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POM v Coca-Cola false advertising spat heads to Supreme Court, but what does this mean for your label?

By Elaine Watson+

18-Apr-2014
Last updated on 01-May-2014 at 03:58 GMT2014-05-01T03:58:33Z

POM v Coca-Cola false advertising spat heads to Supreme Court, but what does this mean for your label?

It’s not quite as dramatic as the Oscar Pistorius trial, but in the world of food law, a false advertising case brought by POM Wonderful against rival Coca-Cola is being followed just as closely. And all eyes will be on the Supreme Court on Monday, when both sides will present oral arguments. 

So what’s the case about? And why is it being scrutinized so carefully?

On the attack there is POM, which is suing Coca-Cola for false advertising under the Lanham Act, alleging it is “willfully misleading consumers” by marketing a Minute Maid juice comprised almost entirely of apple and grape juice as ‘Pomegranate Blueberry' (this is followed by the phrase, 'Flavored Blend of 5 Juices' in smaller type underneath). Despite the name, says POM, the beverage contains just 0.3% pomegranate juice, 0.2% blueberry juice, 0.1% raspberry juice, and 99.4% apple & grape juice. 

In the defense there is Coca-Cola, which says its labels comply with federal labeling laws governing flavored juice blends and that private plaintiffs such as POM should not be able to "impose their own idiosyncratic naming and labeling standards", a view shared by both the district court and the 9thCircuit Court of Appeals. 

On Monday, the case heads to the Supreme Court to decide who is right.   

Decision could have a significant impact on consumer class actions in the space

From a legal perspective, the case focuses fairly narrowly on fruit juice labeling and whether the Lanham Act - a federal false advertising law typically invoked in disputes between rivals - trumps the Federal Food, Drug & Cosmetic Act (FDCA) and the Nutrition Labeling and Education Act of 1990 (NLEA).

However, legal experts contacted by FoodNavigator-USA predict the Supreme Court’s decision - due by the end of June - will have a far broader impact on the deluge of consumer class action food-labeling cases, even though consumers are not allowed to bring claims under the Lanham Act.

They also point out that the 9th circuit decision on the case (which sided with Coke) has already been cited in scores of consumer class action cases, although not every judge has interpreted it in the same way. 

The extent of the impact will depend on the scope of the Supreme Court’s decision, but the ramifications could be big, said Ivan Wasserman, partner at Manatt Phelps & Phillips in Washington DC.

If the decision… goes to the general rights of any private party to challenge claims that appear on food product labels, then it could have a significant impact on consumer class actions in the space.”

And even if the focus is just on the Lanham Act, in the event of a POM victory, he added, “competitors could certainly reevaluate cases they wanted to bring but did not because they assumed they were pre-empted by FDA rules.”

POM argues that even if FDA regulations cover specific aspects of a label, such as the name of a multi-juice product, it does not necessarily follow that they cover other aspects of the label, such as what message is communicated by the label in its entirety

The most likely scenario is that the Court will opt for the middle ground

Arnold Friede, senior food and drug law attorney with Sandler, Travis & Rosenberg, P.A in Miami, said it was hard to imagine how things could get much worse for food and beverage firms if POM prevails, given that companies are already under constant threat of litigation under state consumer protection laws, especially in California.

Coke says its label clearly states that the beverage is a blend of five fruit juices, while the picture on the front of the pack shows apples, grapes and raspberries as well as pomegranates and blueberries

How can there be a greater deluge of food false advertising litigation than we are currently seeing? Right now it’s ‘pouring’. Can it rain harder than ‘pouring rain’?”

But if Coke prevails, could this spell the end of the tidal wave of lawsuits alleging that even if food and beverage labels meet the letter of the law, they can still be deemed misleading?

While many food companies would dearly love the Supreme Court to crystallize the FDA’s role as the primary authority over food labeling, however, it is “highly unlikely” that it will agree with Coke that the FDCA totally trumps the Lanham Act, he said.

The most likely scenario, predicted Friede, is that the Court will opt for the middle ground, “whereby only those aspects of a label subject specifically to a discrete FDA regulatory requirement and in compliance with that requirement, will be insulated from a Lanham Act challenge”.

But he added: “We don’t know for sure whether the Supreme Court will clear things up or just muddy the waters.”

Both sides will probably claim victory , whatever the outcome

August T. Horvath, an advertising law attorney at Kelley Drye & Warren LLP, agreed that whatever the Supreme Court decides, it’s unlikely to provide absolute clarity from a legal perspective for firms facing class action lawsuits from consumers alleging false advertising.

Indeed, whatever happens, both sides will probably claim victory, he predicted.

“The ultimate question is how aggressively does the government have to regulate something to make it off limits to litigation?”

Click HERE to read all the court documents relating to this case.

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