Argument preview: Justices to consider “truth-in-labeling” fruit juices
on Apr 15, 2014 at 12:29 pm
It has to be galling for the company famed for its longstanding “It’s the Real Thing” advertising campaign to stand in the Supreme Court offering technical defenses for an outrageously misleading product name, but there we have it. POM Wonderful v. Coca-Cola involves a Coca-Cola product bearing an emphatic “Pomegranate Blueberry” label, which consists of about 99% apple and grape juice, 0.3% pomegranate juice, and 0.2% blueberry juice. POM grows pomegranates and sells products that are predominantly pomegranate juice. It filed suit against Coca-Cola, contending that Coca-Cola’s labeling of the “Pomegranate Blueberry” product is so misleading that it violates the Lanham Act.
As it happens, the federal Food, Drug, and Cosmetic Act (“FDCA”) regulates many aspects of food sales and marketing, including product labels. Because the Food and Drug Administration (“FDA”) has not taken any action against Coca-Cola based on this label, Coca-Cola is in a position to argue that the FDCA regulatory scheme precludes POM’s suit under the Lanham Act, on the theory that the FDA has the exclusive authority to regulate food labels. A district court in California accepted Coca-Cola’s argument, and the Ninth Circuit affirmed. When POM sought Supreme Court review, the Court called for the views of the Solicitor General. The federal government responded that, although it did not agree with all aspects of the decision, it thought review unwarranted. The Court nevertheless granted certiorari.
Surprisingly, it is not at all clear what the proper standard is for considering a case in which two distinct federal statutes arguably conflict. The three principal briefs (from POM, the Solicitor General, and Coca-Cola) propose markedly different standards, and find support for them in existing case law. Thus, whatever comes of the case on the merits, the case is likely to shed light on that relatively undeveloped question.
Because the parties primarily disagree about the standard of interpretation, their arguments for the most part do not engage each other. POM’s argument (presented by Seth Waxman) could hardly be simpler: (1) Neither the Lanham Act nor the FDCA includes any explicit limitation on application of the Lanham Act to this controversy; (2) the Court should imply such a limitation only if the statutes are in irreconcilable conflict; and (3) the statutes are not in irreconcilable conflict because Coca-Cola easily can comply with both statutes.
The key point for POM is that the FDCA plainly does not require the packaging that Coca-Cola uses, and indeed the FDA has not approved (or, until this case reached the Supreme Court, even examined) the packaging in question. POM’s strongest point probably is the color picture of the packaging that it reproduces in its brief, which would lead any ordinary consumer to expect that the product is predominantly pomegranate and blueberry juice.
That is not to say that POM doesn’t also present strong legal arguments. Doctrinally, the Court’s recent decisions about pharmaceutical labels approved by the FDA provide powerful support for POM. In those cases, the FDA always has approved the specific label and with very limited exceptions barred any change in the label that it has approved. Still, in that context, the Court in Wyeth v. Levine permitted a state-law tort suit for the manufacturer’s failure to warn about dangers of the pharmaceutical. To be sure, the Court has barred suits against generic manufacturers in two decisions following up on Wyeth (PLIVA, Inc. v. Mensing and Mutual Pharmaceuticals v. Bartlett), but those decisions have been markedly divided; it seems most improbable that they would have forbidden the tort suits if the labels had not been all but mandated by the FDA.
The United States files a brief that technically supports neither party, but in practical effect seems to provide considerable benefit to POM. The United States argues that the Lanham Act claim is precluded only to the extent that the FDCA or FDA regulations specifically require or permit the packaging in question. The FDA has issued regulations about the name of the product, and the product seems to comply with those regulations. Specifically, the United States points to the full name of the product as “Pomegranate Blueberry Flavored Blend of 5 Juices”; although the last five words are considerably smaller (barely legible to my aged eyes in the image that appears in POM’s brief), they are technically presented as part of the name on the package. The Solicitor General explains that the description of this as a pomegranate blueberry “flavored” blend complies with applicable regulations. In its view, POM’s complaint about the name is thus preempted.
But Pom also challenges other aspects of the packaging — the way in which the label minimizes the “flavored blend” part of the name, the emphasis on pomegranates and blueberries in the image on the bottle, and the artificial coloring that makes the product resemble pomegranate juice. As to those claims, the Solicitor General says that the Lanham Act claim is not precluded. The Solicitor General here emphasizes a preemption provision of the FDCA, adopted as part of the 1990 amendments to the FDCA in the Nutrition and Labeling Education Act (the “NLEA”). The NLEA preemption provision bars state-law challenges to food and drug labels, but the Solicitor General argues that this provides no reason to prevent a challenge to those labels under federal law. Strangely, although the government scoffs at the use of that provision to preempt these non-label claims, it relies on it directly as the basis for explaining away the plain implications of Wyeth v. Levine. The logical link between those two uses of the preemption provision is obscure, to say the least.
Kathleen Sullivan has undertaken the somewhat delicate role of defending Coca-Cola’s right to market such a misleading product, and she delivers a powerful argument. In Coca-Cola’s view, because the FDCA is later and more specific than the Lanham Act, there is no presumption at all of Lanham Act application. Rather, Coca-Cola argues, the Court should reconcile the statutes using ordinary tools of statutory construction. Applying those tools, Coca-Cola argues (not surprisingly) that Congress’s preemption of duplicative state-law actions in the NLEA implies that Congress would not want interference from the Lanham Act.
Coca-Cola also points out the detailed regulations that the FDA has issued regarding labels. Buttressed by the Solicitor General’s support on the point, the company can argue forcefully that the label in question in fact does satisfy those regulations. Its answer with regard to the other claims is a bit harder to assess, as it contends that those issues are not properly before the Court because they were neither presented to nor decided by the court of appeals.
I should also mention a powerful amicus brief from Paul Clement, writing on behalf of the ABA – in this case neither the American Bar Association nor the American Bankers Association, but instead the American Beverage Association. He provides a useful (indeed fascinating) discussion of the importance of flexibility with respect to the design and marketing of multiple-juice beverages, which do raise issues much more complicated than the lay observer would think just from looking at the label.
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My guess after reading all of this is that Coca-Cola will face an uphill battle defending this decision before the Justices. Setting to the side the problem that no Justice has yet this year cast a vote in favor of the Ninth Circuit (see current Stat Pack), for me the most telling reality check comes from Wyeth v. Levine. If the Justices thought the FDA’s label requirements for pharmaceuticals (which involve specific approval of the precise label to be used) preempted actions for “failure to warn,” I’m assuming that at least the Wyeth majority will start here dubious about preemption of the Lanham Act claim.
Sullivan strangely doesn’t try to take on Wyeth directly, instead disposing of it in a single footnote that points to the preemption clause of the NLEA. But to me that clause helps very little. Why should we expect the Justices to assume that a clause explicitly preempting state law should carry with it implied preemption of federal law. Doesn’t the attention to preemption, coupled by a decision to preempt State but not federal law, suggest the contrary, or at most suggest nothing at all?
I also think two atmospheric issues are likely to pose hurdles for Coca-Cola’s efforts to persuade the Justices. One is the simple fact that the labeling of the product seems intentionally (if not flagrantly) deceptive. Surely Coca-Cola would have had a better chance with almost any label other than this one. The second is the recent decision in Lexmark International v. Static Control Components (analyzed here). Although the issues obviously are distinct, the Justices just spent some time considering the Lanham Act in detail and unanimously settled on an opinion broadly interpreting the coverage and purposes of the statute. The attitudes formed by that process seem quite likely to interfere with the Justices’ consideration of Coca-Cola’s position.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel to POM Wonderful in this case. However, the author of this post is not affiliated with the firm.]