In a unanimous decision last month, the US Supreme Court ruled POM Wonderful was able to continue with its lawsuit against The Coca-Cola Company for alleged Lanham Act violations.
POM, a supplier of pomegranates and pomegranate products, initially sued Coca-Cola, claiming the labeling, marketing and advertising of the company’s pomegranate and blueberry juice misled consumers and caused unfair competition. POM is seeking damages and an order to ban the labeling.
The Supreme Court’s ruling stated that although Coca-Cola’s label complies with requirements of the Federal Food, Drug and Cosmetic Act (FDCA), it is not impervious to suits filed under the Lanham Act.
The Supreme Court held that the FDCA and Lanham Act are complementary with respect to misleading food labels.
Attorneys in the food industry responded to Food Engineering regarding the significance of the case.
Dale Giali, an attorney with Mayor Brown LLP who focuses on food and beverage litigation called the ruling a significant victory for POM. But he says it was a defeat for Coke, FDA and uniformity and certainty regarding food labeling.
“While consumers will indirectly benefit from competitor Lanham Act claims regarding allegedly misleading food labels, the court makes it clear this is not a question of state v. federal law or consumer suits, and does not in any way undermine preemption principles that would apply to state-law claims against labels regulated by FDA,” Giali says.
Thomas Williams, trademark partner with Ulmer and Berne LLP, agrees with the court and says if Congress intended FDCA to preclude a Lanham Act claim, it would have stated so.
Williams points that because of the ruling, competitors may bring Lanham Act claims like POM’s that challenge food and beverage labels that are regulated by the FDCA, resulting in a significant ripple effect.
“The court did not opine on what impact, if any, compliance with regulations may have on the merits of the false advertising claim,” Williams says. “The court merely reversed and remanded. That is a big, open question the lower courts will need to sort through.”
Tim Kelly, partner and chair of the Trademark Practice Group at Fitzpatrick, Cella, Harper & Scinto LLP, says the court established that essentially, at least in the false advertising/unfair competition context, manufacturers cannot hide behind one federal statute to avoid liability under another.
“The situation presented here is not really very different from any other situation,” Kelly says. “Yes, it potentially opens up the manufacturer to multiple suits and multiple assertions of what is ‘clear’ or not ‘misleading,’ but that has always been the case under [the Lanham Act].”
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