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Jury Clears Coca-Cola of Unfair Competition in Pomegranate Juice Row

New-Development-IconBy Kate T. Spelman

On Monday, jurors in the Pom Wonderful v. The Coca-Cola Company trial handed a victory to the defendant, clearing Coca-Cola of wrongdoing in connection with the labeling and marketing of its Enhanced Pomegranate Blueberry Flavored 100% Juice Blend drink.  Pom Wonderful LLC, etc. v. The Coca-Cola Company, etc., et al, CV 08-06237 (C.D. Cal. Mar. 21, 2016).  Pom Wonderful, which manufactures pomegranate blueberry juice and other pomegranate-based beverages, filed its lawsuit against Coca-Cola in 2008.  Pom alleged that Coca-Cola violated both the federal Lanham Act and California’s consumer protection statutes by labeling its juice blend as “pomegranate blueberry,” when in fact the beverage was made up primarily of apple and grape juice.  Pom claimed that it had lost sales to the tune of $77 million because Coca-Cola was able to undercut Pom’s pricing while misleading consumers into purchasing Coca-Cola’s pomegranate blueberry juice drink on the mistaken belief that the product contained more pomegranate and blueberry juice than it in fact did.  However, the jury rejected Pom’s theory of the case, perhaps influenced by Coca-Cola’s argument that Pom itself was guilty of deceptively marketing its products as heart healthy without sufficient support for such claim. 

This lawsuit resulted in a number of noteworthy decisions, at one point going up to the U.S. Supreme Court on the question of whether the labeling regulations authorized by the Food, Drug, and Cosmetic Act (“FDCA”) precluded Pom’s Lanham Act claim to the extent the claim imposed obligations on Coca-Cola that were not identical to the obligations imposed by the FDCA.  The Ninth Circuit had found that the FDCA precluded Pom’s claims, but the U.S. Supreme Court reversed, holding that competitors may challenge labeling statements as misleading even when expressly authorized by the FDCA.  The U.S. Supreme Court rejected the argument that the FDCA and its regulations serve as “a ceiling on the regulation of food and beverage labeling,” clearing the way for Lanham Act unfair competition claims challenging conduct that comports with the FDCA.

Pom has been relatively aggressive in seeking to quash what it perceives as unfair competition in the pomegranate juice market, bringing similar lawsuits against other competitors including Ocean Spray Cranberries, Inc. and Welch Foods Inc.  However, Pom has found little success in the courts.