The Juicy Truth – Supreme Court Rules that POM May Bring False Advertising Claim Based on Coke’s Misleading Juice Label

On June 12, 2014, the Supreme Court issued an opinion holding that the Federal Food, Drug and Cosmetic Act (FFDCA) does not presumptively bar Lanham Act claims that challenge food and beverage labels. This decision comes at a time when consumers increasingly demand and have access to information about what they are buying, and companies are forced to make bolder claims about their products in order to maintain a competitive advantage in the marketplace. As a result, it is increasingly common for the regulatory spheres of the Lanham Act and FFDCA to intersect, with false and misleading Lanham Act claims being raised in litigation involving subject matter that is typically within the purview of the FFDCA. The Supreme Court’s decision in the POM Wonderful LLC v. Coca-Cola Co. case is, therefore, both highly relevant and significant.

POM brought suit against Coca-Cola for its “Pomegranate Blueberry” flavored juice, alleging that the product’s label was misleading (the drink contained, in actuality, only 0.3% pomegranate juice and 0.2% blueberry juice) and, therefore, was in violation of Lanham Act § 43, 15 U.S.C. § 1125. Coca-Cola argued that the FFDCA’s regulation of juice labels precluded POM’s Lanham Act claims. The Central District of California agreed, finding that the claim was precluded because the FDA had already reviewed the issues that formed the basis of POM’s Lanham Act claim and had not prohibited Coca-Cola’s label. 727 F. Supp. 2d 849 (C.D. Cal. 2010). On appeal, the Ninth Circuit affirmed, determining that Congress had entrusted “matters of juice beverage labeling to the FDA,” and allowing the Lanham Act claim to proceed would “risk undercutting the FDA’s expert judgment and authority.” 679 F.3d 1170, 1178 (2012).

The Supreme Court reversed, noting that neither the Lanham Act nor the FFDCA expressly forbids or limits Lanham Act claims that challenge labels regulated under the FFDCA. Additionally, the Court noted that the FFDCA and Lanham Act serve different but complementary roles in the context of food and beverage labeling. Whereas the FFDCA is focused on health and safety, the purpose of the Lanham Act is to prevent unfair competition. As the FDA does not have the perspective or expertise in market dynamics that a competitor would have, the Lanham Act empowers private parties to protect their market interests. Accordingly, the Court found that POM could move forward with its misleading advertising claim and remanded the case to the Ninth Circuit.

Courts across the country, in the context of food and beverage labeling, as well as pharmaceutical advertising, have previously found that the FFDCA cannot be used as a shield against Lanham Act claims based on false or misleading advertising and unfair competition. The Supreme Court’s recent decision reinforces these holdings and confirms Congress’s intent for the Lanham Act and FFDCA to operate as complementary regimes with distinct purposes.