POM Wonderful LLC v. Coca-Cola Co.

• Decision Date: 12 June 2014
• Docket Number: No. 12–761.,12–761.
• Parties: POM WONDERFUL LLC, Petitioner v. The COCA–COLA COMPANY.
• Court: U.S. Supreme Court

573 U.S. 102

134 S.Ct. 2228

189 L.Ed.2d 141

POM WONDERFUL LLC, Petitioner

v.The COCA–COLA COMPANY.

No. 12–761.

Supreme Court of the United States

Argued April 21, 2014.

Decided June 12, 2014.

Seth P. Waxman, Washington, DC, for Petitioner.

Melissa Arbus Sherry, for the United States as amicus curiae, by special leave of the Court, supporting neither party.

Kathleen M. Sullivan, New York, NY, for Respondent.

Craig B. Cooper, Roll Law Group P.C., Andrew S. Clare, Loeb & Loeb LLP, Los Angeles, CA, Seth P. Waxman, Counsel of Record, Randolph D. Moss, Brian M. Boynton, Felicia H. Ellsworth, Francesco Valentini, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Petitioner.

Steven A. Zalesin, Sarah E. Zgliniec, Travis J. Tu, Patterson Belknap Webb & Tyler, LLP, Kathleen M. Sullivan, Counsel of Record, Faith E. Gay, Sanford I. Weisburst, Todd Anten, Yelena Konanova, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, for Respondent.

Justice KENNEDY delivered the opinion of the Court.

POM Wonderful LLC makes and sells pomegranate juice products, including a pomegranate-blueberry juice blend. App. 23a. One of POM's competitors is the Coca–Cola Company. Coca–Cola's Minute Maid Division makes a juice blend sold with a label that, in describing the contents, displays the words "pomegranate blueberry" with far more prominence than other words on the label that show the juice to be a blend of five juices. In truth, the Coca–Cola product contains but 0.3% pomegranate juice and 0.2% blueberry juice.

Alleging that the use of that label is deceptive and misleading, POM sued Coca–Cola under § 43 of the Lanham Act. 60 Stat. 441, as amended, 15 U.S.C. § 1125. That provision allows one competitor to sue another if it alleges unfair competition arising from false or misleading product descriptions. The Court of Appeals for the Ninth Circuit held that, in the realm of labeling for food and beverages, a Lanham Act claim like POM's is precluded by a second federal statute. The second statute is the Federal Food, Drug, and Cosmetic Act (FDCA), which forbids the misbranding of food, including by means of false or misleading labeling. §§ 301, 403, 52 Stat. 1042, 1047, as amended, 21 U.S.C. §§ 331, 343.

The ruling that POM's Lanham Act cause of action is precluded by the FDCA was incorrect. There is no statutory text or established interpretive principle to support the contention that the FDCA precludes Lanham Act suits like the one brought by POM in this case. Nothing in the text, history, or structure of the FDCA or the Lanham Act shows the congressional purpose or design to forbid these suits. Quite to the contrary, the FDCA and the Lanham Act complement each other in the federal regulation of misleading food and beverage labels. Competitors, in their own interest, may bring Lanham Act claims like POM's that challenge food and beverage labels that are regulated by the FDCA.

I

A

This case concerns the intersection and complementarity of these two federal laws. A proper beginning point is a description of the statutes.

Congress enacted the Lanham Act nearly seven decades ago. See 60 Stat. 427 (1946). As the Court explained earlier this Term, it "requires no guesswork" to ascertain Congress' intent regarding this federal law, for Congress included a "detailed statement of the statute's purposes."

Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. ––––, ––––, 134 S.Ct. 1377, 1389, 188 L.Ed.2d 392 (2014). Section 45 of the Lanham Act provides:

"The intent of this chapter is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations." 15 U.S.C. § 1127.

The Lanham Act's trademark provisions are the primary means of achieving these ends. But the Act also creates a federal remedy "that goes beyond trademark protection." Dastar Corp. v. Twentieth Century Fox Film Corp ., 539 U.S. 23, 29, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003). The broader remedy is at issue here.

The Lanham Act creates a cause of action for unfair competition through misleading advertising or labeling. Though in the end consumers also benefit from the Act's proper enforcement, the cause of action is for competitors, not consumers.

The term "competitor" is used in this opinion to indicate all those within the class of persons and entities protected by the Lanham Act. Competitors are within the class that may invoke the Lanham Act because they may suffer "an injury to a commercial interest in sales or business reputation proximately caused by [a] defendant's misrepresentations." Lexmark, supra, at ––––, 134 S.Ct., at 1395. The petitioner here asserts injury as a competitor.

The cause of action the Act creates imposes civil liability on any person who "uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which ... misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities." 15 U.S.C. § 1125(a)(1). As the Court held this Term, the private remedy may be invoked only by those who "allege an injury to a commercial interest in reputation or sales. A consumer who is hoodwinked into purchasing a disappointing product may well have an injury-in-fact cognizable under Article III, but he cannot invoke the protection of the Lanham Act." Lexmark, 572 U.S., at ––––, 134 S.Ct., at 1390. This principle reflects the Lanham Act's purpose of " ‘protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.’ " Id., at ––––, 134 S.Ct., at 1389. POM's cause of action would be straightforward enough but for Coca–Cola's contention that a separate federal statutory regime, the FDCA, allows it to use the label in question and in fact precludes the Lanham Act claim.

So the FDCA is the second statute to be discussed. The FDCA statutory regime is designed primarily to protect the health and safety of the public at large. See 62 Cases of Jam v. United States, 340 U.S. 593, 596, 71 S.Ct. 515, 95 L.Ed. 566 (1951) ; FDCA, § 401, 52 Stat. 1046, 21 U.S.C. § 341 (agency may issue certain regulations to "promote honesty and fair dealing in the interest of consumers"). The FDCA prohibits the misbranding of food and drink. 21 U.S.C. §§ 321(f), 331. A food or drink is deemed misbranded if, inter alia, "its labeling is false or misleading," § 343(a), information required to appear on its label "is not prominently placed thereon," § 343(f), or a label does not bear "the common or usual name of the food, if any there be," § 343(i). To implement these provisions, the Food and Drug Administration (FDA) promulgated regulations regarding food and beverage labeling, including the labeling of mixes of different types of juice into one juice blend. See 21 C.F.R. § 102.33 (2013). One provision of those regulations is particularly relevant to this case: If a juice blend does not name all the juices it contains and mentions only juices that are not predominant in the blend, then it must either declare the percentage content of the named juice or "[i]ndicate that the named juice is present as a flavor or flavoring," e.g., "raspberry and cranberry flavored juice drink." § 102.33(d). The Government represents that the FDA does not preapprove juice labels under these regulations. See Brief for United States as Amicus Curiae in Opposition 16. That contrasts with the FDA's regulation of other types of labels, such as drug labels, see 21 U.S.C. § 355(d), and is consistent with the less extensive role the FDA plays in the regulation of food than in the regulation of drugs.

Unlike the Lanham Act, which relies in substantial part for its enforcement on private suits brought by injured competitors, the FDCA and its regulations provide the United States with nearly exclusive enforcement authority, including the authority to seek criminal sanctions in some circumstances. 21 U.S.C. §§ 333(a), 337. Private parties may not bring enforcement suits. § 337. Also unlike the Lanham Act, the FDCA contains a provision pre-empting certain state laws on misbranding. That provision, which Congress added to the FDCA in the Nutrition Labeling and Education Act of 1990, § 6, 104 Stat. 2362–2364, forecloses a "State or political subdivision of a State" from establishing requirements that are of the type but "not identical to" the requirements in some of the misbranding provisions of the FDCA. 21 U.S.C. § 343–1(a). It does not address, or refer to, other federal statutes or the preclusion thereof.

B

POM Wonderful LLC is a grower of pomegranates and a distributor of pomegranate juices. Through its POM Wonderful brand, POM produces, markets, and sells a variety of pomegranate products, including a pomegranate-blueberry juice blend. App. 23a.

POM competes in the pomegranate-blueberry juice market with the Coca–Cola Company. Coca–Cola, under its Minute Maid brand, created a juice blend containing 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice. Id., at 38a; Brief for Respondent 8. Despite the minuscule amount of pomegranate and blueberry juices in the blend, the front label of the Coca–Cola product displays the words "pomegranate blueberry" in all capital letters, on two separate lines. App. 38a. Below those words, Coca–Cola placed the...