AHPA Update: Supreme Court rules Coca-Cola product name challenge can proceed even if lawful under FDA regulations

AHPA Updates

AHPA Update: Supreme Court rules Coca-Cola product name challenge can proceed even if lawful under FDA regulations

Published: Friday, June 13, 2014

Supreme Court rules Coca-Cola product name challenge can proceed even if lawful under FDA regulations 

Today the Supreme Court issued its decision in the "POM v. Coke" case.  The Court's holding will likely increase the importance of private litigation as a means of "regulating" or challenging claims for many dietary supplements, foods, OTC drugs, cosmetics and medical devices.
 
In this Lanham Act (unfair competition) lawsuit, POM challenged the label of Coke's Minute Maid juice that bore the name "Pomegranate Blueberry flavored blend of 5 juices."  POM argued that the name and other aspects of the label were misleading because the product contained only 0.3% Pomegranate juice and 0.2% blueberry juice.  Coke argued that the name complied with FDA regulations promulgated under the Federal Food, Drug, and Cosmetic Act (FDCA), and therefore a Lanham Act lawsuit was precluded.
 
The Court emphatically supported POM's position in a unanimous decision (Justice Breyer did not participate).
 
The Court held that the Lanham Act and the FDCA do not preclude each other but "complement each other."  "Although both statutes touch on food and beverage labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety."  Thus, the two can co-exist comfortably.
 
In particular, the Court said that some variability in rules between the Lanham Act and the FDCA is acceptable:  "Although the application of ... the Lanham Act by judges and juries in courts throughout the country may give rise to some variation in outcome, this is the means Congress chose to enforce a national policy to ensure fair competition."
 
Importantly, the Court also rejected the government's amicus position in the case.  The government had argued that a Lanham Act lawsuit should be precluded to the extent that FDA regulations specifically authorize the challenged aspects of the label - so the Minute Maid product name could not be challenged, but other aspects of the label could.  The Court said no, FDA regulations do not alter Lanham Act rights.  "An agency may not reorder federal statutory rights without congressional authorization."
 
It seems obvious that this decision will encourage Lanham Act lawsuits against FDA-regulated products.  This could work to the benefit of a company to the extent that it may wish to challenge competitors.  Of course, this does not make such lawsuits any more palatable in terms of their troublesomeness or expense.
 
Will this decision weaken the argument that consumer class-action lawsuits brought under state law are preempted by FDA regulations?  Probably so.  Although the Court is careful to note that this is not a preemption case, its analysis clearly favors a narrow reading of the FDCA's preemption provisions and clearly encourages the coexistence of different legal rules governing FDA-regulated products.  The Court said, "The centralization of FDCA enforcement authority in the Federal Government does not indicate that Congress intended to foreclose private enforcement of other federal statutes" - and the same could be said of state statutes.
 
By Daniel R. Dwyer
Kleinfeld, Kaplan and Becker, LLP
AHPA General Counsel 
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