LaFrance on Federal False Advertising Claims Arising From FDA-Compliant Labels: POM Wonderful LLC v. Coca-Cola Co.

Excerpt:

In its second false advertising case this term, in POM Wonderful LLC v. Coca-Cola Co., 2014 U.S. LEXIS 4165 (June 12, 2014), the Supreme Court held that a misleading food or beverage label may be actionable under the false advertising provisions of the Lanham Act even if the label satisfies the requirements of the federal Food, Drug, and Cosmetics Act (FDCA) and regulations thereunder [an enhanced version of this opinion is available to lexis.com subscribers]. Thus, for the food and beverage industry, FDA compliance is not a safe harbor against false advertising claims.

I. Background

The federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq. [an annotated version of this statute is available to lexis.com subscribers] , prohibits "misbranding of any food" in interstate commerce, 21 U.S.C. § 331(b) [annotated version], including the use of a label that is "false or misleading in any particular," id. § 343(a) [annotated version], and authorizes penalties of fines and/or imprisonment for violations, id. § 333(a) [annotated version].

When Coca-Cola named its new multi-juice beverage "Pomegranate Blueberry" even though it contained only 0.3% pomegranate juice and 0.2% blueberry juice, POM Wonderful – another maker of pomegranate juice products – sued Coca-Cola for false advertising under California's false advertising and unfair competition laws, as well as under § 43(a)(1)(B) of the Lanham Act, which provides, in relevant part:

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . .

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1)(B) [annotated version]. To constitute false advertising under the Lanham Act, a representation must be either false on its face or, while literally true, likely to mislead and to confuse consumers given the merchandising context. Castrol, Inc. v. Pennzoil Co., 987 F.2d 939 (3d Cir. 1993) [enhanced version]; Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir. 1990) [enhanced version].

The district court held that the Lanham Act false advertising claims against the product's name and label were preempted because the claims could be construed as challenging the Food and Drug Administration (FDA) regulations that govern product labels, and could require the court to construe those regulations. It also held that the FDCA expressly preempted the plaintiff's state law claims. However, the court allowed the plaintiff to proceed with its Lanham Act claims against Coca-Cola's advertising and marketing of the product, because these claims would not require the court to interpret FDA regulations.

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