While the Supreme Court this week declared the good news that racism in America is over, allowing States to ban the use of affirmative action in public universities, it was also hearing arguments in a case that sounds trivial but could have a huge impact on esoteric world of food-labeling. Before POM Wonderful LLC started marketing its line of pomegranate juices, the fruit was largely unheard of in this country. But its rapid success, brought on by the surge in health-related products, has caused POM to have lots of competition in the pomegranate juice market. Over the past few years, POM has brought a series of lawsuits against competitors alleging that their claims that their juices were “pomegranate juices” amount to false advertising and unfair competition because they were blended with other juices.
In 2011, A California federal jury found that Pom hadn’t proven that advertising and labels on Ocean Spray Cranberries Inc.’s pomegranate-cranberry juice drink duped consumers into thinking they bought a “pomegranate juice drink” when they purchased a beverage that actually contained only 2% pomegranate juice. Pom claimed during the trial that Ocean Spray’s drink, which was considerably cheaper misled consumers. The jury disagreed, presumably buying Ocean Spray’s argument that the labeling which showed how much pomegranate juice there was in the container fairly notified consumers of what they were buying.
So now Pom decided to take on Coca-Cola which produces a drink it calls “Minute Maid Pomegranate-Blueberry Juice” but which actually only contains 0.03% pomegranate juice; 0.02 blueberry juice; 0.01% plum and raspberry juice; and 99.4% apple juice. The label (shown the left) shows a pomegranate and apple of equal dimension and calls itself “a blend of five juices” but the word “apple’ does not appear on the front label. The pomegranate juice in the product is equal to about one teaspoon per half gallon. Pom sued under The Lanham Act (also known as the Trademark Act) which allows private lawsuits against companies that make false or misleading claims. It also allows lawsuits over false claims that would give competitors unfair advantage over other companies. Pom’s essential claim is that pomegranates are very expensive to grow and are known for their positive health benefits. It would be unfair to Pom and misleading to customers to allow Coke, they say, to call its drink Pomegranate-Blueberry Juice when it only contains trace amounts of those products.
Coke, however, argued that it submitted its label to the Food and Drug Administration and that they approved calling it Pomegranate-Blueberry Juice. Their point was that once the FDA approved the label, they were free to use it and it immunized them from suits of this kind. FDA regulations allows a company to label its product by an ingredient that”flavors” the product and does not require the company to label it by its predominant ingredient. Courts below agreed with this argument.
The justices, however, were skeptical.
Justice Anthony M. Kennedy stated: “If Coca-Cola stands behind this label as being fair to consumers then I think you have a very difficult case to make. I think it’s relevant for us to ask whether people are cheated in buying this product.” Kathleen M. Sullivan, a lawyer for Coca-Cola, said consumers were not misled: “We don’t think that consumers are quite as unintelligent as Pom must think they are. They know when something is a flavored blend of five juices and the nonpredominant juices are just a flavor.” Justice Kennedy was not pleased by the response: “Don’t make me feel bad,” he said, “because I thought that this was pomegranate juice.” The courtroom erupted in laughter, and Justice Antonin Scalia chimed in playfully: “He sometimes doesn’t read closely enough.”
The legal question in the case was how to harmonize two federal laws, one allowing private lawsuits over misleading advertising and the other authorizing federal regulation of food labels.But a legal label can still be misleading if it causes confusion to consumers, I would argue. Justice Alito similarly thought the two could be reconciled. A lawyer for the Justice Department (which had submitted a brief in support of Coke’s position that the FDA ruling trumped the Lanham Act) said federal regulations specifically allowed the name Coca-Cola gave its product, immunizing it from Pom’s suit: “By allowing manufacturers to choose to name their juice product based on the juice that flavors the product as opposed to based on the juice that is predominant by volume, consumers will come to understand that when a juice says pomegranate- and blueberry-flavored, what it means is that the juice is present as a flavor.” Judge Alito quickly asked whether that was realistic. “You don’t think there are a lot of people who buy pomegranate juice because they think it has health benefits, and they would be very surprised to find when they bring home this bottle that’s got a big picture of a pomegranate on it, and it says ‘pomegranate’ on it, that it is — what is it — less than one half of 1 percent pomegranate juice?” he asked.
The case could have far-reaching impact on how foods are labeled and is being closely watched by the food and beverage industry, which is concerned that a broad ruling in favor of Pom could open the door to more litigation against food companies and create uncertainty about label requirements. If the Court sides with Coca-Cola, then companies need only assert that they are using an ingredient to “flavor” a product and may label it as being that product no matter how little of it is in the actual item. They just need to do some creative labeling, like Coke did here: In big bold letters, it says “Pomegranate-Blueberry” but below that in smaller and lighter type, it says “flavored blend of 5 juices.” So that the products is technically being called “pomegranate-blueberry flavored” which is why the FDA gave it the green light. If the Court sides with Pom, however, (as I think it might) FDA-approved labeling will not shield companies from these types of lawsuits if the end result is that they are misleading to consumers. As Justice Kennedy stated “I think it’s relevant to ask whether people are cheated in buying this product.”