The US Supreme Court has agreed to consider a dispute between Pom Wonderful (Pom) and The Coca-Cola Company related to whether a drink label can be considered deceptive under federal false advertising laws, but permissible under regulations of the Food & Drug Administration (FDA). A decision in the case could have a significant impact on federal false advertising litigation and potentially force some companies to reexamine their food labeling practices.
The dispute stems from the name and label that The Coca-Cola Company, through its Minute Maid business unit, affixed to a juice blend that consists of 99.4 percent apple and grape juice, 0.3 percent pomegranate juice, 0.2 percent blueberry juice, and 0.1 percent raspberry juice. The Coca-Cola Company marketed the product under the names “Pomegranate Blueberry” or “Pomegranate Blueberry Flavored Blend of 5 Juices.” The label on the product features a graphic that depicts all five of the fruits used in the blend, with blueberries, raspberries, and grapes in front of a halved pomegranate and a halved apple.
In 2008, Pom sued The Coca-Cola Company — one of its main competitors in the pomegranate juice business — under Section 43(a) of the federal Lanham Act, which, among other things, allows one private party to sue another for false or misleading advertising. Pom claimed that, given the composition of the juice blend, the labeling, marketing, and advertising of The Coca-Cola Company’s product misled consumers to believe that the juice contains mainly pomegranate and blueberry juice. The Coca-Cola Company, on the other hand, argued that by calling the juice a “flavored blend” of juices and featuring a prominent graphic that included all the relevant fruits in the blend, it accurately tells consumers what the product is and what it tastes like, which, according to The Coca-Cola Company, is pomegranate and blueberry.
Most notably, The Coca-Cola Company also argued that the naming and labeling of the juice blend is in full compliance with FDA regulations that govern food labeling and therefore cannot be deceptive under the Lanham Act. As The Coca-Cola Company points out, the FDA has specifically considered how manufacturers should label “blends or mixtures of several juices, with one or two juices present in only minor amounts giving them flavor.” After a formal notice-and-comment rulemaking process, the FDA found that the terms “flavored” and “blend” are sufficient to inform consumers as to the nature of the product and do not erroneously suggest that one juice predominates over others. With such detailed guidance from the FDA, The Coca-Cola Company argued that courts should not permit private parties to use a general statute such as the Lanham Act, which merely prohibits a broad category of conduct, to undermine the FDA’s express authority and considered regulatory judgments.
The US Court of Appeals for the Ninth Circuit agreed with The Coca-Cola Company, holding that where the FDA has specifically authorized the use of certain labeling statements, private litigants should not be able to argue that those statements are false and deceptive under the Lanham Act. The court also noted that it was not holding that “mere compliance” with FDA regulations will always insulate a defendant from liability under the Lanham Act, but that when the FDA has extensively considered the exact matters raised by a lawsuit, it is not proper to permit a private party to overturn the FDA’s expert judgment.
A date for arguments before the Supreme Court has not been set yet, but Arent Fox will continue to monitor this case and any other developments related to advertising claims under the Lanham Act. Please contact Anthony V. Lupo, Sarah L. Bruno, James R. Ravitz, or Daniel B. Jasnow with questions.