The hard-charging California company behind POM Wonderful pomegranate juice is facing a two-front legal fight.
On the East Coast, the juice maker crosses swords with the Federal Trade Commission. An appellate court’s recent refusal to reconsider an earlier ruling against POM Wonderful plants the possibility of a climactic challenge going to the nation’s highest court.
“At present, we are just continuing to evaluate our options,” Steven Clark, The Wonderful Co.’s vice president for corporate communications, said in an email.
On the West Coast, thanks to a previous and unrelated Supreme Court victory, the company is preparing to take its would-be competitors at the Coca-Cola Co. to trial next year.
Both cases involve claims of deceptive marketing, but with one big difference: POM Wonderful is playing defense in one case and offense in the other.
Only a small number of companies will shoulder the expense of taking deceptive advertising cases to trial.”
Attorneys for POM Wonderful
In the nation’s capital, the company has been defending itself against an FTC ruling that it made misleading health claims in its advertising between 2003 and 2010.
The full U.S. Circuit Court of Appeals for the District of Columbia Circuit on May 28 denied the company’s request for a rehearing of a Jan. 30 decision by a three-judge panel that largely upheld the trade commission.
“POM touted medical studies ostensibly showing that daily consumption of its products could treat, prevent, or reduce the risk of various ailments, including heart disease, prostate cancer, and erectile dysfunction,” Judge Sri Srinivasan wrote in the Jan. 30 decision. “Many of those ads mischaracterized the scientific evidence concerning the health benefits of POM’s products.”
On June 15, the appellate judges issued the formal order to the FTC effectively finalizing the decision. Whether or not the parent company, formerly known as Roll Global and now newly renamed The Wonderful Co., makes a final appeal to the Supreme Court by an Aug. 28 deadline, its legal struggle against regulators already has been remarkably robust.
“Only a small number of companies will shoulder the expense of taking deceptive advertising cases to trial, given that the trial and primary appeal all occur before the agency itself,” POM Wonderful’s attorneys noted in an appellate court brief.
The Wonderful Co. describes itself as a $4 billion firm and is owned by Southern California residents Stewart and Lynda Resnick. Their agricultural ventures include major citrus, almond and pistachio orchards, in addition to pomegranate operations in California’s San Joaquin Valley.
To help make its case in D.C., POM Wonderful hired attorney Tom Goldstein, founder of the popular SCOTUSblog website and a frequent advocate before the Supreme Court. Goldstein argued four cases during the high court’s recently completed 2014 term. Only Solicitor General Donald Verrilli Jr. appeared more often.
In Los Angeles, the company is using its own in-house legal team and others to attack Coca-Cola for its allegedly deceptive marketing of the Minute Maid brand’s “Pomegranate Blueberry Flavored Blend of 5 Juices.” The blend contained only 0.3 percent pomegranate juice and 0.2 blueberry juice.
An 8-0 Supreme Court decision last year, with Justice Stephen Breyer recusing himself for reasons that have not been made public, enabled POM Wonderful to continue its lawsuit against Coca-Cola under the federal Lanham Act, which involves trademark protections.
“I think it’s relevant for us to ask whether people are cheated in buying this product,” Justice Anthony Kennedy said of Coca-Cola’s juice during the April 2014 oral argument, further citing “labels that cheat the consumers like this one did.”
After several long detours, the lawsuit first filed in 2008 is now set for trial in federal court in Los Angeles starting next March.
It should be an interesting case.”
U.S. District Judge S. James Otero
Part of Coca-Cola’s defense is to claim that POM Wonderful’s own history of making questionable health claims gives the company “unclean hands” that undermine its accusations against Coca-Cola.
“The Federal Trade Commission’s decision and the D.C. Circuit’s affirmance really make this one of the great frauds in American history,” Coca-Cola attorney Steven A. Zalesin said of POM Wonderful during a March 9 court hearing, a transcript shows. “This is a multibillion-dollar company that built the entire business on a fiction.”
The trial judge demurred, saying he “wouldn’t characterize this as one of the great frauds in American history,” but he granted one point both sides could agree upon.
“It should be,” U.S. District Judge S. James Otero said, “an interesting case.”