«

»

Apr 23 2014

POM v. Coca-Cola Case Gets Supremes’ Attention

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.

Coca Cola Pom LabelSo 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.”

*******************************************************************************************************************************************

UPDATE  JUNE 13 2014   READ BELOW FOR THE SUPREME COURT’S DECISION

*******************************************************************************************************************************************

A unanimous Supreme Court (8-0 because Justice Breyer did not participate) ruled  that the FDA regulations allowing Coke to base the name of the product on the “flavor”  did not necessarily mean that Pom could not sue under the Trademark Act based upon unfair competition.  The Court said the two statutes could work independently and that one did not -preempt the other. So now Pom will be allowed to prove its case in the Federal District Court.  Settlement anyone? Here’s a link to the decision  http://www.supremecourt.gov/opinions/13pdf/12-761_6k47.pdf

8 comments

Skip to comment form

  1. Gloria Wolk

    There is a similar case in which Gerber Foods was alleged to have deceptive packaging. Williams v. Gerber Food, 552 F.3d 934 (9th cir.2008). The packaging was deceptive.

  2. Oscar Michelen

    Yes, folks bring these suits all the time for a variety of reasons.

  3. Carlos Danger

    Justice Department lawyer: “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.”

    IMO, you should not be able to name your “juice product” based on “juice that flavors it” when said flavoring is an inconsequential amount based on volume and no consumer on Earth would not be mislead by such name but instead based on the personality of the lawyer that advocates for such a name.

    So for example, this “juice product” could be legally called dickhead juice.

  4. Gloria Wolk

    I agree with Pom. I grow pomegranates and strawberries and have grown blueberries. Pom are far more difficult to grow for a number of reasons. And working parents, when they shop, are in a rush. They don’t have time to analyze the labels on the backs of packages. Worse yet, they are falsely lured into thinking they can trust the packaging–because of the FDA.

    Who can trust the FDA, when they are influenced by money and lobbyists and often have allowed dangerous drugs on the market? And too late recalled them after people die?

  5. Gloria Wolk

    One more thought: Why is the Justice Dept. taking the side of those who would deceive the public? What’s in it for them? This is a Justice Dept. that shames our ideals every day of the week, every week of the year. Ted Stevens, James Brown, et al.

  6. Oscar Michelen

    The answer to your second comment is contained in your first comment, Gloria. Money talks.

  7. Carlos Danger

    Not even close. 8-0 in favor of Pom overruling the 9th Circuit (which agreed with the trial court) which said Pom could not sue.

    Pom may (use Lanham Act) to sue Coke alleging the Coke label is misleading despite the fact that the FDA which is in charge of (implementing FDCA) regulating food labeling had no objection to the Coke label.

    http://www.supremecourt.gov/opinions/13pdf/12-761_6k47.pdf

  8. Oscar Michelen

    Good, clear decision

Leave a Reply