US Supreme Court Food Labeling Decision May Aid California Consumer Protection Class Actions

On April 21, 2014, the U.S. Supreme Court heard an argument in POM Wonderful LLC v. Coca-Cola Co. The lawsuit by POM Wonderful alleges Coca-Cola mislabeled its Minute Maid Pomegranate Blueberry juice blend, engaging in unfair competition. POM argued that Coca-Cola had violated the Lanham Act by labeling its product “Pomegranate Blueberry,” despite the product consisting of approximately 99% apple and grape juice, and only 0.3% pomegranate juice and 0.2% blueberry juice.

POM argued that consumers were likely to be deceived by Coca-Cola’s labels, which prominently read “Pomegranate Blueberry,” stating “Flavored Blend of 5 juices” in much smaller font. POM contends that consumers will purchase the less expensive of the two products if they believed they are the same, as Coca-Cola’s labeling suggests. This seems like a fairly straight-forward argument, but both the California federal court and the Ninth Circuit Court of Appeals held that the Coca-Cola product’s name and labeling complied with FDA regulations designed to prevent deceptive labeling and that POM’s claims under the Lanham Act may not “usurp, preempt or undermine FDA authority.”

The U.S. Supreme Court did not agree. The Supreme Court has not issued its ruling yet, but according to  SCOTUSblog, we can expect a unanimous reversal of the Ninth Circuit ruling. Apparently, Justice Kennedy slammed Coca-Cola’s arguments that federal labeling laws were designed to promote uniformity, protecting companies like Coca-Cola from unfair competition laws, even for product “labels that cheat the consumers like this one did.” Justice Kennedy went on to say “I think it’s relevant for us to ask whether people are cheated in buying the product. Because Coca-Cola’s position is to say even if they are, there’s nothing we can do about it.” Chief Justice Roberts seemed to agree, stating a “label that fully complies with the FDA regulations” could also be “misleading on the entirely different question of commercial competition… that has nothing to do with health.”

While this lawsuit focuses on competing federal statutes, the Food Drug and Cosmetic Act and the Lanham Act, the outcome will doubtless affect consumer protection class actions brought under State law as California’s consumer protection statutes contain prohibitions similar to the “likelihood of confusion” language contained in the Lanham Act.

If you or someone you know has purchased a falsely advertised or mislabeled product, you may be entitled to relief. Please call Khorrami Boucher, LLP for a confidential consultation.