Last week, the Supreme Court decided that POM Wonderful™, maker of pomegranate juice, could sue Coca-Cola Company, maker of a blended juice product that included pomegranate and blueberry juices, under the Lanham Act for unfair competition arising from false or misleading information on the Coca-Cola label.  However, the Coca-Cola juice label is regulated by FDA, and so Coca-Cola argued that a suit under the Lanham Act is therefore precluded.
The Court didn't buy it, noting:
- Neither the Lanham Act nor the Food, Drug, and Cosmetic Act (FDCA) expressly forbid or limited Lanham Act claims challenging labels regulated by FDCA.
- The Lanham Act and FDCA have co-existed since 1946, giving Congress ample time to expressly limit Lanham Act claims if it wanted to.
- The relevant pre-emption provisions of FDCA apply to state laws, not other federal laws.
- The Lanham Act protects commercial interests against unfair competition, while FDCA protects public health and safety.
- FDA does not preapprove food and beverage labels, so if Lanham Act claims were to be precluded, "the commercial interests — and indirectly the public at large — could be left with less effective protection in the food and beverage realm than in many other, less regulated industries."
The Court didn't discuss whether the Coca-Cola label actually complied with FDA regulations. The gist of the decision is that the fact that the label is regulated by FDA does not preclude a Lanham Act claim. So a food or beverage label could comply with all FDA regulations and still be subject to an unfair competition claim under the Lanham Act.
What does this suggest for the possibility of a Lanham Act claim alleging unfair competition-based information on a drug or device label that has been reviewed and approved or cleared by FDA? We think it doesn't suggest much.
Throughout this case, the Court consistently referred to "food and beverage labeling" regulated by FDA. This might be a signal that the Court does not intend its analysis to apply to Lanham Act claims about drug or device labels.
Moreover, a significant justification for permitting Lanham Act cases in the food and beverage realm is not present in the drug and device realm. FDA's focus is not to protect the commercial interests of drug and device manufacturers. However, FDA's premarket review of prescription drug and device labels, and its requirements for carefully worded indications, and label information about risks, side effects, warnings and precautions may have the consequence of diminishing unfair competition through false or misleading labels. In the prescription drug and device realm, precluding Lanham Act claims may not leave commercial interests, and indirectly the public at large, with less effective protection than in other less regulated industries.
Of course, there have been Lanham Act cases against false or misleading drug promotional labeling and advertising for many years. But based on our reading of this case, we don't expect to see Lanham Act cases based on prescription drug or device labels that comply with FDA regulations.
1 The Coca-Cola product was comprised mostly of apple and grape juices, and contained very small amounts of blueberry and pomegranate juices. (The Supreme Court said the amounts of blueberry and pomegranate juices were "minuscule.") The front label displayed the words "pomegranate blueberry" in all capital letters on two separate lines. Below those words, in much smaller type, the label said "flavored blend of 5 juices." Below that, in even smaller type were the words: "from concentrate with added ingredients" and "and other natural flavors."
2 The Court clarified that this is a preclusion case and not a pre-emption case. In a pre-emption case, the issue is whether a state law is pre-empted by a federal statute. In this case, two federal statutes are at issue, so the "state–federal balance does not frame the inquiry." The Court characterized this case as a matter of statutory interpretation.