Where’s the Beef? High Court Approves Deceptive Advertising Claims Based upon Allegedly False Descriptions of Food and Drink

June 20th, 2014 by Qui Tam

Under the Lanham Act, one can bring a suit claiming that the defendant has engaged in unfair competition by using misleading advertising or labeling.  The Federal Food, Drug and Cosmetic Act (“FDCA”) prohibits, among other things, the misbranding of food and drink.  Under the FDCA, the United States is generally the only one who can initiate an action against someone who has used false or misleading labeling.  In Pom Wonderful, LLC v. Coca-Cola Company, No. 12-761 (June 12, 2014), the United States Supreme Court examined whether a private party may bring a Lanham Act claim challenging a food or drink label that is regulated by the FDCA.

Pom Wonderful distributes pomegranate juices.  Coca Cola, under its Minute Maid brand, created a juice blend made up largely of apple and grape juices as well as a small amount of pomegranate, blueberry and raspberry juices.  Although the drink only contained 0.3% pomegranate and 0.2% blueberry juices, the words “pomegranate” and “blueberry” appeared on the front label for the product in all capital letters.  The label also had pictures of blueberries, grapes and raspberries in front of a halved pomegranate and a halved apple.  Pom Wonderful sued Coca Cola under the Lanham Act claiming that its label deceived customers and misled them into believing that the drink was made up mostly of pomegranate and blueberry juices when it actually contained mostly apple and grape juices.  Coca Cola responded that it was permitted to use the label under the FDCA and that the FDCA prevented a private party, like Pom Wonderful, from proceeding with a suit under the Lanham Act.

The Supreme Court disagreed with Coca Cola.  Initially, the Court stated that there was no language in either the Lanham Act or FDCA which prevented someone from bringing suit under the Lanham Act challenging a label which also happened to be regulated by the FDCA.  Moreover, while both statutes dealt with food and beverage labeling, each provision had its own scope and purpose.  According to the Court, the statutes complement each other.  Specifically, the Lanham Act protects commercial interests against unfair competition while the FDCA protects the public health and safety.  Furthermore, the Food and Drug Administration, which is primarily responsible for enforcing the FDCA, does not have expertise in judging the effect that labels might have on competition.  Rather, this knowledge is in the hands of those who participate in the marketplace and the Lanham Act draws on this experience by empowering those participants to challenge food and beverage labels that they believe deceive and mislead consumers.  As a result, the Court held that the trial court should not have found in favor of Coca Cola and sent the case back to that court for further proceedings.

It is anticipated that the Pom Wonderful decision will encourage those in the food and beverage industry to place greater scrutiny on labels and other forms of advertising with an eye towards whether they can accuse a competitor of trying to sell consumers a pig in a poke.

 

Leave a Reply