Mead Johnson is (Again) Restrained from Disseminating Misleading Advertising
On April 20, 2011, the Fourth Circuit affirmed the judgment and injunction entered by Chief Judge James R. Spencer in PBM Products, Inc. v. Mead Johnson & Co., Civil Action No. 3:09cv.269, on December 1, 2009. This lawsuit was the third chapter in a long-running combat between PBM and Mead Johnson relating to baby formula products. PBM sued Mead Johnson twice before, in 2001 and 2002, for similar false advertising, and settled both cases.
PBM filed the most recent suit in April 2009 claiming a false advertising in violation of the Lanham Act (15 U.S.C. § 1125) and product disparagement based on various Mead Johnson claims about its Enfamil product. Mead Johnson shot back with claims for breach of contract, false advertising, and civil contempt based on the prior settlement agreements between the parties, and a claim for defamation arising from PBM CEO Paul Manning’s public statement that “Mead Johnson Lies About Baby Formula … Again.” None of Mead Johnson’s claims made it to the jury, as Judge Spencer granted PBM summary judgment on the defamation claim, and granted judgment as a matter of law after Mead Johnson’s case in chief on the other claims. PBM’s claim, on the other hand, resulted in a jury verdict and award of $13.5 million in damages, and a permanent injunction against advertising claims found to be false.
On appeal, Mead Johnson made numerous challenges -- to the dismissal of its claims against PBM; to the admission of expert testimony and evidence relating to the prior litigation between the parties; and to the permanent injunction -- all of which were soundly rejected by the Fourth Circuit. Notably, the panel agreed with Judge Spencer’s finding that the statement “‘Mead Johnson Lies About Baby Formula … Again’ was substantially true because false advertising is synonymous with lying.” (Slip Op. at 8-9). With respect to the permanent injunction, the Fourth Circuit upheld the district court, noting:
“As the litigation history of the parties demonstrates, despite having been twice restrained from disseminating misleading advertising, Mead Johnson continued to do so. PBM cannot fairly compete with Mead Johnson unless and until Mead Johnson stops infecting the marketplace with misleading advertising.” (Slip Op. at 23).
A copy of the Fourth Circuit’s decision can be found here. Only time will tell whether this third lawsuit will be the charm for PBM or whether there will be additional chapters in this long-running battle over baby formulas.
