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Big win for Coke at Supreme Court could really upset apple cart, says attorney

By Elaine WATSON , 18-Apr-2014
Last updated on 18-Apr-2014 at 20:54 GMT

Peter Arhangelsky: 'A broad decision against POM could upset the apple cart and ripple into the consumer class action realm'
Peter Arhangelsky: 'A broad decision against POM could upset the apple cart and ripple into the consumer class action realm'

As POM Wonderful squares up with Coca-Cola at the Supreme Court in a high-profile false advertising case, one leading food law attorney says a broad win for Coca-Cola could have significant repercussions for the trade.

To recap: POM has filed a suit under the Lanham Act alleging that Coke is “willfully misleading consumers" by marketing a Minute Maid juice comprised almost entirely of apple & grape juice as ‘Pomegranate Blueberry'; Coke, meanwhile, says it complies with federal labeling laws and POM should not be able to impose its own standards (click HERE for full details).

FoodNavigator-USA caught up with Peter A. Arhangelsky, a principal in the Arizona office of law firm Emord & Associates, to find out what is at stake.

If the Supreme Court sides with Coke …

Technically, the Supreme Court - which will hear oral arguments on this case Monday - has a fairly narrow remit, says Arhangelsky.

Specifically, it must decide whether a juice manufacturer with a product name and label compliant with federal labeling laws can still be slapped with a false advertising suit by a rival under the Lanham Act (a law for commercial litigants, not consumers).

Consumers are already allowed to sue companies for false advertising under state consumer protection laws such as California’s Unfair Competition Law, so technically, the Supreme Court’s decision in POM v Coke shouldn’t impact consumer lawsuits, says Arhangelsky.

Sweet music for dietary supplement and food manufacturers?

However, “a broad decision against POM could ripple into the consumer class action realm”, he predicts.

Peter Arhangelsky: Regardless of the outcome in the POM v Coke case at the Supreme Court, a pure false advertising claim will remain available to consumers

“A decision against POM might leave FDA the exclusive arbiter of all labeling concerns, and that would trickle down to the state-level consumer actions. 

 “A decision that the FDCA trumps the Lanham Act might suggest that federal law trumps related state laws, which are the foundation for consumer claims. That would be sweet music for dietary supplement and food manufacturers, who presently face unlimited exposure to shakedown lawsuits.”

A SCOTUS decision against POM could raise questions about state sovereignty over food labeling enforcement

In California, for example, consumers have sued firms such as Coca-Cola and PepsiCo under the state’s Unfair Competition Lawand argued that labeling violations were actionable under the state’s Sherman law (which mirrors the federal Food, Drug & Cosmetic Act), he says.

Defendants challenged that approach because the Sherman laws basically adopt the federal law verbatim. A claim under the state law is essentially a claim under the federal law. But the Courts rejected preemption challenges, in part, because the federal labeling laws were not intended to occupy the field (e.g., field preemption). 

“Now a Supreme Court decision against POM could upset that applecart, and force state courts to reconsider whether the state laws still have similar effect. Such a decision would raise significant questions about state sovereignty over food labeling enforcement.”

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

And if POM prevails….

But what if the Supreme Court sides with POM Wonderful?

“A decision for POM will increase the universe of claims available in competitor suits,” says Arhangelsky

“However, state-level consumers do not need a favorable decision in POM to bring their expansive challenges of labeling statements. Regardless of the outcome, a pure false advertising claim will remain available to consumers.”

And what will probably happen…

So what’s the most likely outcome?

A half-way house, predicts Arhangelsky: “The Supreme Court is likely to choose an approach that preserves private claims which do not directly conflict with federal policies or regulations.

“To hold that private litigants cannot use the Lanham Act to challenge any aspect of product labeling would be extreme and surprising.” 

Click HERE to read more analysis on this case from other leading food law experts.

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