POM Wonderful LLC v. Coca–Cola Co.

• Decision Date: 17 May 2012
• Docket Number: No. 10–55861.,10–55861.
• Citation: 2012 Daily Journal D.A.R. 6434,679 F.3d 1170,102 U.S.P.Q.2d 1781,12 Cal. Daily Op. Serv. 5345,2012 Trade Cases P 77892
• Parties: POM WONDERFUL LLC, a Delaware limited liability company, Plaintiff–Appellant, v. The COCA–COLA COMPANY, a Delaware corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

679 F.3d 1170

2012-1 Trade Cases P 77,892

102 U.S.P.Q.2d 1781

12 Cal. Daily Op. Serv. 5345

2012 Daily Journal D.A.R. 6434

POM WONDERFUL LLC, a Delaware limited liability company, Plaintiff–Appellant,

v.The COCA–COLA COMPANY, a Delaware corporation, Defendant–Appellee.

No. 10–55861.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 8, 2012.

Filed May 17, 2012.

Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., argued the cause and filed the briefs for the plaintiff-appellant. With him on the briefs were Randolph D. Moss, Brian M. Boynton, Felicia H. Ellsworth, and Madhu Chugh, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C.; Craig B. Cooper, Daniel S. Silverman, and Daniel A. Beck, Roll Law Group P.C., Los Angeles, CA; and Andrew S. Clare, Loeb & Loeb LLP, Los Angeles, CA.

Steven A. Zalesin, Patterson Belknap Webb & Tyler LLP, New York, NY, argued the cause and filed the brief for the defendant-appellee. With him on the brief were Sarah E. Zgliniec, Travis J. Tu, and YiLing Chen–Josephson, Patterson Belknap Webb & Tyler LLP, New York, NY.

Appeal from the United States District Court for the Central District of California, S. James Otero, District Judge, Presiding. D.C. No. 2:08–cv–06237–SJO–FMO.

Before: D.W. NELSON, DIARMUID F. O'SCANNLAIN, and N. RANDY SMITH, Circuit Judges.

OPINION

O'SCANNLAIN, Circuit Judge:

We must decide whether the Food, Drug, and Cosmetic Act bars a Lanham Act claim alleging that the name and labeling of a juice beverage are deceptive.

I

Pom Wonderful LLC produces, markets, and sells bottled pomegranate juice and pomegranate juice blends, including a pomegranate blueberry juice blend. The Coca–Cola Company markets and sells bottled juices and juice blends under the Minute Maid brand. In September 2007, Coca–Cola announced a new product called “Pomegranate Blueberry” or “Pomegranate Blueberry Flavored Blend of 5 Juices.” (The parties dispute the name. We at times refer to Coca–Cola's product as “Pomegranate Blueberry” but take no view on whether this is its actual name.) This product contains about 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice. The front label displays the product's name and a vignette depicting each of those fruits:

Image 1 (2.73" X 6.67") Available for Offline Print Believing that it was losing sales to Pomegranate Blueberry, Pom sued Coca–Cola in September 2008. Pom alleged that Coca–Cola misled consumers to believe that Pomegranate Blueberry consists primarily of pomegranate and blueberry juices when it actually consists mainly of (the cheaper) apple and grape juices. Pom challenged the name, labeling, marketing, and advertising of Pomegranate Blueberry. It claimed that Coca–Cola violated the false-advertising provision of the Lanham Act, which authorizes suit against those who use a false or misleading description or representation about any goods. See15 U.S.C. § 1125(a). Pom also claimed that Coca–Cola violated California's Unfair Competition Law (UCL) and its False Advertising Law (FAL), which prohibit deceptive practices and misleading advertising. See Cal. Bus. & Prof'l Code § 17200 et seq.; id. § 17500 et seq.

Coca–Cola moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint for failure to state a claim. The district court partially granted and partially denied the motion. The court ruled that Pom's Lanham Act challenge to Pomegranate Blueberry's name and labeling was barred because Pom's suit “may be construed as impermissibly challenging” Food and Drug Administration (FDA) regulations permitting the name and labeling that Coca–Cola uses and because Pom's claim could improperly require the court to interpret and to apply FDA regulations on juice beverage labeling. But the court also held that Pom's Lanham Act challenge could otherwise proceed. Specifically, the court ruled that, although Pom could not challenge Pomegranate Blueberry's name and labeling, it could challenge Coca–Cola's other advertising and marketing of the product because those components of the claim would not require the court to interpret FDA regulations. The court also held that the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., expressly preempted Pom's state law claims to the extent the UCL and FAL impose obligations that are not identical to those imposed by the FDCA and its implementing regulations.

After Coca–Cola refused to respond to discovery requests, Pom amended its complaint to bring itself within the scope of the court's earlier ruling on its Lanham Act claim. The amended complaint repleaded Pom's Lanham Act, UCL, and FAL claims. In an apparent effort to overcome the court's preemption ruling, Pom added to its UCL claim a misbranding allegation under California's Sherman Law, which includes language that is materially identical to the FDCA's misbranding provision. SeeCal. Health & Safety Code § 110660; compare id. with21 U.S.C. § 343(a)(1).

Coca–Cola moved under Rule 12(b)(6) to dismiss the amended complaint. The court denied Coca–Cola's motion and ruled that Pom could conduct discovery to clarify which aspects of Coca–Cola's alleged conduct constituted labeling (and thus could not, under the court's earlier ruling, support Pom's Lanham Act claim) and which aspects constituted advertising or marketing (and thus could support the Lanham Act claim). The court did not address preemption. Discovery followed.

When discovery was completed, the district court partially granted summary judgment to Coca–Cola. The court reiterated that Pom's Lanham Act challenge to Pomegranate Blueberry's name and labeling was barred by the FDCA's implementing regulations. The court reasoned that through its regulations, the FDA “has directly spoken on the issues that form the basis of Pom's Lanham Act claim against the naming and labeling of the Juice, and has therefore[ ] reached a conclusion as to what is permissible.” The court emphasized that the FDA “has concluded that manufacturers of multiple-juice beverages may identify their beverages with a non-primary, characteristic juice, as Coca[-]Cola does here.” Because in its view Coca–Cola's label “sufficiently comports with the requirements of” FDA juice-labeling regulations—and because it believed that any further “determination that naming and labeling must be displayed in a particular way or fashion” must be made by the FDA—the court held that Pom's claim challenging the name and labeling of Pomegranate Blueberry was barred. The court reached a similar conclusion specifically about the label's fruit vignette.

The court did not revisit its earlier preemption ruling. It simply ruled that Pom lacked statutory standing to pursue its state law claims. The court reasoned that Pom had not established the statutory standing prerequisite of “lost money or property,” Cal. Bus. & Prof'l Code §§ 17204, 17535, because Pom had not shown that it was entitled to restitution.

The court concluded that triable issues remained on the non-naming-and-labeling aspects of Pom's Lanham Act claim and permitted Pom to proceed to trial on those matters. But Pom conceded that the summary judgment order prevented it from carrying its burden on the claim and the court therefore entered judgment for Coca–Cola. Pom timely appealed.

II

On appeal, Pom contends that the district court erred in its holdings that the FDCA bars its Lanham Act claim, that Pom lacks statutory standing to pursue its state law claims, and that the FDCA expressly preempts Pom's state law claims against the name and labeling of Coca–Cola's Pomegranate Blueberry.

A

The Lanham Act broadly prohibits false advertising. It authorizes suit against those who use a false or misleading description or representation “in connection with any goods.” 15 U.S.C. § 1125(a). Such suits can be brought by any person “who believes that he or she is or is likely to be damaged by” the use of that false description or representation. Id.

The FDCA, meanwhile, comprehensively regulates food and beverage labeling. It provides that a food is misbranded if “its labeling is false or misleading in any particular,” 21 U.S.C. § 343(a)(1), or “[i]f any word, statement, or other information required by” the FDCA or its regulations “to appear on the label or labeling is not prominently placed thereon with such conspicuousness ... and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use,” id. § 343(f). Though a private plaintiff may sue under the Lanham Act's false-advertising provision, the FDCA may be enforced only by the FDA or the Department of Justice. See id. § 337(a). The FDA, for its part, has promulgated regulations that address how a manufacturer may name and label its juice beverages. See, e.g.,21 C.F.R. § 102.33(c), (d).

As sometimes happens with two broad federal statutes, the Lanham Act and the FDCA can conflict with each other. When faced with a potential conflict, “[c]ourts try to give as much effect to both statutes as possible.” Schering–Plough Healthcare Prods., Inc. v. Schwarz Pharma, Inc., 586 F.3d 500, 508 (7th Cir.2009). In that effort, courts have focused on Congress's decision to entrust to the FDA the task of interpreting and enforcing the FDCA.

In light of that focus, courts have agreed that the FDCA limits claims under the Lanham Act. A plaintiff may not, for example, sue under the Lanham Act to enforce the FDCA or its regulationsbecause allowing such a suit would undermine Congress's decision to limit enforcement of the FDCA to the federal government. See, e.g., Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1139 (4th Cir.1993). Nor may a plaintiff maintain a Lanham Act claim that would require a court originally to interpret ambiguous FDA regulations, because rendering such an interpretation would usurp the FDA's interpretive authority. See, e.g., Sandoz Pharms. Corp. v....