Supreme Court to Explore Tension between FDA Labelling Laws and False Advertising under the Lanham Act

On January 10, 2014, the Supreme Court agreed to hear the appeal in  POM Wonderful v Coca-Cola.  This case explores the tension between how the FDA [Food and Drug Administration] deals with factual statements on labelling versus how the Lanham Act, which governs trade mark law and false advertising law, deals with factual statements on labelling.  At trial and then on appeal, the courts below took the view that the mere existence of specific regulations by the FDA relating to labelling preempts the ability of a private company to sue for false statements in the labelling under the Lanham Act. The Supreme Court will determine whether that is a correct interpretation of the FDA regulations.

The case involves a dispute between Coca-Cola's Minute Maid group and POM Wonderful relative to a Minute Made fruit beverage labelled as “pomegranate and blueberry” although made primarily from apple juice.  FDA regulations allow juices to feature the principle flavoring element on the label, even where a beverage is not comprised primarily of that juice.

Whereas POM Wonderful contends that FDA rules should not protect a confusing or misleading lay out or label, Minute Maid takes the position that FDA rules should be a complete defense to the labelling of its beverage.

The key question raised in the appeal is whether a Lanham Act suit contesting the truth of labelling that complies with FDA regulations amounts to an attempt at private enforcement of FDA regulations or, alternatively, an attempt to second guess FDA regulations.  If the latter, the Lanham Act false advertising claim may be pre-empted.

A decision by the Supreme Court’s decision could lay the groundwork for determining when a Lanham Act false-advertising claim can move forward in the face of regulation in that same field. The decision is likely to have significant impact not only on the pharmaceutical and food and beverage industry, but also on other industries where the government regulates advertising and labelling. Stay tuned.