Supreme Court’s Juice Decision Could Open the Door to New Litigation

Juice maker POM Wonderful manufactures 100% pomegranate juice and other juice products made primarily from the pomegranate fruit. Since its founding in 2002, the company has reached a growing market of health-conscious consumers who are willing to pay a premium for the claimed health benefits of the pomegranate fruit.

In 2008, POM filed a deceptive labeling claim against a competing juice manufacturer arguing that its label, which prominently displayed the words “pomegranate blueberry” despite containing less than half of a percent of these juices, was deceptive and misleading under Section 43 the Lanham Act. Section 43 is a federal statute which allows one competitor to sue another if it alleges unfair competition arising from false or misleading product descriptions. The competitor countered that Section 43 of the Lanham Act is precluded by the Federal Food, Drug, and Cosmetic Act (FD&C Act), which provides for federal regulation of the misbranding of food, including by means of false or misleading labeling.

The District Court and Ninth Circuit Court of Appeals held that POM could not proceed on a private cause of action against its competitor. The Supreme Court, however, reversed these decisions in a unanimous 8-0 ruling, holding that the Lanham Act does in fact create a private cause of action to challenge a food label even though it is regulated by the FD&C Act. The Court then remanded the case to the trial court to determine if the marketing was actually deceptive or misleading.

Moving forward, manufacturers must ensure that their labels and marketing not only comply with federal food guidelines, but also do not create false or misleading descriptions in the eyes of a jury. Failure to do so could lead to costly civil liability from market competitors seeking to protect their brand’s reputation from unfair competition.

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