The court relied heavily on its 2010 PhotoMedexopinion in which it held that a Lanham Act claim cannot challenge an advertisement stating that a medical device is “FDA-approved” if the FDA has decided not to enforce its clearance rules against a medical device.
In this case, the court declined to hold that it was non-deceptive to label in prominent letters that a product is “Pomegranate Blueberry flavored blend” when in fact those fruits account for just 0.5 percent of the product. Rather, the court said that the FDA's apparent decision to not take action on the product indicates that the labeling must comply with existing regulations. Thus, the court said that Lanham Act claims brought by a manufacturer of a competitive beverage were barred. However, the court remanded the case and instructed the district court to determine whether the plaintiff had standing to assert claims under California's unfair competition law.
In 2007, Coca-Cola Co. announced its intentions to sell a new pomegranate blueberry product under its Minute Maid brand. The product is called either “Pomegranate Blueberry” or “Pomegranate Blueberry Blend of 5 Juices.”
Coca-Cola's product contains 0.3 percent pomegranate juice, 0.2 percent blueberry juice, and 0.1 percent raspberry juice, and the remaining 99.4 percent of the juice is derived from apples and grapes.
Pom determined that Coca-Cola's new product was harming sales of its own products, and thus it filed a lawsuit alleging that Coca-Cola's label was misleading in that it suggests that the drink is primarily comprised of pomegranate and blueberry juice.
The lawsuit asserted false advertising claims under the Lanham Act, 15 U.S.C. § 1125(a), as well as claims under California's Unfair Competition Law and False Advertising Law.
Coca-Cola filed a Rule 12(b)(6) motion to dismiss claiming that the lawsuit was impermissibly trying to challenge FDA regulations relating to food and beverage labeling. The district court partially granted the motion, barring all actions that would require the court to interpret FDA regulations. The court also held that the Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq., preempted the state law claims to the extent that the state law claims imposed additional obligations to the FDCA.
Pom then filed an amended complaint in which it tried to avoid the court's earlier preemption ruling. The amended complaint added a misbranding allegation to the state law unfair competition claim that was identical to the FDCA's misbranding provision.
Coca-Cola again moved to dismiss under Rule 12(b)(6). This time the court denied the motion and allowed discovery to proceed in order to clarify what alleged conduct constituted labeling--and thus were barred--and what alleged conduct constituted advertising or marketing.
After discovery, the court partially granted Coca-Cola summary judgment. The court reiterated that Pom's Lanham Act challenge to the beverage's label was barred by the FDCA's implementing regulations. FDA regulations permit a juice manufacturer to identify its beverage with a non-primary ingredient, and thus Coca-Cola comported with the relevant regulations, the court said. As a result, the district court held that Pom could not challenge the name or the labeling of the beverage.
The district court then determined that Pom lacked standing to assert its state law claims because it could not demonstrate that it was entitled to restitution, a requirement that the district court deemed necessary under the relevant California statute.
The district court determined that Pom's action could proceed to the extent that it did not challenge the product's name or label. Pom, however, conceded that the summary judgment order made it impossible to carry its burden, and the district court thus entered judgment for Coca-Cola.
The court noted that other decisions dealing with the interplay between the Lanham Act and the FDCA have established that a plaintiff cannot bring a Lanham Act action to enforce the FDCA or its regulations, citing Mylan Laboratories Inc. v. Matkari, 7 F.3d 1130, 28 USPQ2d 1533 (4th Cir. 1993) (46 PTCJ 564, 10/28/93). Nor can a plaintiff bring a Lanham Act claim that requires a court to originally interpret an ambiguous FDA regulation, the court said, citing Sandoz Pharmaceutical Corp. v. Richardson-Vicks Inc., 902 F.2d 222, (3d Cir. 1990). These interpretations are based on Congress's decision, as promulgated in 21 U.S.C. § 337(a), to only allow either the FDA or the U.S. Department of Justice to enforce the FDCA, the court noted.
PhotoMedex filed a Lanham Act claim for false advertising based on a competitor's representation that a dermatological laser had been “cleared” by the FDA. The relevant FDA regulation only allows a manufacturer to market such a device if it or a similar device has been cleared by the FDA. However, the manufacturer has discretion to determine whether its device is similar to one that has been cleared.
PhotoMedex noted that the FDA had not weighed in on whether the device in question was similar to one that had been approved, the court said. Thus, “We held that the plaintiff's Lanham Act claim against that representation was barred,” the court said. Quoting thePhotoMedexdecision, it added, “Recognizing that the claim would have required us to '[t]est[ ] the truth' of the defendants' clearance statement, we refused 'to usurp the FDA's prerogative to enforce the FDCA' by deciding whether the defendants' device was covered by the FDA's earlier clearance of a different device.”
Here the relevant FDA regulations, codified at 21 C.F.R. §102.33(c), (d), state:
(c) If a diluted multiple-juice beverage or blend of single-strength juices contains a juice that is named or implied on the label or labeling other than in the ingredient statement (represented juice), and also contains a juice other than the named or implied juice (nonrepresented juice), then the common or usual name for the product shall indicate that the represented juice is not the only juice present (e.g., “Apple blend; apple juice in a blend of two other fruit juices.”)(d) In a diluted multiple-juice beverage or blend of single-strength juices where one or more, but not all, of the juices are named on the label other than in the ingredient statement, and where the named juice is not the predominant juice, the common or usual name for the product shall:(1) Indicate that the named juice is present as a flavor or flavoring (e.g., “Raspcranberry”; raspberry and cranberry flavored juice drink); or(2) Include the amount of the named juice, declared in a 5-percent range (e.g., Raspcranberry; raspberry and cranberry juice beverage, 10- to 15-percent cranberry juice and 3- to 8-percent raspberry juice). The 5-percent range, when used, shall be declared in the manner set forth in §102.5(b)(2).
(d) In a diluted multiple-juice beverage or blend of single-strength juices where one or more, but not all, of the juices are named on the label other than in the ingredient statement, and where the named juice is not the predominant juice, the common or usual name for the product shall:
(1) Indicate that the named juice is present as a flavor or flavoring (e.g., “Raspcranberry”; raspberry and cranberry flavored juice drink); or
(2) Include the amount of the named juice, declared in a 5-percent range (e.g., Raspcranberry; raspberry and cranberry juice beverage, 10- to 15-percent cranberry juice and 3- to 8-percent raspberry juice). The 5-percent range, when used, shall be declared in the manner set forth in §102.5(b)(2).
“Thus, Pom's challenge to the name 'Pomegranate Blueberry Flavored Blend of 5 Juices' would create a conflict with FDA regulations and would require us to undermine the FDA's apparent determination that so naming the product is not misleading,” the court said. It refused to do, and instead upheld the district court's determination barring Pom's Lanham Act challenge to the name of Coca-Cola's product.
A similar analysis doomed Pom's challenge to the label that appears on the beverage. According to the court, “Pom apparently wants to force Coca-Cola to alter the size of the words on its labeling so that the words 'Pomegranate Blueberry' no longer appear in larger, more conspicuous type on Coca-Cola's label than do the words 'Flavored Blend of 5 Juices.' ”
However, the court noted, “Despite speaking extensively to how prominently required words or statements must appear, the FDA has not (so far as we can tell) required that all words in a juice blend's name appear on the label in the same size or that words hew to some other standard that Pom might have us impose.” The court refused to act in an area that the FDA has not regulated because to do so “would risk undercutting the FDA's expert judgments and authority.”
The court then rejected three district court opinions that permitted Pom to proceed on similar Lanham Act claims. The court said that the decisions in those cases, Pom Wonderful LLC v. Tropicana Products Inc., No. 09-cv-00566-DSF (C.D. Cal. Sept. 7, 2010); Pom Wonderful LLC v. Ocean Spray Cranberries Inc., 642 F. Supp. 2d 1112 (C.D. Cal. 2009); and Pom Wonderful LLC v. Welch Foods Inc., No. 09-567 AHM (C.D. Cal. June 23, 2009), “cannot be harmonized with PhotoMedex” because they allowed private rights of actions to undermine the FDA's judgments.
“In concluding that Pom's claim is barred, we do not hold that Coca-Cola's label is non-deceptive,” the court said. But, it held that the label “presumptively complies with the relevant FDA regulations and thus accords with the regulations the FDA has so far made.”
Two recent California Supreme Court decisions have made it clear that standing under the UCL statute, Cal. Bus. & Prof'l Code § 17204, is not dependent on entitlement to restitution, the court noted, citing Kwikset Corp. v. Superior Court, 246 P.3d 877 (Cal. 2011); and Clayworth v. Pfizer Inc., 233 P.3d 1066 (Cal. 2010). The court said that it was “inclined to interpret the materially identical language” in the false advertising statute “the same way.” However, because the district court's decision came prior to Kwiksetand Clayworth, the court said that it was appropriate to remand.
On remand, the court noted that the district court may have to determine what state law claims are preempted.
Judges Dorothy W. Nelson and N. Randy Smith joined the opinion.
Pom was represented by Seth P. Waxman of Wilmer Cutler Pickering Hale and Dorr, Washington, D.C. Coca-Cola was represented by Steven A. Zalesin of Patterson Belknap Webb & Tyler, New York.
By Tamlin H. Bason
Opinion at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/1055861May1712(1).pdf
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