The Supreme Court has unanimously ruled juice maker Pom Wonderful can sue Coca-Cola (KO) for deceptive advertising in a long-running case that centers around the proper label usage for pomegranate-blueberry juice.
The justices rules 8-0 that Pom, which makes and sells pomegranate juice products, can sue larger rival Coca-Cola under a provision of the Lanham Act, which allows one competitor to sue another if it alleges unfair competition arises from false or misleading product descriptions.
Pom, which originally filed its lawsuit in 2008, has alleged Coca-Cola’s Minute Maid juice blend that prominently displayed the words “pomegranate blueberry” was misleading because the product contained just 0.3% pomegranate juice and 0.2% blueberry juice. Pom had alleged the advertising, label and name of the Minute Maid juice led to “confusion” that caused Pom to lose sales.
Coca-Cola’s claims were favored by lower courts. The beverage giant had asked the courts to evaluate Federal Food, Drug, and Cosmetic Act and Food and Drug Administration regulations over the Lanham Act. While the FDCA and the Lanham Act both involve food and beverage labeling, the former protects public health and safety while the latter involves unfair competition, the court said.
Ultimately, the Supreme Court reversed a decision by the Court of Appeals for the Ninth Circuit, saying Congress didn’t intend the FDCA to prevent Lanham Act suits such as Pom’s.
In a prepared statement, Coca-Cola said it intends to “defend against Pom’s claims that our labeling is misleading.”
“The evidence at trial will show that our product was not the cause of Pom’s poor sales,” Coca-Cola said.
Pom called the Supreme Court’s ruling “a real victory for consumers.”
“The unanimous court ruling will translate into higher assurance for consumers that the labels on beverage and food are accurate,” Pom said in a statement. “We believe that when people better understand what they are consuming, they can make healthy and more informed decisions about what they buy.”
Justice Breyer took no part in the consideration or decision of the case.
