On June 12, 2014, in the case of POM Wonderful v. the Coca-Cola Company, U.S. Case No. 12-761, the Supreme Court ruled that beverage labels that comply with FDA regulations are nevertheless not exempt from claims for false advertising under the Lanham Act. In the trial court proceeding, Pom Wonderful sued Coca-Cola alleging that Coca-Cola’s juice drink marketed as “Pomegranate Blueberry Juice” was falsely advertised because the drink actually contained 99.4% apple and grape juice and only a miniscule .3% pomegranate juice. Coca-Cola responded by arguing that Pom Wonderful’s claim was barred because Coca-Cola’s label complied with FDA beverage labeling requirements.
At issue before the trial court was the question of whether compliance with FDA beverage labeling requirements constituted a defense to a Lanham Act false advertising claim. The trial court held that the more detailed FDA statute (Food Drug and Cosmetics Act) preempted the more general Lanham Act and thus compliance with the FDA’s labeling requirements acted as a bar to the Lanham Act Claim. The Ninth Circuit affirmed. The Supreme Court reversed holding that the two statutes were complementary and one could not serve to bar a claim brought under the other.
The ruling means that food and beverage labels will likely come under increased scrutiny by competitors and may lead to an increase in “brand wars.”
