If you need to sue somebody for stealing your customers with false advertising, don't worry about a conflict between two federal statutes — the Food, Drug, and Cosmetic Act and the Lanham Act. No conflict exists, the Supreme Court held today.
To understand why, let us tell you . . .
. . . a story about juice
POM Wonderful likes to brag about how much liquid essence-of-pomegranate it squeezes into its curvy bottles.
But POM Wonderful gets plumb hissy when it thinks that another drink-maker has implied that its competing beverages contain lots of the tart nectar when in fact they have just a teeny dot of it.
That happened when Minute Maid (a part of Coca-Cola) started selling bottles of "Enhanced Juice" whose labels showed half a pomegranate, half an apple, three blueberries, three grapes, and a pair of raspberries. The words just below the fruit said "POMEGRANATE BLUEBERRY" and then, in smaller letters, "FLAVORED BLEND OF 5 JUICES".
The contents in fact consisted of 99.4 percent apple and grape juices, 0.3 percent pomegranate juice, 0.2 percent blueberry, and 0.1 percent raspberry.
Does "POMEGRANATE BLUEBERRY" tend to mislead?
POM Wonderful sued Minute Maid under the Lanham Act, which protects competitors from the effects of false and misleading advertising. POM Wonderful claimed that the Minute Maid label gave juice-buying customer the wrong idea that the bottle with "POMEGRANATE BLUEBERRY" on it contained mostly those kinds of juices rather than the squeezings from apples and grapes.
The district court and Ninth Circuit held that the FDCA precluded POM Wonderful's false-label claim under the Lanham Act. Because Congress gave the Food and Drug Administration the power to set standards for juice-labeling, the courts believed, the Lanham Act claim had to give way.
The Supreme Court, by an 8-0 vote, reversed. Justice Anthony Kennedy found no conflict between the FDA's authority to ban misleading labels and the right of competitors like POM Wonderful to sue for the harm arising from the consumer deception that resulted. On the contrary, "the FDCA and the Lanham Act complement each other in the federal regulation of misleading labels." POM Wonderful LLC v. Coca-Cola Co., No. 12-761, slip op. at 17 (U.S. June 12, 2014).
Although the Court did not write about other instances of federal "preclusion" — as in Credit Suisse Securities v. Billing, 551 U.S. 264 (2007) (holding that securities law precluded irreconcilable antitrust claim) – POM Wonderful suggests that preclusion doctrine will shrink. Co-existence, even in the face of conflict, will prevail. At least it should.