Supreme Court Decision May Lead to More False Advertising Claims in Food and Beverage Industry
The Supreme Court's ruling in Pom Wonderful LLC v. Coca-Cola Co. may open the door to more false advertising claims regarding food and beverage labeling.
The Lanham Act permits one competitor to sue another for unfair competition arising from false or misleading product descriptions. The FDA also regulates food and drink labeling in a myriad of labeling requirements and standards authorized by the Federal Food, Drug and Cosmetic Act ("FDCA"). Competitors, however, are not allowed to bring claims to enforce the FDCA standards.
In the recent case before the Supreme Court, POM Wonderful LLC, which sells a pomegranate-blueberry juice blend, filed a lawsuit against Coca-Cola, alleging that the name and label of one of Coca-Cola's juice blends mislead consumers into believing the product consists predominantly of pomegranate and blueberry juice when it actually consisted mostly of apple and grape juice. Coca-Cola argued that the lawsuit was barred because its label complied with FDCA standards. The FDCA distinguishes between a product's label and ingredients. The Supreme Court, however, ruled that the false advertising claim could continue under the Lanham Act because "Congress did not intend FDA oversight to be the exclusive means of ensuring proper food and beverage labeling." The Court explained: "The FDCA's enforcement is largely committed to the FDA, while the Lanham Act empowers private parties to sue competitors to protect their interests on a case-by-case basis. Allowing Lanham Act suits takes advantage of synergies among multiple methods of regulation." The case will be remanded to trial court for a decision on the merits.