Coca-Cola Defeats POM Wonderful’s Misleading Labeling Claims: A Key Takeaway For Food and Beverage Manufacturers

What can you call a fruit juice made of 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice? It depends on the flavor. And according to FDA and a California jury, calling a pomegranate-blueberry flavored fruit juice "Enhanced Pomegranate Blueberry Flavored 100% Juice Blend" is just fine. On March 21, 2016, a California jury in POM Wonderful LLC v. The Coca-Cola Company, Case No. 2:08-cv-06237 (C.D. Cal.) rejected POM Wonderful's allegations that the labeling for The Coca-Cola Co.'s pomegranate-blueberry juice blend (which complied with FDA labeling requirements) was, nevertheless, misleading because the juice contained only 0.5% pomegranate and blueberry juices. We had blogged about previous developments in the case here.

The unanimous jury verdict is the culmination of a nearly eight-year legal battle between POM Wonderful and The Coca-Cola Co. over the name and labeling of Coca-Cola's pomegranate-blueberry flavored juice blend. POM, a manufacturer and seller of competing pomegranate-blueberry juice products, brought suit under the Lanham Act alleging unfair competition arising from Coca-Cola's allegedly misleading product label. While Coca-Cola's juice product contains pomegranate and blueberry juice, it mostly consists of apple and grape juice.

POM's Lanham Act claims were originally dismissed by the district court on the ground that claims based on labeling regulated by FDA pursuant to its authority under the Federal Food, Drug and Cosmetic Act (FDCA) are preempted by that Act. In June 2014, the Supreme Court cleared the way for POM's Lanham Act claims alleging that the name and label of Coca-Cola's juice blend mislead consumers, holding that a competitor like POM may bring Lanham Act claims that allege that food and beverage labels that are regulated by the FDA under the FDCA also violate the Lanham Act.

At trial, POM's lawyers argued that the prominence of a pomegranate picture on the label, coloring of the juice to resemble pomegranate juice, and font size of "Pomegranate Blueberry" on the product's label all showed that Coca-Cola's labeling misled consumers into thinking they were purchasing a beverage with more than 1% pomegranate and blueberry juices. Coca-Cola's lawyers told the jury that Coca-Cola's label was literally true and followed the labeling guidelines set by the FDA in its implementing regulations. After less than a day of deliberations, the jury returned a special verdict finding that POM did not prove by a preponderance of the evidence that the label or packaging of Coca-Cola's juice product, even if literally true, nevertheless misled a substantial portion of consumers.

This is not POM's first time suing competitors over their allegedly deceptive product labels. In 2010 and 2011, California juries also sided with POM's competitors, Ocean Spray Cranberries, Inc. and Tropicana Products, Inc., finding that POM had not shown that Ocean Spray's labeling for its pomegranate-cranberry juice blend or Tropicana's labeling for its pomegranate-blueberry juice drink were misleading. And we had previously blogged here about POM's lawsuit against Welch Foods Inc. in which the jury found that Welch had deceptively marketed its white grape pomegranate juice product but that POM had not proven its lost sales.

The POM v. Coca-Cola jury verdict is considered a win for many manufacturers in the food and beverage industry, particularly in an environment where misleading labeling lawsuits brought by competitors or putative classes are increasingly common. It also provides an opportunity an important reminder that, when faced with threats of litigation, consumer products companies need not necessarily underestimate consumers' ability to understand packaging labels. Food and beverage labeling lawsuits often settle quickly, but the POM verdict should give manufacturers some courage (and ammunition) to push back.

© Arnold & Porter Kaye Scholer LLP 2016 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.