Dispute creates new legal ground

By Kimberly Atkins
The Daily Record Newswire
 
WASHINGTON, DC — During recent oral arguments, the justices of the U.S. Supreme Court seemed disinclined to hold that a Lanham Act claim of false representation against beverage giant Coca-Cola was preempted under the Food, Drug and Cosmetic Act.

The case POM Wonderful LLC v. Coca-Cola Co., 12-761, stems from a product released by Coca-Cola called Minute Maid Pomegranate Blueberry drink.

POM Wonderful, which produces a pomegranate juice beverage that came out at the height of a health craze involving the fruit’s high antioxidant properties, sued Coca-Cola over its drink, alleging a number of claims including violation of §43(a) of the Lanham Act.

POM Wonderful claimed that the Coca-Cola product’s label was misleading because it prominently features the words “pomegranate” and “blueberry” as well as pictures of the fruits on its labeling, even though it contained only 0.3 percent pomegranate juice and 0.2 percent blueberry juice.

More than 99 percent of the Coca-Cola product is comprised of apple and grape juice, amounting to a misrepresentation that, POM Wonderful alleged, hurt its market share.

Coca-Cola moved to dismiss, arguing that the claim was preempted because its label complied with regulations under the FDCA.

Because the Food and Drug Administration sets the standards for the content that labels must include, claims involving product labeling under the Lanham Act conflict and are therefore barred.

The 9th U.S. Circuit Court of Appeals agreed, holding that the FDA, not Lanham Act plaintiffs, bears responsibility for policing allegedly misleading food product labeling.

The Supreme Court granted POM Wonderful’s petition for certiorari.

POM Wonderful’s attorney Seth P. Waxman, a partner in the Washington office of WilmerHale, relied heavily on the court’s 2009 ruling in Wyeth v. Levine that state law failure-to-warn claims against brand-name drug makers are not automatically preempted by FDA regulations governing the contents of such labels.

“As this court explained in Wyeth, misbranding provisions are, in fact, adjudicated by courts,” Waxman said. “[U]nder this Court’s decision in Wyeth, the FDCA and the FDA’s regulations interpreting it and applying it, supply a floor and not a ceiling” of labeling standards.

“Assuming you have a Lanham Act claim, what should Coke have done to make its product non-misleading?” asked Justice Ruth Bader Ginsburg.

“The injunction that we would seek is ceasing to use the label as it currently exists,” Waxman said.

“Without saying what is lawful?” Ginsburg pressed.

“That’s correct,” Waxman said.

Melissa Arbus Sherry, assistant to the U.S. solicitor general argued as amicus on behalf of neither party. She took the position that the FDA must be the ultimate authority for interpreting food label standards “under the misbranding provisions of the FDCA.”

“The purpose of [the FDA regulations] is to have some form of standardization so that when a consumer goes to a marketplace to purchase a particular product, it knows what is going to be in the product,” Sherry said.

Kathleen M. Sullivan, a partner in the New York office of Quinn Emanuel Urquhart & Sullivan, argued on Coca-Cola’s behalf that claims of misleading labeling fall squarely within the FDA’s purview.

“The FDCA does not deal just with health,” Sullivan argued. “[I]t also ‘promotes honesty and fair dealing in the interest of consumers.’”

But Kennedy wondered if that regulation was sufficient.

“If the [FDCA] works in the way you say it does, and Coca?Cola stands behind this label as being fair to consumers, then I think you have a very difficult case to make,” Kennedy said. “I think it’s relevant for us to ask whether people are cheated in buying this product.”

Sullivan said that “POM [can’t] say it’s misbranded under the Lanham Act, even where Coca?Cola has complied with all of the authorizations set forth in the FDCA.”

“You want us to write an opinion that says … no matter how misleading or how deceptive a label it is, if it passes the FDA, there can be no liability?” Kennedy asked. “That’s what you want us to say?”

Sullivan said that “misleading” by law ought to be “defined by the FDA in specific regulations pursuant to” the FDCA.

She noted that the Coca-Cola product is labeled as pomegranate “flavored.”

“We don’t think that consumers are quite as unintelligent as POM must think they are,” Sullivan said.

Justice Stephen G. Breyer took did not take part in the oral arguments.

No reason was given by the court, but justices generally recuse themselves from cases involving companies in which they hold stock.

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