kennedy was not alone.
This decision could be a boon for trademark owners. Already, commentators have speculated that as a result of this opinion, litigation involving misleading product labeling will increase, “because companies can no longer claim a safe harbor from those suits simply because the [FDA] authorized their labels.” The Court has cleared up confusion surrounding the intersection of these two federal laws and has provided trademark owners in the food and beverage industry with confidence to protect their rights even if a FDA regulation also governs product labeling. Although POM will still have to prove that Coca-Cola’s labels are in fact deceptive and misleading under §43 of the Lanham Act, yesterday’s ruling affords POM the opportunity to have its day in court.
The case is POM Wonderful LLC v. Coca-Cola Co., No. 12-761 (U.S. June 12, 2014).