Supreme Court allows lawsuit over constitution … of a fruit juice

Pomegranate juice company POM Wonderful can sue rival Coca-Cola for unfair competition over an allegedly misleading label, the Supreme Court ruled in a 8-0 decision.

The pomegranate juice company, POM Wonderful, can move forward with a lawsuit against Coca-Cola for allegedly using a deceptive and misleading label on a competing juice drink, the US Supreme Court ruled on Thursday.

At issue in the long-running juice war was whether Coca-Cola’s Minute Maid juice was falsely claiming to be a “pomegranate blueberry” juice drink when, in fact, it was primarily a blend of apple and grape juices.

Although the Minute Maid juice label uses larger letters to suggest the product is “pomegranate blueberry,” the actual liquid in the carton is a combination of five juices and contains only 0.3 percent pomegranate juice and 0.2 percent blueberry juice.

In fact, 99.4 percent of the juice blend is comprised of apple and grape juices.

POM Wonderful grows pomegranates. The company also makes and distributes pomegranate juices that compete against Minute Maid juices on store shelves.

Juice from pomegranates and blueberries is more expensive than juice from apples and grapes. POM Wonderful felt Coca-Cola was using deceptive labeling to trick consumers into believing that the Minute Maid products contained more than slight amounts of pomegranate and blueberry juices. POM claimed the deceptive labeling was costing the company sales revenue.

Lawyers for POM filed a lawsuit against Coca-Cola under the Lanham Act, a law that allows a competing company to sue a rival for allegedly engaging in unfair competition through a false or misleading product description.

Coca-Cola responded to the suit by arguing that POM’s Lanham Act lawsuit was precluded by a different statute, the federal Food, Drug, and Cosmetic Act. The FDCA bars the misbranding of food, including through deceptive labels. It is enforced by the Food and Drug Administration.

Lawyers for Coca-Cola argued that it was the exclusive authority of the FDA to police allegations of deceptive labels.

A federal judge agreed with Coca-Cola, ruling that POM could not sue under the Lanham Act over a label dispute.

A panel of the Ninth US Circuit Court of Appeals affirmed the district judge’s ruling.

In reversing that decision on Thursday, the Supreme Court said the two statutes – the Lanham Act and the FDCA – are not mutually exclusive. Rather, they serve different purposes and impose different requirements and protections.

“The Lanham Act and the FDCA complement each other in major respects,” Justice Anthony Kennedy wrote for the court in an 8 to 0 decision.

“Although both statutes touch on food and beverage labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety,” Justice Kennedy said.

Kennedy said that Congress did not intend for the FDCA to preclude Lanham Act lawsuits such as POM’s.

“The position Coca-Cola takes in this Court that because food and beverage labeling is involved it has no Lanham Act liability here for practices that allegedly mislead and trick customers, all to the injury of competitors, finds no support in precedent or the statutes,” Kennedy wrote.

Justice Stephen Breyer did not take part in the case.

The case was POM Wonderful LLC v. Coca-Cola Co. (12-761).