SAN FRANCISCO (Legal Newsline) - A federal appeals court ruled last week that federal regulations bar a juice company's pursuit of name and labeling claims against beverage heavyweight Coca-Cola.
Plaintiff Pom Wonderful LLC sued defendant Coca-Cola Company LLC over a pomegranate blueberry juice blend that Coca-Cola markets and sells under its Minute Maid brand.
Coca-Cola's "Pomegranate Blueberry," which hit shelves in 2007, contains about 99.4 percent apple and grape juices, 0.3 percent pomegranate juice, 0.2 percent blueberry juice and 0.1 percent raspberry juice.
In its suit against the beverage maker, Pom alleged it was losing sales to the new juice blend and that Coca-Cola was misleading consumers to believe that the drink consists primarily of pomegranate and blueberry juices when it actually consists mainly of apple and grape juices.
Pom produces, markets and sells bottled pomegranate juice and pomegranate juice blends, including its own pomegranate blueberry drink.
The company took issue with the name, labeling, marketing and advertising of the Coca-Cola drink.
In particular, it claimed that Coca-Cola violated the false advertising provision of the Lanham
Act, which authorizes lawsuits against those who use a false or misleading description or representation about any goods.
Pom also claimed that Coca-Cola violated California's Unfair Competition Law, or UCL, and its False Advertising Law, or FAL, which prohibit deceptive practices and misleading advertising.
The U.S. District Court for the Central District of California ruled that Pom's Lanham Act challenge to the drink's name and labeling was barred because its suit "may be construed as impermissibly challenging" Food and Drug Administration regulations permitting the name and labeling that Coca-Cola uses, because Pom's claim could improperly require the court to interpret and to apply FDA regulations on juice beverage labeling.
The court held that Pom's Lanham Act challenge could otherwise proceed. Specifically, it ruled that, although Pom could not challenge the drink'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.
In addition, the court held that the Food, Drug and Cosmetic Act 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 district court's ruling.
Coca-Cola moved to dismiss the amended complaint.
At this time, 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 which aspects constituted advertising or marketing.
Following discovery, the court partially granted summary judgment to Coca-Cola.
It reiterated that Pom's Lanham Act challenge to the drink's name and labeling was barred by the FDCA's implementing regulations, and eventually entered judgment for Coca-Cola.
The U.S. Court of Appeals for the Ninth Circuit said in its May 17 ruling that the district court was right to hold that Pom's Lanham Act claim against the drink's name is barred.
The same goes for Pom's labeling claim, the court said.
"In extensively regulating the labeling of foods and beverages, the FDCA and its implementing regulations have identified the words and statements that must or may be included on labeling and have specified how prominently and conspicuously those words and statements must appear," Judge Diarmuid F. O'Scannlain wrote for the Ninth Circuit.
However, in concluding that Pom's claims are barred, the court did not necessarily hold that Coca-Cola's label is non-deceptive.
But that isn't for it to decide, the Ninth Circuit said.
"If the FDA believes that more should be done to prevent deception, or that Coca-Cola's label misleads consumers, it can act. But, under our precedent, for a court to act when the FDA has not -- despite regulating extensively in this area -- would risk undercutting the FDA's expert judgments and authority," O'Scannlain wrote in the 14-page ruling.
As for Pom's state law claims, the Ninth Circuit vacated the district court's judgment and remanded the case for the court to rule on standing.
"If the district court concludes that Pom has statutory standing, it may need to address such issues as whether Pom's state law claims are expressly preempted and whether California's safe-harbor doctrine insulates Coca-Cola from liability on any of Pom's state law claims," O'Scannlain explained.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.