By Diane Bartz WASHINGTON Mon Apr 21, 2014
(Reuters) – U.S. Supreme Court justices grilled a lawyer for Coca-Cola Co on Monday, asking why a juice label touting the presence of pomegranates and blueberries should not be considered misleading if the drink contained just a trace of the fruits.
Coca-Cola argued that it could not be sued over the labeling of one of its Minute Maid juice products because the label complies with rules of the Food and Drug Administration, which oversees some aspects of labeling for processed foods and drinks.
POM Wonderful, which makes a product that is 100 percent pomegranate juice, had filed suit against Coca-Cola, claiming the Minute Maid juice label was misleading and would hurt sales for its own product.
The Minute Maid juice is sold as a “Pomegranate Blueberry Flavored Blend of 5 Juices.” It is mostly apple and grape juice with just 0.3 percent pomegranate juice and 0.2 percent blueberry juice, according to a POM court filing.
Attorney Kathleen Sullivan, who argued for Coca-Cola, said the company could not be sued by POM for being “misleading” under the Lanham Act, which is designed to protect trademarks.
Chief Justice John Roberts appeared to disagree: “I don’t know why it’s impossible to have a label that fully complies with the FDA regulations and also happens to be misleading on the entirely different question of commercial competition, consumer confusion that has nothing to do with health.”
Pomegranate and blueberries are popular with health-conscious Americans because they contain antioxidants that some believe prevent cancer and heart disease, although the science behind that belief is unclear.
The question of whether the labeling is misleading drew sharp questions.
Justice Anthony Kennedy said, “I think it’s relevant for us to ask whether people are cheated in buying this product.”
Sullivan said consumers were sophisticated enough to know that when they see a food label containing the word “flavored” that other juices would be in the bottle.
Justice Anthony Kennedy shot back: “Don’t make me feel bad because I thought that was pomegranate juice.”
Kennedy also raised the question of “whether people are cheated in buying this product.”
Justice Sonia Sotomayor agreed with Kennedy, saying: “You’re permitted to use this name under their (FDA) regulations. But why are you permitted to use it in a misleading way?”
Sullivan took exception to the justices’ statements. “Coke’s label is as a matter of law not misleading,” she said.
Justice Ruth Bader Ginsburg, addressing a related issue, argued that the FDA has a huge job.
“Labels for juices are not really high on its list. It has very limited resources. You are asking us to take what it has said about juice as blessing (on) this label,” she said.
Kennedy agreed: “It is doubtful that FDA has sufficient resources to police food and beverage labeling.”
In a parallel fight, the Federal Trade Commission has accused POM of making health claims for its juices that the company cannot substantiate. POM is appealing.
Shares of Coca-Cola closed at $40.75, up 0.07 percent, on the New York Stock Exchange.
The case at the Supreme Court is POM Wonderful LLC v. The Coca-Cola Company, No. 12-761.
(Reporting by Diane Bartz; Editing by Ros Krasny and Leslie Adler)