Coca-Cola Loses Huge False Advertising Case In The Supreme Court

Pomegranate drink labelMinute MaidThe controversial label in question.

Juice company POM Wonderful picked up a major victory Thursday at the Supreme Court when the justices ruled that it could continuing pursuing its claims that Coca-Cola misled consumers about how much much pomegranate juice is in its Minute Maid-brand Pomegranate Blueberry drink.

The drink is just 0.3% pomegranate juice and 0.2% blueberry juice. However, Coca-Cola had argued that since Food and Drug Administration rules said calling the product “a flavored blend of five juices” was not misleading, the company could not be sued by a competitor under the Lanham Act (a federal law that allows companies to sue their rivals for false advertising).

The decision will give beverage companies more wiggle room in the future to sue competitors that they feel are tricking customers into buying their products.

Click here to read the court’s full opinion >>

Though a California district court and the Ninth Circuit Court of Appeals agreed with Coca-Cola’s logic, the Supreme Court said the Lanham Act and the Food and Drug Administration rules have two distinct purposes. The court ruled that “the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety.”

As a result, the court overturned the district and appellate courts and is ordering the district court to once again consider POM Wonderful’s mislabeling claims.

“The Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety,” the court wrote in an 8-0 decision (Justice Breyer did not participate). “Congress did not intend the FDCA to preclude Lanham Act suits like POM’s.”

The ruling will also be something of a blow to American Beverage Association, a soft drinks trade group that has come out in support of Coca-Cola in the case.

In a brief submitted to the Supreme Court, the group said that allowing POM’s Lanham Act claims to survive would “severely undermine the FDA’s expert judgments and uniform national standards regarding beverage labelling” and deprive beverage companies of “clear guidance about how to design labels that comply with the law.”

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