Coca-Cola Co. (KO) must defend against
accusations that it deceived consumers about the amount of
pomegranate juice in one of its beverages, as the U.S. Supreme
Court revived a lawsuit by rival drink-maker POM Wonderful LLC.
The unanimous ruling gives companies a greater role in
policing competing product labels for misleading advertisements.
The justices said private parties can press false-advertising
suits under a federal law known as the Lanham Act even when the
U.S.
Food and Drug Administration regulates a product.
The FDA “does not have the same perspective or expertise
in assessing market dynamics that day-to-day competitors
possess,” Justice
Anthony Kennedy wrote for the court. “Lanham
Act suits draw upon this market expertise by empowering private
parties to sue competitors to protect their interests on a case-by-case basis.”
The label on Coca-Cola’s drink says “Pomegranate Blueberry
Flavored Blend of 5 Juices,” with the first two words appearing
in larger letters. A lower court had said FDA juice-labeling
regulations authorized the Coca-Cola product’s name.
POM Wonderful says the label is misleading because the
drink contains only 0.3 percent pomegranate juice and 0.2
percent blueberry juice. Apple and grape juice constitute 99
percent of the juice, POM Wonderful says.
Fruit Blend
Atlanta-based Coca-Cola says the label accurately tells
consumers that the product is a blend of fruits and tastes like
pomegranate and blueberry.
“We respect the court’s decision and remain committed to
clear labeling that fully complies with FDA regulations,” Coca-Cola said in an e-mailed statement. “We intend to defend
against POM’s claims that our labeling is misleading, and the
evidence at trial will show that our product was not the cause
of POM’s poor sales.”
POM Wonderful called the ruling “a real victory for
consumers.” The decision “will translate into higher assurance
for consumers that the labels on beverage and food are
accurate,” the company said in an e-mailed statement.
Los Angeles-based POM Wonderful is a unit of Roll Global
LLC, which is closely held by Stewart and Lynda Resnick.
POM Wonderful is separately fighting accusations over its
own advertising. In a case now pending at a federal appeals
court, the Federal Trade Commission says POM is deceiving
consumers with claims about the health benefits of its
pomegranate drinks.
Personally, I think the POM television ad is ... well, nice:
I mean, Minute Maid claims to nourish your brain with their (not-so) pomegranate drink. POM nourishes something else, apparently.
