A bit more on Pom

I wonder whether this was the first Supreme Court brief featuring a color picture?  Also, I should probably add a tag for Pom, same as I have for Google.  Feels a bit like giving in, though.

Anyway: Transcript of oral argument, for those who prefer not to read secondhand postmortems.

Supreme Court post-argument discussion at AU's Washington College of Law: Pom Wonderful v. Coca-Cola (webcast available)

Moderated by Prof. Christine Farley, American University Washington College of Law

Rebecca Tushnet, Professor, Georgetown Law School

How we got here: excellent work on the cert petition by Pom, because while it was hard to call what was going on in the lower courts a split, it was certainly an unholy mess.

Brian Boynton, Partner, Wilmer Hale (Pom Wonderful)

“Pomegranate Blueberry” with “flavored blend of five juices” is the product; 99.4% apple and grape juice, only .3/.2% pomegranate and blueberry. Pom thought it was losing business from this and sued.  Coca Cola internally acknowledged that the product posed a risk from a misleadingness perspective but accepted the risk.

DCt dismissed on the ground that the FDA juice regulations precluded this claim. Wasn’t clear what the 9^th Circuit’s rationale was; we thought there was a tangible split and the US agreed there was tension.

Farley: Coca-Cola’s argument?

RT: Disclaimer that while I am not always on Pom’s side I think it had the better argument here. That said, Coke relied on the detailed nature of FDA regulations and need for national uniformity; problem is that sounds like field preemption, which isn’t part of the FDCA.

Samuel Gedge, Associate, Wiley Rein LLP (Chamber of Commerce)

Need for national uniformity is an interest of the Chamber.

Boynton: noted US brief—Pom shouldn’t be able to challenge the full name “Pomegranate Blueberry Flavored Blend of 5 Juices” since that choice was specifically authorized, but should be able to challenge other aspects of label including how that name is presented (large typeface for PB, small for everything else) as well as coloring of juice to be darker.

Farley: any other avenues for challenge?

Boynton: Cal. UCL claim; FDA does not provide administrative route for challenges of this sort.

Farley: what’s preempted?

RT: nonidentical state laws—you can’t enforce the FDCA but you can enforce state laws identical to those of the FDCA. 

Farley: Congress thought hard about this, it seems, but didn’t say anything about the Lanham Act.  What about a nonidentical Lanham Act claim: is it in limbo? Pom says no preclusion; Coke says yes.

Boynton: preemption provision mentions only state law.

Farley: the argument is that Congress intended to preempt this kind of claim; broad preemption (preclusion) is desirable.

Gedge: national uniformity is a significant concern of Congress and has been for a while. If a consumer can’t bring a state law claim that they were misled, why should a competitor be able to bring a derivative claim?

Farley: what is the worst case scenario?  That Pom wins and the labeling is enjoined?  What’s disruptive of uniformity?

Gedge: we aren’t dealing with just one jury.  Juries across the nation can come to drastically different conclusions. Juries don’t say what the label should be, just that the Lanham Act was violated. Same need for uniformity/certainty.

RT: not exactly; Lanham Act is a uniform federal law. Juries enforce FDCA too in various circuits. There’s no uniform single jury for FDCA claims.  Moreover, the fact that the jury doesn’t say what the label should be is a reason this isn’t a uniformity/preclusion problem; the jury just says a particular version is or isn’t misleading, which is a burden borne by all manufacturers.  The FDA regulations do not specify what juices must be named, the way they specify how fat content must be disclosed on the nutrition panel.

Farley: what about that email from Coke suggesting the risk of misleadingness and going with regulatory compliance?  What is Coke saying its compliance is?

Boynton: we don’t know yet, but we think that it’s compliance with the very specific regulation about what names for blended juices are offlimits as misbranding. Not as specific with respect to other aspects of the label, such as the fruit vignette.

Gedge: there are different levels of specificity with regard to different parts. The requirement for usual/common name is more specific than the relative type sizes.  US government’s position tried to split the baby—specific enough = precluded. Court didn’t seem particularly persuaded.  But regardless of whether there are FDCA juries, but Congress had that information before it and nonetheless implemented preemption, because other regimes would cause damage. 

Farley: why not mention Lanham Act?

Gedge: never been a requirement for Congress to scour federal statutes for conflicts; courts should reconcile competing regimes.

Farley: any difference between federal and state claims?

Gedge: Same concerns were juries under different standards, making determinations that Congress vested in the FDA. Presumption against preemption at state level, not applicable here. Separation of powers: courts determining which statutes to give effect to. In the end, there’s tension that needs to be reconciled.

Farley: turn to the oral argument.

Boynton: Pom got to make the arguments it wanted to make, as did Coca-Cola.  All the issues were hashed out.

Gedge: Kennedy was open about the fact that the container misled him.  Court seemed to be taking a view that Coke was advocating field preemption, and that’s understandable because there was confusion about what the 9^th Circuit actually held. We aren’t saying everything is off limits, just that there should be mirror of state preemption.

RT: I couldn’t distinguish Coke’s position from the 9^th Circuit’s.  Mini field preemption? But you can comply with both.

Boynton: if we took Coke’s position that the existence of a state preemption provision automatically created a federal preclusion provision, we’d have a very different world. Congress carefully considered which laws to displace, and only displaced (certain) state law. No reason to think it was an oversight. Hearing testimony included availablility of Lanham Act claims against misleading food labels.

Farley: difference of opinion about Congress’s intent.

We’ve seen Lanham Act claims supplementing other types of claims—patent, copyright. Limits of the Lanham Act.

RT: Many thoughts about this!

(1)   Amicus participation: INTA and AIPLA despite the absence of any TM interest—the other half of the Lanham Act has arrived!

(2)   Role of Dastar—nice argument by Coke about how SCt interpreted Lanham Act restrictively in Dastar in order to preserve the scope of the Copyright Act.  I think it’s a bigger stretch here: “origin means physical origin” is easier than “false or misleading means false or misleading unless heavily regulated by the FDA.” But still worth thinking about.

(3)   Court’s skepticism about FDA’s capacity to understand what consumers are thinking—Justice Kennedy was very clear that he didn’t trust the FDA to figure out what’s deceptive—helps Pom in this case, but has bad implications for FDA authority when its regulations are challenged on First Amendment grounds.

(4)   Limiting the Lanham Act only when consumers are deceived by non-IP issues seems like a bad limit.

Farley: how does the FDA know what’s misleading?

RT: historically anecdotal evidence/reasoning sufficed, though this may be changing as the evidentiary burden on adminstrative agencies increases.

Gedge: Even if the FDA didn’t have resources, vesting private actors as roving AGs isn’t necessarily the solution.  FDA is competent, and hears from stakeholders on all sides.

Farley: can’t Lanham Act cases provide really specific evidence that’s useful?

Boynton: FDA’s limited resources were discussed in the briefing.

RT: in defense of the other side: surveys suck and cases can be brought for anticompetitive reasons.  One way to look at this: Pom sold a very expensive juice that was more expensive because of health claims that the FTC has found to be misleading.  It’s not clear how customers are harmed by drinking apple juice instead.  (I think the harm is to their autonomy and that ought to be enough, but I recognize the issue.)

Farley: read the tea leaves.

Gedge: Kennedy seemed convinced of misleadingness.  Arguments on both sides.  Don’t let competitors cloak themselves in consumer’s mantle but not let consumers sue.

Farley: of course that’s what TM does.

RT: The Court likes corporations a lot better than consumers!  Pom seemed to have a pretty good day.  No one was obviously on Coca Cola’s side.

Farley: we rely a lot on private actions to check misleadingness—TM is about private regulation of the markets.  Is the best case superregulation by an all encompassing agency?

Boynton: express preemption provision here excludes the provision of the FDCA that makes misleading claims actionable, so misleadingness claims should be allowed anyway (I don’t think this is true).

Gedge: Coca-Cola’s position is that this blanket ban is just a summary/statement of comprehensiveness, not an independent authorization of state misleadingness claims.

Q: will customers’ sophistication grow over time?

Boynton: that will be picked up in surveys.  There was some discussion today about whether a discerning consumer understood what “flavored” meant in terms of small amount of juice.

RT: No, it won’t.  We’re cognitive misers; we will always have gaps in our ability to process information. We will be sophisticated about some things and not others.  Even if the market were static there’d still be predictable gaps in our information processing.

Q: posted calorie content in NYC restaurants. 

RT: doesn’t work that well; if it works, would decrease other information, which is certainly a valid policy choice but it can’t make our brains take in more information. Regulation usually changes the behavior of retailers/manufacturers more than understanding of consumers.

Q: how much is this case about authenticity?

Boynton: Pom’s view is that you should provide consumers accurate information and then they can decide.

Gedge: fundamental disagreement between parties about what consumers want to know; FDA considered that in the rulemaking. Pom says people are buying juice for pom’s benefits; Coca Cola says people buy it for the taste, so we can provide them the same with that label.

Boynton: if you took the same label and simply disclosed .3% pom and .2% blueberry, Coca Cola could still convey its view that it has the same flavor.  Don’t have to deceive someone.

Gedge: trenches on trade secrets.

Q: if Coca Cola wins, would that effectively be a limit on the scope of the Lanham Act? Would it continue to other regulatory bodies?

Boynton: we say yes.  Nothing that stops this rationale at juice labeling.  Some lower courts have extended it beyond FDA to USDA regulated cosmetics.  FTC regulation could have preclusive effect.

Gedge: depends on what argument the Court decides on.  Anchor would be express preemption clause.

RT: many statutes do have them: FIFRA, USDA’s organic regulations, etc.

Q: taste is so subjective—is there a way to prove it’s pomegranate flavored?

Boynton: no record in this case.  We don’t think it’s likely that .3% could provide the flavor; in the gov’ts view this should get litigated.

RT: Your brain will fool you: pink ice cream flavored vanilla will be judged to taste like strawberries, so it’s hard to figure out what the appropriate testing would be to judge what the flavor is.

Farley: what should this product be called?

Gedge: its current name.

Boynton: many alternatives: could call it Pom-Blueberry Flavored Apple & Grape Juice, or Apple & Grape Juice w/Pom-Blueberry Flavor, or disclose percentages.