POM Wonderful Decision: Companies Cannot Rely on FDCA for Protection from False Advertising Liability

The US Supreme Court allows private parties to bring Lanham Act claims challenging product labels that otherwise satisfy the Food, Drug, and Cosmetic Act.

In a battle of the beverages, the Supreme Court recently reversed the Ninth Circuit decision in POM Wonderful LLC v. Coca-Cola Co., thereby allowing companies to initiate false advertising lawsuits against competitors whose products satisfy the Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, but could otherwise mislead consumers. This decision foreshadows the increasing likelihood that companies regulated by the FDCA will be the target of false advertising lawsuits in various jurisdictions across the country, where local false advertising standards may vary. As compliance with the FDCA and its implementing regulations is no longer sufficient to ward off lawsuits, companies should consider conducting an audit of existing product labels to ensure their compliance with the Lanham Act, monitor court decisions implementing the POM case, and carefully screen all advertisements before publication for compliance with the FDCA and Lanham Act.

Background -

In 2008, POM Wonderful (POM) sued Coca-Cola alleging that Coca-Cola violated the false advertising provisions of the Lanham Act (15 U.S.C. § 1125(a)) because its new juice, Pomegranate Blueberry Flavored Blend of 5 Juices (the Drink), displayed pomegranates and blueberries on the label and in the name of the Drink, even though these juices did not predominate within the Drink itself. A California District Court granted summary judgment for Coca-Cola ruling that the FDCA’s existing regulations, which permitted this label, barred POM’s challenge because the regulations already directly addressed the issues that formed the basis of the Lanham Act claim. In affirming this decision, the Ninth Circuit Court of Appeals held the FDCA precludes claims under the Lanham Act that would require litigating whether a party’s conduct violated the FDCA as that “would risk undercutting the [United States Food and Drug Administration’s (“FDA”)] expert judgment and authority.” The Supreme Court reversed the Ninth Circuit’s decision, finding that the FDCA and the Lanham Act complement each other, and Congress did not intend the FDCA to preclude Lanham Act claims.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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