Flickr/Luke Michael
In 2014, POM took Coca-Cola to the Supreme Court and won the war. But last week it finally lost the battle

Commentary

Let’s give a shout-out to POM Wonderful, a juice which achieved a potentially important Supreme Court victory for entrepreneurs, while on its way to losing an eight-year legal battle with Coca-Cola.

POM, of course, grows pomegranates and produces a line of pomegranate juices and other beverages, including a pomegranate-blueberry blend. Back in the late 2000s, Coke’s Minute Maid division, like several of its Big Juice competitors, introduced pomegranate products of its own. They weren’t high-powered, don’t-spare-the-pomegranate products like POM’s mix of 85 percent pomegranate juice and 15 percent blueberry juice. Minute Maid’s, for instance, contained just 0.3 percent pomegranate juice and 0.1 percent blueberry juice, while 99-plus percent of the product was apple and grape juice.

In 2008 POM launched a raft of lawsuits. The database of the website Courthouse News Service includes 20 POM suits against other juice manufacturers. They didn’t go well. POM lost its suit against Tropicana and Ocean Spray. It persuaded jurors that Welch had misled customers about how much pomegranate was in its juice blend, but not that it had suffered economic consequences. That left Minute Maid, which Pom claimed had cost it $77.5 million in sales.

In 2014, POM took Coca-Cola to the Supreme Court and won the war. But last week it finally lost the battleThe law POM relied on in its suit was the 1946 Lanham Act, which is the law behind most trademark litigation in this country, but also permits lawsuits between competitors on several other grounds, including false advertising. That was what POM set out to prove. It’s easy to see its point: The Minute Maid label has the words “pomegranate” and “blueberry” in big, bold capital letters, along with a big picture of a pomegranate and smaller pictures of other fruits. In much smaller print, the label goes on to say, “flavored blend of 5 juices,” and then in even smaller type, “from concentrate with added ingredients.”

Here’s the thing: Under FDA’s regulation, that’s a perfectly legal way to describe the product. It’s accurate. It just requires people to read ten additional words and ignore the obvious intention of making the pomegranate picture the largest one on the label. Is that deceptive?

You want us to write an opinion that said that Congress enacted a statutory scheme because it intended that no matter how misleading or deceptive a label it is, if it passes the FDA, there can be no liability.

Doesn’t matter, said Coca Cola’s lawyers. The label is legal under FDA regs, so no lawsuit is possible. The Food, Drug, and Cosmetics Act trumps Lanham. The Ninth Circuit Court of Appeals agreed, POM appealed, and in 2014 the case went to the Supreme Court.

There are some technical aspects to the case that I can’t do justice to (though the folks at the indispensable SCOTUSblog have done a terrific job of summing them up). But in the end, the court seemed to agree with a point Justice Kennedy made to Coke’s lawyer during oral arguments: “You want us to write an opinion that said that Congress enacted a statutory scheme because it intended that no matter how misleading or deceptive a label it is, if it passes the FDA, there can be no liability. That’s what you want us to say?”

If so, Coke was disappointed. In June 2014, the Court found that POM had a right to sue under Lanham and kicked the case back to the Ninth Circuit.

Legal labeling and advertising isn’t necessarily fair, and if your company is damaged by unfair advertising, you’ve got the right to fight back in court.

The decision is potentially very important. It says, in effect, that legal labeling and advertising isn’t necessarily fair, and that if your company is damaged by unfair advertising, you’ve got the right to fight back in court. You kind of had that right already, though someone inevitably was going to make the FDA-trumps-Lanham argument. Now that’s out of the way. (On the other hand, it means that you may find yourself on the receiving end of a suit from a competitor, and you might find yourself needing to change an FDA-compliant label because a competitor objects. But let’s be optimistic.)

Of course, fighting is one thing. Winning is another. And POM didn’t win. Last week a jury in California found for Coca-Cola. They may have been influenced by Coke’s argument that its product didn’t compete with POM Wonderful’s—that its product was in the juice case and POM Wonderful’s was off with the exotics like Acai and Goji, and that its juice cost one-fifth as much as POM’s. The proof of economic damages sounds like it was confusing and perhaps not all that persuasive. And it couldn’t have helped that Coke’s lawyers were able to argue that POM has “dirty hands” because the Federal Trade Commission had ordered it to stop making heath claims about its products until it could provide evidence from human clinical trials.

So here’s to POM. We thank you for making the world just bit fairer for the little guy (maybe). We condole with you on your loss. We lift a glass of 100 percent pomegranate juice in your honor.

And for those of you who disagree and would prefer to lift a glass of Minute Maid Pomegranate Blueberry instead, you can’t. It was discontinued in 2014. Poor sales.

Patrick Clinton

Patrick Clinton is a long-time journalist and educator. He edited the Chicago Reader during the politically exciting years that surrounded the election of the city’s first black mayor, Harold Washington; University Business during the early days of for-profit universities and online instruction; and Pharmaceutical Executive during a period that saw the Vioxx scandal and the ascendancy of biotech. He has written and worked as a staff editor for a variety of publications, including Chicago, Men’s Journal, and Outside (for which he ran down the answer to everyone’s most burning question about porcupines). For seven years, he taught magazine writing and editing at Northwestern University's Medill School of Journalism.

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