Supreme Court Holds False Advertising Claims Not Pre-empted by FDCA

On June 12, 2014, the Supreme Court issued its decision in Pom Wonderful LLC v. Coca-Cola Co., No. 12-761, holding that Lanham Act false-advertising claims are not pre-empted by the Federal Food, Drug, and Cosmetic Act (“FDCA”) or related Food and Drug Administration (“FDA”) regulations. In that case, POM Wonderful LLC (“POM”), a pomegranate-juice beverage producer, sued its competitor, Coca-Cola Company (“Coca-Cola”), under § 43(a) of the Lanham Act, claiming that Coca-Cola’s “Pomegranate Blueberry” juice beverage was falsely labeled because, in reality, the beverage contained about “99.4% apple and grape juices,” and only “0.3% pomegranate juice” and “0.2% blueberry juice.” Slip op. at 5-6. In proceedings below, Coca-Cola successfully argued that POM’s Lanham Act claim should be dismissed because it was pre-empted by the FDCA and FDA regulations, which permitted Coca-Cola’s type of beverage labeling. Specifically, the FDA allows beverage labels to list flavoring juices that are not the predominant juice contained in the beverage.

The Supreme Court reversed the dismissal. First, the Court determined that the FDCA only pre-empted certain state laws and did not pre-empt other federal statutes, such as the Lanham Act. Second, the Court found that, as a matter of statutory interpretation, the FDCA does not preclude private causes of action under the Lanham Act merely because FDA regulations touch on the same advertising alleged to be false or misleading in the Lanham Act claim. FDCA’s and the Lanham Act’s false-advertising provisions complement each other. Each has its own separate scope and purpose. The FDCA and FDA regulations focus on consumer safety, while the Lanham Act protects competitors from misleading or unfair marketing strategies. Unlike the purely administrative role of the FDCA, the Lanham Act motivates businesses to behave well by subjecting them to liability to competitors injured by unfair marketing.

Third, as a practical matter, precluding Lanham Act liability for false advertising would actually create a less effective enforcement scheme for food and beverage labeling. The FDA does not preapprove food and beverage labeling, and does not necessarily pursue enforcement measures against all problem labels. If Lanham Act claims were precluded, false labels that the FDA did not take action against would be immune from any consequences. Congress could not have intended the FDCA to result in less protection for the public from misleading labels.

The case was reminded for a determination of whether the Coca-Cola labels violated the Lanham Act.