The Supreme Court on Thursday served POM Wonderful a victory, ruling the California-based company can sue Coca-Cola over an allegedly mislabeled juice drink.
In an 8-0 decision, with Justice Stephen Breyer recusing himself, the court agreed POM Wonderful could sue its competitor under the federal Lanham Act. The law permits civil action against anyone who “misrepresents the nature, characteristics or qualities” of the goods being sold.
“Competitors who manufacture or distribute products have detailed knowledge regarding how consumers rely upon certain sales and marketing strategies,” Justice Anthony Kennedy wrote. “Their awareness of unfair competition practices may be far more immediate and accurate than that of agency rulemakers and regulators.”
Lanham Act lawsuits, Kennedy added, “draw upon this market expertise by empowering private parties to sue competitors to protect their interests on a case-by-case basis.”
POM Wonderful is owned by Stewart and Lynda Resnick, reported by Forbes magazine to be billionaires. The couple’s agricultural ventures, through their Roll Global holding company, include major citrus, almond and pistachio orchards in addition to pomegranate operations in California’s San Joaquin Valley.
The company has carefully cultivated a healthy image for pomegranate products; sometimes, in aggressive ways that have drawn skeptical assessments from the Federal Trade Commission. Those label challenges, though, were not at stake in the case decided Thursday.
Instead, in September 2007, Coca-Cola delivered its “Pomegranate Blueberry” product. It contains about 99.4 percent apple and grape juices, tinted with 0.3 percent pomegranate juice, 0.2 percent blueberry juice, and 0.1 percent raspberry juice.
A lower appellate court had rejected POM Wonderful’s suit, concluding that the federal Food and Drug Administration had effectively pre-empted labeling oversight. In its ruling Thursday, the Supreme Court said otherwise.
“If Lanham Act claims were to be precluded then commercial interests, and indirectly the public at large, could be left with less effective protection in the food and beverage labeling realm than in many other, less regulated industries,” Kennedy wrote.