A juicy legal battle between the makers of two rival fruit drinks can continue, as the Supreme Court on Thursday said POM Wonderful may proceed with a false advertising lawsuit against Coca-Cola.
The case involves conflicting federal laws — consumer health vs. copyright — and has broad ramifications regarding which ones have the ultimate say in determining if product labels are false or misleading.
In an 8-0 decision, the justices agreed with POM Wonderful's concerns about Coke's labeling of a drink that says “Pomegranate Blueberry Flavored Blend of 5 Juices,” with the first two words in larger letters. The label also refers to the drink, marketed under Coke's Minute Maid division, as a "100 percent juice product."
POM Wonderful, which produces its own pomegranate-based juice, says 99 percent of Coke's juice is either apple or grape. The Los Angeles company says Coke is deceiving the public into thinking the drink's primary ingredients are pomegranate and blueberry juice.
Coke says the label accurately tells consumers the drink is a blend of fruits and tastes like pomegranate and blueberry.
Lower courts had ruled in favor of Coke because the label conforms to Food and Drug Administration laws and regulations.
But the Supreme Court said that although the label might comply with FDA rules, it is misleading.
Justice Anthony Kennedy, in writing the opinion for the court, said it's unlikely that Congress intended FDA law designed to protect consumer health and safety to result in "less policing" of misleading food and beverage labels than in other industries.
"Congress intended [FDA and trademark laws] to complement each other with respect to food and beverage labeling," he said.
Justice Stephen Breyer didn't take part in the case. As is the high court's custom, he gave no reason.
The food and beverage industry has watched the case closely, expressing concern that a ruling in favor of POM Wonderful could subject food makers to more litigation.
The unanimous ruling wasn't a big surprise, as justices from different ideological bents appeared to side with POM Wonderful during oral arguments in the case in April.
Justice Samuel Alito at the time said consumers are interested in the health benefits of pomegranates and have a right to know the drink contains only 0.3 percent juice from the fruit.
The court’s decision may have implications beyond beverage labeling, as other federal agencies have some say over advertising in the particular industries that they regulate. For example, the Federal Deposit Insurance Corp. and the Federal Reserve have some say in banking advertisements, and the Federal Communications Commission has at times had some say in telecommunications advertising.
"While each case would need to be decided on its own facts, the POM Wonderful decision would likely make it harder for a [trademark infringement] defendant in the banking industry or telecommunication industry to persuade a court that it is protected from false-advertising suits because its particular advertising practice had not been specifically prohibited by FDIC banking regulations or FCC telecommunications regulations," said B. Brett Heavner, an intellectual property lawyer with Washington's Finnegan law firm.