Published on April 22nd, 2014 | by Jennifer Kaplan0
Supreme Court Hears Misleading Advertising Case POM v. Coca-Cola
Is a juice label mentioning the presence of pomegranates and blueberries misleading if the drink contains only a trace of the fruits? That is the question before the U.S. Supreme Court this week as it takes up POM Wonderful LLC v. The Coca-Cola Company.
POM Wonderful, which makes 100% pomegranate juice, had filed suit against Coca-Cola, claiming its Minute Maid juice labels are misleading and would hurt sales for its POM products and the lawsuit has made it to the U.S. Supreme Court.
Coca-Cola argued that it could not be sued over the labeling of its Minute Maid juice products because the label complies with rules of the FDA, which oversees some aspects of labeling for foods and beverages. The Minute Maid juice in question is sold as a “Pomegranate Blueberry Flavored Blend of 5 Juices.” It is mostly apple and grape juice with just 0.3% pomegranate juice and 0.2% blueberry juice, according to a POM court filing. Coca-Cola has been sued over Minute Maid labels in the past, but this new lawsuit has brought the debate to a new level. (As a side note, its a bit ironic that POM is leading the charge on this lawsuit since POM has been found by the FTC to be guilty of making false and misleading health claims .)
Back to POM v. Coca-Cola. Several Justices pointed out the obvious that although Coca-Cola is permitted to use the product name and label under FDA regulations, but they are not permitted to use it in a misleading way. Chief Justice John Roberts said:
“I don’t know why it’s impossible to have a label that fully complies with the FDA regulations and also happens to be misleading on the entirely different question of commercial competition, consumer confusion that has nothing to do with health.”
Not surprisingly, Coca-Cola’s lawyers continued to argue the legality of the label. Coca-Cola, like many food and beverage makers who use consumer confusion to their benefit, want to keep the conversation focused on the legality of the labels. This lawsuit, is similar to several recent food and beverage manufacturers being sued because of false advertising of “natural” or “all-natural” claims. The question of whether certain labeling is misleading — rather than illegal — is at the crux of the lawsuit. The Justices went as far as to ask whether consumers were being “cheated.”
When Coca-Cola’s lawyer said consumers were sophisticated enough to know that when they see a food label containing the word “flavored” that other juices would be in the bottle, Justice Kennedy replied: “Don’t make me feel bad because I thought that was pomegranate juice.”
Thank goodness someone of authority is finally separating the legality of misleading labels — or the regulatory gap as I like to call it — from the fraud. Natalie Naugle, senior associate in Morrison & Foerster’s San Francisco office, suggests that “the decision could put an end to the recent explosion of consumer class action food-mislabeling litigation involving state law claims.” She also notes, however, that another outcome “… would likely only add to the confusion and uncertainty currently faced by food companies whose labels are arguably FDCA compliant, but who are nonetheless faced with private actions challenging the contents of those labels.”
It looks like we will have to wait and see if the highest court in the nation will — or even can — stop companies from deceiving consumers with misleading labels. I’m guessing its not as simple as that.