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Pom Wonderful LLC, A Delaware Limited v. the Coca-Cola Company

May 17, 2012

POM WONDERFUL LLC, A DELAWARE LIMITED LIABILITY COMPANY,
PLAINTIFF-APPELLANT,
v.
THE COCA-COLA COMPANY, A DELAWARE CORPORATION,
DEFENDANT-APPELLEE. 



Appeal from the United States District Court for the Central District of California S. James Otero, District Judge, Presiding D.C. No. 2:08-cv-06237- SJO-FMO

The opinion of the court was delivered by: O'scannlain, Circuit Judge:

FOR PUBLICATION

OPINION

Argued and Submitted February 8, 2012-Pasadena, California

Before: Dorothy W. Nelson, Diarmuid F. O'Scannlain, and N. Randy Smith, Circuit Judges.

Opinion by Judge O'Scannlain

OPINION

We must decide whether the Food, Drug, and Cosmetic Act bars a Lanham Act claim alleging that the name and labeling of a juice beverage are deceptive.

I

Pom Wonderful LLC produces, markets, and sells bottled pomegranate juice and pomegranate juice blends, including a pomegranate blueberry juice blend. The Coca-Cola Company markets and sells bottled juices and juice blends under the Minute Maid brand. In September 2007, Coca-Cola announced a new product called "Pomegranate Blueberry" or "Pomegranate Blueberry Flavored Blend of 5 Juices." (The parties dispute the name. We at times refer to Coca-Cola's product as "Pomegranate Blueberry" but take no view on whether this is its actual name.) This product contains about 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice. The front label displays the product's name and a vignette depicting each of those fruits:

Believing that it was losing sales to Pomegranate Blueberry, Pom sued Coca-Cola in September 2008. Pom alleged that Coca-Cola misled consumers to believe that Pomegranate Blueberry consists primarily of pomegranate and blueberry juices when it actually consists mainly of (the cheaper) apple and grape juices. Pom challenged the name, labeling, marketing, and advertising of Pomegranate Blueberry. It claimed that Coca-Cola violated the false-advertising provision of the Lanham Act, which authorizes suit against those who use a false or misleading description or representation about any goods. See 15 U.S.C. § 1125(a). Pom also claimed that Coca-Cola violated California's Unfair Competition Law (UCL) and its False Advertising Law (FAL), which prohibit deceptive practices and misleading advertising. See Cal. Bus. & Prof'l Code §§ 17200 et seq.; id. §§ 17500 et seq.

Coca-Cola moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the complaint for failure to state a claim. The district court partially granted and partially denied the motion. The court ruled that Pom's Lanham Act challenge to Pomegranate Blueberry's name and labeling was barred because Pom's suit "may be construed as impermissibly challenging" Food and Drug Administration (FDA) regulations permitting the name and labeling that Coca-Cola uses and because Pom's claim could improperly require the court to interpret and to apply FDA regulations on juice beverage labeling. But the court also held that Pom's Lanham Act challenge could otherwise proceed. Specifically, the court ruled that, although Pom could not challenge Pomegranate Blueberry'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. The court also held that the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. §§ 301 et seq., 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 court's earlier ruling on its Lanham Act claim. The amended complaint repleaded Pom's Lanham Act, UCL, and FAL claims. In an apparent effort to overcome the court's preemption ruling, Pom added to its UCL claim a misbranding allegation under California's Sherman Law, which includes language that is materially identical to the FDCA's misbranding provision. See Cal. Health & Safety Code § 110660; compare id. with 21 U.S.C. § 343(a)(1).

Coca-Cola moved under Rule 12(b)(6) to dismiss the amended complaint. 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 thus could not, under the court's earlier ruling, support Pom's Lanham Act claim) and which aspects constituted advertising or marketing (and ...


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