Supreme Court to Hear Coca-Cola, Pom Wonderful Spat

WASHINGTONThe U.S. Supreme Court has agreed to hear a dispute between Pom Wonderful LLC and The Coca-Cola Company in a case that will examine whether the Food, Drug, and Cosmetic Act (FDCA) bars a false-advertising claim under a separate federal law.

In 2008, Pom Wonderful accused Coca-Cola of duping consumers into believing Coca-Cola's "Pomegranate Blueberry" juice beverage contained mostly pomegranate and blueberry juices when it actually consisted mainly of less expensive apple and grape juices. According to Pom Wonderful, Coca-Cola's beverage is only comprised of 0.3% pomegranate juice and 0.2% blueberry juice.  

Four years later, a federal appeals court ruled that the FDCA and its regulations prohibited name and labeling claims under the Lanham Act, which authorizes lawsuits against defendants who use false or misleading descriptions about any goods.

The Supreme Court on Friday granted a petition for writ of certiorari to hear the case. Justices Samuel Alito and Stephen Breyer did not take part in the decision to grant the petition.

We are confident our labeling fully complies with applicable FDA regulations, as the lower courts have consistently found," a spokesman for Coca-Cola said in a statement Monday. "The Court of Appeals issued a well-reasoned decision rejecting Pom's claims as meritless, and we look forward to the Supreme Court's careful review of that decision."

Pom Wonderful expressed optimism that the Supreme Court will rule in its favor, "sending a clear message to all food companies that they cannot engage in false advertising through their product labels."

"The court of appeals' decision undermines the transparency that health-conscious consumers rightly expect so they can make informed decisions about what they eat and drink," the company said in a statement.  

In the May 17, 2012 order, the U.S. Court of Appeals for the 9th Circuit held that Pom Wonderful could not challenge the moniker Coca-Cola gave its juice because U.S. Food and Drug Administration (FDA) regulations authorized the name. Pom Wonderful's request to force Coca-Cola to reduce the size of the words "Pomegranate Blueberry" on labeling also would "undermine the FDA's regulations and expert judgments," 9th Circuit Judge Diarmuid O'Scannlain wrote in the decision by three judges.

"Despite speaking extensively to how prominently required words or statements must appear, the FDA has not (so far as we can tell) required that all words in a juice blend's name appear on the label in the same size or that words hew to some other standard that Pom might have us impose," O'Scannlain stated.  

The 9th Circuit's decision, if affirmed, "will have the practical effect of leaving food labels almost entirely unregulated" because FDA has scant resources to enforce labeling, Pom Wonderful argued in its December 2012 petition asking the Supreme Court to review the case.

"Under the Ninth Circuits ruling, so long as products meet the FDAs minimum requirements, manufacturers can label them in any manner, without regard to whether their labeling deceives consumers," Pom Wonderful argued in its brief.

Coca-Cola countered that FDA has adopted comprehensive regulations on labeling of juice products.

"Second, allowing private litigants to challenge FDA's labeling determinations by suing their competitors under the Lanham Act would lead to more confusion, not less," argued Coca-Cola.

The 9th Circuit not only disregarded a decision from the high court that allegedly competing federal statutes like the FDCA and Lanham Act must be given full effect unless they are in "irreconcilable conflict", its order conflicted with the rulings of three other appeals courts, Pom Wonderful argued.   

"Those courts have all held that false labeling or advertising claims are actionable under the Lanham Act notwithstanding federal regulation of the labeling or advertising," Pom Wonderful noted in its Supreme Court brief. "Under those circuits precedents, Poms claim that Coca-Colas label misleads consumers would not be barred because it is not an attempt by a private party to enforce the FDCA, which is prohibited by the plain text of the statute."

Coca-Cola denies that the 9th Circuit's decision conflicts with Supreme Court precedent or rulings from other federal appeals courts.

A Supreme Court decision in the Coca-Cola/Pom Wonderful dispute is expected in June following arguments in April.