(Photo: Diego M. Radzinschi/NLJ.)
The U.S. Supreme Court on Thursday gave POM Wonderful LLC the go-ahead to sue competitor Coca-Cola Co. for false or misleading advertising of its products.
The high court reversed the U.S. Court of Appeals for the Ninth Circuit, which found that POM’s 2008 lawsuit under the federal Lanham Act was preempted by the fact that the Coca-Cola label at issue—using the words “Pomegranate Blueberry”—complied with regulations under the Food, Drug and Cosmetic Act (FDCA), as amended by the Nutrition Labeling and Education Act.
Justice Anthony Kennedy wrote the unanimous opinion. Justice Stephen Breyer was recused from the case.
The Lanham Act allows a business allegedly injured by a competitor’s false or misleading advertising of its products to bring a civil lawsuit. POM claimed the use of the words “Pomegranate Blueberry” on Coke’s label misleads consumers into believing that the product consists primarily of pomegranate and blueberry juices. In fact, the juice consists mainly of apple and grape juice (99.4 percent) blended with 0.3 percent pomegranate juice and 0.2 percent blueberry juice.
“Allowing Lanham Act suits takes advantage of synergies among multiple methods of regulation,” Kennedy wrote. “A holding that the FDCA precludes Lanham Act claims challenging food and beverage labels also could lead to a result that Congress likely did not intend.”
POM Wonderful sued Coca-Cola in 2008 under the federal Lanham Act, which allows a business allegedly injured by a competitor’s false or misleading advertising of its products to bring a civil lawsuit.
The Ninth Circuit held that Coke’s label complied with regulations under the Food, Drug and Cosmetic Act (FDCA), as amended by the Nutrition Labeling and Education Act, and that the agency authorization preempted the Lanham Act claims.
Consumer groups, a number of states and other product makers were watching the case closely because they were concerned about a decision’s impact on the ability to bring false- or misleading -advertising claims for a variety of products as well as its potential impact on companies’ liability in those situations.
In the high court, Coke’s counsel, Kathleen Sullivan of Quinn Emanuel Urquhardt & Sullivan, had argued that that if express provisions in the nutrition labeling law preempted state law claims of the kind that POM was making under the Lanham Act, it followed that Congress, in the interest of national uniformity of labeling, intended the law’s regulations to trump Lanham Act claims. (Read earlier National Law Journal coverage of oral argument here.)
However, her opponent, Seth Waxman of Wilmer Cutler Pickering Hale and Dorr, had countered that the FDCA regulations did not represent a judgment that, for all purposes, the name on a product label is OK. The FDA, he argued, had said in this case that it had no expertise to decide what kind of words and symbols, or the combination of them, would have a tendency to misrepresent the nature or quality of the goods from a competitor’s perspective.
The Obama administration, supporting neither party, had offered the justices something of a middle-ground option, saying that if the FDCA has specifically permitted a type of name on a label, then a Lanham Act claim is precluded. However, if the FDCA or the FDA had not spoken to the particular issue with any degree of specificity, the government argued, there was no problem with the Lanham Act claim going forward, because in that case, no one was second-guessing any judgment.
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