Pom Wonderful, LLC v. The Coca-Cola Company

PETITIONER: Pom Wonderful, LLC
RESPONDENT: The Coca-Cola Company
LOCATION: Pom Wonderful, LLC

DOCKET NO.: 12-761
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT:

CITATION: 573 US (2013)
GRANTED: Jan 10, 2014
ARGUED: Apr 21, 2014
DECIDED: Jun 12, 2014

Facts of the case

Pom Wonderful, LLC (Pom Wonderful), a California-based beverage company, sold various types of juice, including a pomegranate blueberry juice blend. In 2007, Coca-Cola Company (Coca-Cola) announced its own version of a pomegranate blueberry juice. In 2008, Pom Wonderful sued Coca-Cola in federal district court and argued that Coca-Cola misled consumers into believing that Coca-Cola's product contained pomegranate and blueberry juices when it actually contained 99% apple and grape juices and only 0.5% pomegranate and blueberry juice. Specifically, Pom Wonderful claimed that Coca-Cola violated provisions of the Lanham Act, a federal law prohibiting false advertising, as well as California's false advertising and unfair competition laws. The lawsuit challenged the name, labeling, marketing, and advertising of Coca-Cola's product.

The district court held that Pom Wonderful's claims regarding the name and label of the juice were barred by a separate law, the Food, Drug and Cosmetics Act (FDCA). The FDCA allows the Food and Drug Administration (FDA) to regulate the labels on, among other items, juices. Because the FDA has exclusive authority to file claims for violations of the FDCA, the court feared that a decision under the Lanham Act would undercut the FDA's authority to regulate juice labels. After both parties gathered evidence, the court granted summary judgment in favor of Coca-Cola on the name and label issues. Although the court gave Pom Wonderful the opportunity to proceed to trial on the remaining issues, Pom Wonderful conceded that it could not win without the name and label issues. Pom Wonderful appealed.

The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court's decision to bar Pom Wonderful's claim with respect to the name and labeling of Coca-Cola's juice. It vacated the lower court's ruling in favor of Coca-Cola, instead allowing Pom Wonderful's case to proceed on the remaining claims.

Question

Did the U.S. Court of Appeals err when it held that FDA regulations barred Pom Wonderful's claim for false advertising under the Lanham Act?

Media for Pom Wonderful, LLC v. The Coca-Cola Company

Audio Transcription for Oral Argument - April 21, 2014 in Pom Wonderful, LLC v. The Coca-Cola Company

Audio Transcription for Opinion Announcement - June 12, 2014 in Pom Wonderful, LLC v. The Coca-Cola Company

Justice Kennedy has our opinion in case 12-761, POM Wonderful versus The Coca-Cola Company.

This is a case about the intersection of two federal statutes.

The first is the Lanham Act.

The second is the Federal Food, Drug, and Cosmetic Act also known as the FDCA.

The Lanham Act allows certain commercial interest including competitors to sue for unfair competition from false or misleading product descriptions.

The FDCA, the second Act forbids the misbranding of food and beverages.

This includes use, prohibition on use of false or misleading labeling.

There are regulations implementing the FDCA.

These regulations include requirements regarding the labeling of beverages composed of multiple juices referred to often as juice blends.

Both parties in this case make juice blends.

The petitioner is POM Wonderful LLC.

POM makes and sells a pomegranate blue berry juice blend.

One of POM's competitors is the respondent, the Coca-Cola Company.

Coca-Cola's Minute Maid division sells a juice blend with a label that displays the words pomegranate blueberry with far more prominence than the other words on the label, but on -- on close reading it -- it's disclosed that the juice is a blend of five juice -- juices and in truth, the Coca-Cola product contains about 0.3% pomegranate juice and 0.2% blueberry juice.

POM sued Coca-Cola under the Lanham Act.

POM alleged that the label for the Coca-Cola juice blend is deceptive and misleading.

The Court of Appeals held that the FDCA entrust matters of juice blending to the expert judgment of the Food and Drug Administration.

That agency has not forbidden Coca-Cola's label.

So the Court of Appeals for the Ninth Circuit held that POM's Lanham Act claim is precluded or barred by the FDCA.

The Court of Appeals conclusion was incorrect, neither the Lanham Act nor the FDCA in express terms forbids Lanham Act claims challenging labels that are regulated by the FDCA.

The Lanham Act and the FDCA have coexisted since 1946.

If Congress had concluded that Lanham Act suits could interfere with the FDCA, it might well -- it might well have enacted the provision addressing the issue during the 70 years and it has not done so.

The structures of the FDCA and the Lanham Act reinforce the conclusion we draw from the text.

The Lanham Act and the FDCA complement each other in major respects.

Each has its own scope and purpose.

The Lanham Act protects commercial interest against unfair competition.

The FDCA protects public health and safety.

The two statutes also complement each other with respect to remedies.

Unlike the Lanham Act, which is enforced by private parties, the FDCA and its implementing regulations are primarily enforced by the Food and Drug Administration, but the FDA does not have the same perspective or expertise in assessing market dynamics as day-to-day competitors have.

Allowing Lanham Act suits for false and misleading labels takes advantage of synergies among multiple methods of regulation.