Today, the Supreme Court has ruled that Coca-Cola’s Minute Maid subsidiary is not permitted to use FDA regulations to shield it from a lawsuit by the makers of POM for unfair competition.
While Supreme Court decisions are always newsworthy, this decision is not settling some juicy debate within false-advertising and trademark law. Coca-Cola tried to blend together several different legal principles and squeeze out a result that protects them against a competitor’s claim that the Minute Maid name and label design will fool consumers.
The current Trademark Act is called the Lanham Act, after Congressman Fritz Lanham of Texas (1880-1965), who was credited with spearheading its passage in 1946. The law has increasingly recognized the rights of competitors to sue one another for advertising or labeling that deceives consumers. Where consumers are being deceived and unfairly diverted away from a competing product, their competitors may lose sales. If that happens, the Lanham Act provides companies with a federal claim.
Supreme Court of the United States (Photo credit: Phil Roeder)
Here is how Minute Maid’s Supreme Court brief described its “Pomegranate Blueberry” label: “Coca-Cola’s Minute Maid division markets a 100% juice product that contains about 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice… [The] front label is a “vignette” depicting half an Apple, half a pomegranate” and several other berries.
Relatively out of the blue, Coca-Cola came up with a clever defense to the lawsuit filed against it by POM Wonderful LLC. Coca-Cola told the District Court that its labeling complied with Food, Drug, and Cosmetic Act (FDCA) standards and it could not be sued based on a label that meets federal labeling guidelines. Is this similar to saying that a juice label does not violate the Clean Water Protection Act or Coastal Barriers Resources Act? That is, it may be true that the Minute Maid label does not violate one federal statute, but do compliance with one law mean that it can’t be violating another federal law, like the Lanham Act?
At the end of the day, this case was about rules of legal interpretation when more than one federal regulation exists. Coca-Cola’s legal arguments rely less on trademark law and more on laws like The Civil Service Reform Act or whether the Tax Lien Act of 1966 amended or repealed a 1797 statute.
It surprised many that the federal District Court accepted Coca-Cola’s defense, and surprised even more that the Ninth Circuit Court of Appeals did the same. By a unanimous 8-0 vote, the Justices hearing this case said that there was nothing to contradict the presumption that these two statutes were complementary and to be read in harmony. Nothing in the FDCA prevented any claim for false advertising, and nothing in the Lanham Act would stop such an approach, either.
The government also made its opinion known in this case. The government split its views. It sided with Coca-Cola in saying that the wording on this product label, which prominently calls this a pomegranate blueberry-flavored drink, should not be attacked, as it meets FDA requirements. So understand there is no major change in the law here. What has always been done will continue to be done. Perhaps no one was more surprised than Coca-Cola that its novel legal defense made its way all the way to the Supreme Court of the United States. Now starts the hard work, as this case will go back to a federal District Court to determine whether Minute Maid’s label and wording deceives consumers as to the contents or other characteristics of this product.
All the court really is saying is, “it must be observed that neither the Lanham Act nor the FDCA, in express terms, forbids or limits Lanham Act claims in challenging labels that are regulated by the FDCA.” But looking at this case as an important false-advertising case may be mixing apples and oranges.
This post originally appeared on Forbes