Supreme Court: FDCA Compliance Does Not Bar Lanham Act Claims

by McDermott Will & Emery
Contact

POM Wonderful LLC v. Coca-Cola Co.

In a unanimous decision, the Supreme Court of the United States reversed the U.S. Court of Appeals for the Ninth Circuit ruling that the Food, Drug, and Cosmetic Act (FDCA) and its regulations do not bar lawsuits authorized under the Lanham Act.  POM Wonderful LLC v. Coca-Cola Co., Case No. 12-761 (Supr. Ct., June 12, 2014) (Kennedy, Justice).  Justice Kennedy, writing for the Supreme Court, explained that the two federal statutes are complementary, and the FDCA’s delegation of enforcement authority to the federal government did not indicate Congress’ intent to foreclose private enforcement of other federal statutes, such as the Lanham Act.

Background of the Case

Pom Wonderful produces, markets and sells pomegranate juice and pomegranate juice blends, including a pomegranate blueberry juice blend.  The Coca-Cola Company markets and sells juices and juice blends, including a pomegranate blueberry juice blend product.  The Coca-Cola product contains about 99.4 percent apple and grape juices, 0.3 percent pomegranate juice, 0.2 percent blueberry juice and 0.1 percent raspberry juice.  Among other things, the front label displays the words “pomegranate blueberry” in all capital letters, on two separate lines, and below those words, the phrase “flavored blend of 5 juices” in much smaller font.

Pom sued Coca-Cola alleging Coca-Cola’s name and labeling of the pomegranate blueberry juice blend product violated the false-advertising provision of the Lanham Act.  The district court granted partial summary judgment to Coca-Cola, ruling that Pom’s name and labeling claim under the Lanham Act was barred by the FDCA’s regulations.  Pom appealed.

The Ninth Circuit affirmed, holding that the FDCA and its regulations barred both the name and labeling aspects of Pom’s Lanham Act claim.  Relying on its own precedent, PhotoMedex, Inc. v. Irwin, the Ninth Circuit noted that “[w]here the FDA has not concluded that particular conduct violates the FDCA, we have even held that a Lanham Act claim may not be pursued if the claim would require litigating whether that conduct violates the FDCA.”  The Ninth Circuit thus concluded that “for a court to act when the FDA has not—despite regulating extensively in this area—would risk undercutting the FDA’s expert judgments and authority.”  IP Update, Vol. 15, No. 6.

The Supreme Court Decision

The Supreme Court granted certiorari to address the issue of whether a private party may bring a Lanham Act claim challenging a product label regulated under the FDCA.  IP Update, Vol. 17, No. 1.

Writing for the unanimous court, Justice Kennedy stated that competitors may bring Lanham Act claims challenging food and beverage labels regulated by the FDCA.  The Supreme Court first noted that this is not a pre-emption case dealing with whether state law is pre-empted by federal law, but rather a statutory interpretation case involving “the intersection of two federal statutes.”

Moving to the text of the two statutes, Justice Kennedy observed that neither the Lanham Act nor the FDCA expressly forbids or limits Lanham Act claims challenging labels that are regulated by the FDCA.  In fact, the Supreme Court noted that the two statutes “complement” each other in major respects, including their scope and purpose.  Namely, the Lanham Act permits one competitor to sue another for unfair competition and so protects commercial interests against unfair competition and the public from false or misleading product descriptions.  The FDCA prohibits misbranding and so protects public health and safety regarding food and beverage labeling.  The two statutes also complement each other in remedies, because while the FDA enforces the FDCA and its regulations, it “does not have the same perspective or expertise in assessing market dynamics that day-to-day competitors possess.”  On the other hand, the Lanham Act allows private parties whose “awareness of unfair competition practices may be far more immediate and accurate than that of agency rulemakers and regulators” to sue competitors. Justice Kennedy explained that in this regard the two statutes serve as distinct mechanisms to enhance protection of competitors and consumers.

The Supreme Court also reasoned that where two statutes are complementary (as here), it would show “disregard for congressional design” to hold that enforcement of one should preclude the other: “[i]t is unlikely that Congress intended the FDCA’s protection of health and safety to result in less policing of misleading food and beverage labels than in competitive markets for other products.”

On a similar basis, Justice Kennedy rebuffed the argument of the solicitor general, noting that the government’s position wrongly “assumes that the FDCA and its regulations are a ceiling on the regulation of food and beverages.”  As to whether U.S. Food and Drug Administration label regulations pre-empt the field, Justice Kennedy noted “[a]n agency may not reorder federal statutory rights without congressional authorization.”

Justice Breyer took no part in the consideration or decision of the case.

Practice Note: The Supreme Court’s ruling opens the door for competitors to bring Lanham Act claims even if a product label is compliant with the FDCA and its regulations.  This may lead to a rise in private false advertising claims brought by competitors in the food and beverage industry as food labels come under more scrutiny.

 

 

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.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery
Contact
more
less

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.