By Scott Behrendt, Esq. - Los Angeles - June 17, 2014
On June 12, 2014,the Supreme Court of the United States: Home issued its opinion in the matter of POM Wonderful LLC v. Coca-Cola Co.,U.S. Supreme Court,No. 12-761, holding that competitors may bring Lanham Act claims challenging food and beverage labels regulated by the Federal Food,Drug,and Cosmetic Act.As explained by the Court:

This case involves the intersection of two federal statutes. The Lanham Act permits one competitor to sue another for unfair competition arising from false or misleading product descriptions. 15 U. S. C. §1125. The Federal Food, Drug, and Cosmetic Act (FDCA) prohibits the misbranding of food and drink. 21 U. S. C. §§321(f), 331. To implement the FDCA’s provisions,the Food and Drug Administration (FDA) has promulgated regulations regarding food and beverage labeling,including one concerning juice blends.Unlike the Lanham Act,which,relies in large part for its enforcement on private suits brought by injured competitors,the FDCA and its regulations give the United States nearly exclusive enforcement authority and do not permit private enforcement suits. The FDCA also pre-empts certain state misbranding laws.

Petitioner POM Wonderful LLC,which produces,markets,and sells,inter alia,a pomegranate-blueberry juice blend,filed a Lanham Act suit against respondent Coca-Cola Company,alleging that the name,label,marketing,and advertising of one of Coca-Cola’s juice blends mislead consumers into believing the product consists predominantly of pomegranate and blueberry juice when it in fact consists predominantly of less expensive apple and grape juices,and that the ensuing confusion causes POM to lose sales.

In rejecting Coca-Cola's arguments and ruling in favor of POM,and as highlighted in the opinion syllabus,the Court held:

Competitors may bring Lanham Act claims like POM’s challenging food and beverage labels regulated by the FDCA. This result is based on the following premises. First, this is not a pre-emption case,for it does not raise the question whether state law is pre-empted by a federal law [],but instead concerns the alleged preclusion of a cause of action under one federal statute by the provisions of another federal statute. [] Second, this is a statutory interpretation case; and analysis of the statutory text,aided by established interpretation rules,controls. .Neither the Lanham Act nor the FDCA,in express terms,forbids or limits Lanham Act claims challenging labels that are regulated by the FDCA.

The absence of such a textual provision when the Lanham Act and the FDCA have coexisted for over 70 years is “powerful evidence that Congress did not intend FDA oversight to be the exclusive means” of ensuring proper food and beverage labeling.[] In addition, and contrary to Coca-Cola’s argument, Congress, by taking care to pre-empt only some state laws, if anything indicated it did not intend the FDCA to preclude requirements arising from other sources. . . . Because the FDA does not necessarily pursue enforcement measures regarding all objectionable labels,preclusion of Lanham Act claims could leave commercial interests—and indirectly the public at large—with less effective protection in the food and beverage labeling realm than in other less regulated industries.

Coca-Cola’s arguments do not support its claim that preclusion is proper because Congress intended national uniformity in food and beverage labeling.

The Government’s intermediate position—that a Lanham Act claim is precluded “to the extent the FDCA or FDA regulations specifically require or authorize the challenged aspects of [the] label,”and that this rule precludes POM’s challenge to the name of Coca-Cola's product—is flawed, for the Government assumes that the FDCA and its regulations are a ceiling on the regulation of food and beverage labeling when Congress intended the Lanham Act and the FDCA to complement each other with respect to labeling.

The practical effect of the Court's decision will likely be additional lawsuits by companies challenging their competitors' product labels.

Scott Behrendt is an attorney with the law firm of Theodora Oringher and can be reached at 310-557-2009 or 714-549-6200. For more information please visit www.scottbehrendtattorney.com