Supreme Court seems inclined to bolster truth-in-labeling laws
WASHINGTON — In a case that could strengthen truth-in-labeling laws, Supreme Court justices on Monday voiced deep skepticism about Coca-Cola’s Pomegranate Blueberry juice that is 99.4% apple and grape juice, saying the name would probably fool most consumers, including themselves.
The high court is hearing an appeal from Stewart and Lynda Resnick of Los Angeles, makers of a rival pomegranate juice called Pom Wonderful, who complained that the name of the Coca-Cola product, sold under the Minute Maid brand, is false and misleading.
“Coke intentionally designed a label that grossly misleads consumers,” said former Solicitor Gen. Seth Waxman, who is representing Pom Wonderful. “[T]he total amount of blueberry and pomegranate juice in this product can be dispensed with a single eyedropper. It amounts to a teaspoon in a half-gallon.”
At issue is whether federal law permits selling a product with a name or a label that is almost sure to mislead consumers, and how much latitude manufacturers have in marketing.
Pom Wonderful, which says its product contains 100% pomegranate juice, complained that Coca-Cola’s Pomegranate Blueberry juice is mostly a blend of apple and grape juice, and contains only 0.3% pomegranate juice, 0.2% blueberry juice and 0.1% raspberry juice.
When Coca-Cola’s New York attorney, Kathleen Sullivan, said consumers are not so “unintelligent” that they would fail to understand that many juice drinks are a blend of different fruits, Justice Anthony M. Kennedy objected.
“Don’t make me feel bad, because I thought this was pomegranate juice,” he said, prompting laughter in the courtroom.
Turning serious, Kennedy said Coca-Cola was effectively asking for a right to “cheat consumers,” even though a federal law known as the Lanham Act forbids selling products with a “false or misleading description.”
The lopsided argument suggested the court will revive Pom Wonderful’s lawsuit and strengthen the federal ban on false advertising.
A federal judge in Los Angeles and the U.S. 9th Circuit Court of Appeals in San Francisco had dismissed the suit earlier. Those judges said a separate federal law regulating food and drugs gave juice makers wide freedom to label their juice drinks, as long as the actual ingredients are disclosed.
But that argument gained little traction Monday. Justice Sonia Sotomayor said Coca-Cola may be permitted to use the label under the food and drug laws. “But why are you permitted to use it in a misleading way?” she asked Sullivan.
Justice Ruth Bader Ginsburg picked up on the same point. Food and drug laws protect the health and safety of consumers, she said, but the law against false advertising protects them from being fooled by misleading labels.
Allison Zieve, a lawyer for consumer watchdog Public Citizen, said a high court ruling could have a broad effect on product labels.
“If Pom wins, the result will be better, less misleading labels on a range of food products,” she said.
The decision would “make clear that food companies can police one another to ensure honesty in the marketplace,” Zieve said. “That would create a strong incentive for food companies to review their labels to make sure that they are not misleading.”
Though Pom Wonderful may be headed for a win at the Supreme Court, it too is battling claims of product misrepresentation.
Last year, the Federal Trade Commission upheld an administrative judge’s finding that the makers of Pom Wonderful made exaggerated claims about the health benefits of pomegranate juice.
The agency said Pom Wonderful falsely suggested that its juice could be effective in treating heart disease and prostate cancer. Next week, a federal appeals court is set to hear Pom Wonderful’s appeal of the FTC decision.
Lawyers said most food companies look to detailed regulations issued by the Food and Drug Administration and feel confident if their labels comply with those rules.
“They knew the magic words were ‘flavored’ and ‘juice blend,’” said Dale Giali, a Los Angeles lawyer with Mayer Brown. “But if Pom wins, that way of doing business could be exploded.”
FDA regulations had another advantage for food companies. Though the federal rules could not be enforced through private lawsuits, injured parties could sue companies under the Lanham Act’s prohibition against false advertising and other business activities.
“A decision in favor of Pom would open the door to a lot of new food-labeling claims,” said Thomas Williams, a Chicago lawyer with Ulmer & Berne.
The Supreme Court is expected to hand down its decision on Pom’s false-advertising suit against Coca-Cola by late June.
