WASHINGTON — The Supreme Court on Thursday sided with juice-maker Pom Wonderful in its long false-advertising dispute with Coca-Cola, a decision that could open the door to more litigation over deceptive food labeling.
The justices ruled 8-0 that Pom can go forward with a lawsuit alleging the label on a “Pomegranate Blueberry” beverage offered by Coke’s Minute Maid unit is misleading because 99 percent of the drink is apple and grape juice.
Lower courts had ruled in favor of Coke because the label conforms to the law and to Food and Drug Administration rules. But the Supreme Court said the juice label may technically comply with FDA rules but may still mislead consumers for different reasons.
Justice Anthony Kennedy, who wrote the opinion, appeared to have telegraphed his position in April, when he said at oral argument that the label even misled him into thinking the drink was mostly pomegranate juice. His opinion Thursday focused on the juice’s details, noting that the product contained only 0.3 percent pomegranate juice, 0.2 percent blueberry juice and 0.1 percent raspberry juice.
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Kennedy said the law governing regulation of food and drug labels does not preclude a competitor from suing under a different law — the Lanham Act — for unfair competition based on false or misleading claims. He said federal food and trademark laws complement each other in the regulation of misleading labels.
Justice Stephen Breyer took no part in the case. Consistent with its usual practice, the court did not say why he had disqualified himself.
The court also rejected Coke’s argument that allowing a deceptive-labeling claim would interfere with national uniformity under FDA laws. Kennedy said Congress chose to allow challenges under trademark law “to enforce a national policy to ensure fair competition.”
Pom, which faces deceptive-advertising claims of its own, sued Coke in 2008 after it began losing market share to Minute Maid’s “Pomegranate Blueberry Flavored Blend of 5 Juices” drink. The drink’s label shows the words “Pomegranate Blueberry” in much larger type than the rest of the phrase and includes a prominent picture of large pomegranate set among other fruits.
The 9th U.S. Circuit Court of Appeals ruled in favor of Coke, finding that food-labeling laws preclude private lawsuits under trademark law.
The food and beverage industry had expressed concerns that a ruling for Pom would lead to greater uncertainty about labeling requirements and lead to a flurry of new lawsuits.
In a statement, Pom’s parent company Roll Global said the decision “will translate into higher assurance for consumers that the labels on beverage and food are accurate.”
Coke said it would defend against Pom’s lawsuit and show “that our product was not the cause of Pom’s poor sales.”
In a separate case, the federal government has filed a deceptive-advertising case against Pom for claiming that its pomegranate juice can treat or prevent heart disease, prostate cancer and other illnesses. The Federal Trade Commission’s action is pending at the U.S. Court of Appeals for the D.C. Circuit.
Material from The New York Times is included in this report.