Supreme Court Holds That Lanham Act False Advertising Claims Are Not Preempted By FDCA

Earlier today, the U.S. Supreme Court unanimously held that a Lanham Act false advertising case may be brought even if Food and Drug Administration (FDA) beverage labeling regulations permit use of the challenged claim. Reversing the Ninth Circuit, the Court held in POM Wonderful LLC v. The Coca-Cola Company, that the Lanham Act does not expressly defer to the Food, Drug and Cosmetic Act ("FDCA") and found no statutory or case law basis for doing so. The decision means that food and beverage producers cannot assume that compliance with FDA labeling regulations create a safe harbor immunizing them from private false advertising claims.

In the underlying case, POM Wonderful had accused Coca-Cola of false or deceptive advertising under Section 43(a) of the Lanham Act in naming and labeling a pomegranate juice blend. The District Court dismissed the Section 43(a) claim because regulations under the FDCA address the labeling of juice blend products, and do not prohibit (and in some cases expressly permit) the Coca-Cola labeling. It therefore held that any challenge under the Lanham Act was precluded. Pom Wonderful LLC v. The Coca-Cola Company, 727 F.Supp.2d 849, 871-873 (C.D. Cal. 2010). The Ninth Circuit affirmed, 679 F.3d 1170, 1178 (2012), holding that Congress had decided to "entrust matters of juice beverage labeling to the FDA," that the FDA had promulgated "comprehensive regulation" on the subject, and that it had apparently decided not to impose the requirements sought by POM. Therefore, permitting a challenge to Coca-Cola's labeling would risk "undercutting the FDA's expert judgments and authority."

The Supreme Court began its analysis by refuting the notion that this is a preemption case. The Court said that preemption is a question of whether state law is preempted by federal law or regulation. Here, the question is the interpretation of two coequal, "complementary" federal statutes, each with a different scope and purpose. "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." The two statutes have coexisted for over 70 years, and neither contains any express preclusion of Lanham Act actions involving labels regulated by the FDA. Therefore, "it would show disregard for the congressional design to hold that Congress nonetheless intended one federal statute to preclude the operation of the other."

The Court...