False Advertising Claim under Lanham Act Not Precluded or Barred by the FDC ActJuly 28, 2009
By Cassandra A. Soltis –
In Pom Wonderful LLC v. Ocean Spray Cranberries, Inc., 2009 WL 2151355 (C.D. Cal. 2009), the U.S. District Court for the Central District of California determined that Pom Wonderful LLC’s (Pom’s) false advertising claim against Ocean Spray Cranberries, Inc. (Ocean Spray) under the Lanham Act was not precluded or barred by the Federal Food, Drug, and Cosmetic Act (FDC Act). The court also found that Pom’s false advertising and unfair competition claims under California law were not preempted by the FDC Act.
Pom alleged that Ocean Spray “made false and misleading representations regarding the primary ingredients” in Ocean Spray’s pomegranate and cranberry juice blend beverage, which “is almost entirely comprised of apple and grape juice.” Pom, 2009 WL 2151355, at *1. Indeed, the court noted that, based on the product’s label, “cranberry juice ranks third and pomegranate juice ranks fifth” among the five juices in the product. Id. Pom also alleged that Ocean Spray marketed the product as being high in antioxidants when, in fact, this is untrue. Id. Pom argued that “[a]s a result of [Ocean Spray’s] misrepresentations,” Ocean Spray’s “costs to produce the Beverage are lower and [it] can charge less for its product than competitors such as” Pom. Id. Further, “consumers are ‘tricked’ into thinking they are getting a product that is similar to [Pom’s] (whose product is primarily pomegranate juice) for a lower price.” Id.
Ocean Spray’s motion to dismiss Pom’s complaint was denied. The court explained that although the “Lanham Act and the [FDC Act] have overlapping jurisdiction in areas such as marketing and product labeling,” the “purposes of the two statutes are different,” with the Lanham Act “’intended to protect commercial interests’ from unfair competition,” and the FDC Act, “to protect the public from unsafe or mislabeled products.” Id. at *2 (citations omitted). Further, “the Lanham Act may be enforced by private litigants,” but only FDA or the Department of Justice can enforce the FDC Act. Id. Because of the differences in these two laws, Lanham Act claims are generally “barred where private litigants ask the district court to ‘determine preemptively how [the FDA] will interpret and enforce its own regulations.’” Id. (citations omitted). “Put differently, the key issue in the line of cases dealing with [the FDC Act] or FDA regulation preclusion of Lanham Act claims is whether the false advertising involves a fact that can be ‘easily verified,’ without requiring the truth of the fact to be determined by the FDA.” Id. (citations omitted).
The district court opined that “determining the primary ingredients of the Beverage and whether [Ocean Spray’s] representations are misleading is not contingent on a decision of fact by the FDA or the enforcement of its regulations.” Id. at *3. Indeed, the FDC Act provision stating that a food will be misbranded if its labeling is false or misleading does not define what constitutes “false or misleading.” Id. Although there are several requirements for the labels of beverages containing multiple juices, Pom’s complaint “does not reference or attempt to enforce these requirements.” Id. at *4. “Accordingly, [Pom] has stated a permissible claim under the Lanham Act for false advertising.” Id.
The court also found that Pom’s state law claims under the Sherman Act were neither expressly preempted nor barred by field preemption. Although the FDC Act expressly preempts state requirements for food labeling that are not identical to certain sections of the FDC Act, the Act does not preempt false or misleading labeling or unfair competition claims. Id. at *5-6. The court also stated “that Congress did not intend federal law to exclusively occupy the fields of food labeling and advertising.” Id. at *7. Finally, the court found that application of the primary jurisdiction doctrine was not warranted in this case and that Pom met the heightened pleading requirements of Rule 9(b). Id. at *7-8.