Opening the Door to More Litigation Between Food Companies? See POM v. Ocean Spray Decision
False advertising claims under the Lanham Act and corresponding state law claims for food companies can be tough going. Many intersect issues regulated by the FDA under the Federal Food, Drug, and Cosmetic Act (FFDCA). No private right of enforcement of the FDA regulations exists. Only the FDA is allowed to bring a legal action to enforce its regulations. Lanham Act claims are generally barred where private litigants ask the court to determine preemptively how the FDA will interpret its own regulations.
Now comes the recent decision in POM Wonderful LLC v. Ocean Spray Cranberries, Inc. POM is aggrieved because Ocean Spray markets pomegranate and cranberry blended juices though, according to POM, the juices are “almost entirely comprised of apple and grape juice.” POM is alleging Lanham Act false advertising claims and California state law false advertising and unfair competition claims.
The court denied a Rule 12(b)(6) motion to dismiss. Threading the needle, the Court found that the claims were not seeking FFDCA enforcement. According the Court, POM’s claims are not for “mislabeling,” but for false advertising and promotion. The court determined it would not have to interpret FDA regulations and that “POM’s Lanham Act claim ‘extend beyond the packaging and name . . . to its advertising and marketing including . . . website.” Applying similar logic, the court found that the FFDCA did not preempt POM’s state law claims.
Lesson from the POM court: Whether one food company can bring false advertising claims against another depends in part on whether a court believes that the claims are focused on non-FFDCA-regulated issues such as advertising, websites, social media or other marketing efforts.
Alaska Unfair Trade Practices and Consumer Protection Statute
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As discussed previously on this blog, the ABA Section of Litigation, Products Liability Committee will soon publish its 50-state survey on consumer protection statutes. In addition to the chapter on Washington, Bryan Anderson and I also coauthored the Alaska chapter.
As with Washington, the Alaska statute is quite broad. See AS § 45.50.471-.561. A recent development in Alaska law extends the act to permit claims between commercial entities. See W. Star Trucks v. Big Iron Equip. Serv., Inc., 101 P.3d 1047 (Alaska 2004).
A unique aspect of Alaska law is that it follows the English Rule awarding attorneys’ fees to the prevailing party. An interesting issue arises in the class context when a defendant “prevails” in a class suit. Who is responsible for paying prevailing party fees under Alaska Civil Rule 82 or AS § 45.50.537? The Alaska Supreme Court has resolved this issue by deciding that “named” class members may be liable for a prevailing defendant’s attorneys’ fees but that “absent” class members who are passive and have “relatively small claims” may not. See Turner v. Alaska Commc’ns Sys. Long Distance, Inc., 78 P.3d 264, 266-70 (Alaska 2003).
Another High-Profile California Labeling Case
Center for Science in the Public Interest (CSPI) recently filed a putative class action in federal court in the Northern District of California claiming that Glacéau’s VitaminWater is mislabeled under California law. This suit comes on the heels of the recent Ninth Circuit decision that remanded the Gerber foods case. We previously discussed the Gerber case on this blog and how it presents “serious questions as to whether there are any clearly defined legal standards as to when a food label is misleading and when it’s not.”
The VitaminWater case appears to raise similar issues. CSPI fails to point to anything directly in VitaminWater’s labeling or advertising that is actually incorrect. Instead, CSPI asserts that “the central message” of VitaminWater’s labeling “is that drinking VitaminWater is good for one’s health.” CSPI asserts this is misleading because “VitaminWater is loaded with sugar” and as a result “may actually harm consumers’ health.” CSPI also faults the product labeling because it fails to disclose that Glacéau, the company that manufactures VitaminWater, was purchased by a soft drink manufacturer.
