California’s POM Wonderful takes on Coke over pomegranate juice
04/11/2014 4:24 PM
04/11/2014 4:24 PM
Some of the nation’s pre-eminent lawyers are now fighting over pomegranate juice.
Soon, the Supreme Court will taste the tang, too, in a conflict that pits California’s politically well-connected POM Wonderful against soda giant Coca-Cola. It’s a labeling dispute, and then some.
“Coca-Cola and its industry supporters are asking for dispensation from the rules applicable to the rest of the national economy,” POM Wonderful’s attorneys declared in a brief filed Friday.
Put simply, the case being heard April 21 concerns whether POM Wonderful can sue Coca-Cola over the soda maker’s labeling of a “Pomegranate Blueberry” product that’s primarily apple and grape juice.
But many legal kibitzers have bellied up to the bar, underscoring how the case is about more than POM Wonderful’s careful cultivation of the pomegranate’s reputation. Alaska and nine other states, for instance, joined a brief supporting the Los Angeles-based POM Wonderful, citing worries over federal pre-emption of state laws.
From the other side, the heavy hitters at the 300,000-member U.S. Chamber of Commerce weighed in for Coca-Cola, promoting the virtues of uniform federal regulations.
The high-octane lawyers involved likewise reflect the high stakes.
Seth Waxman, the Clinton administration’s solicitor general, represents POM Wonderful. Coca-Cola’s counsel is Kathleen Sullivan, a former dean of the Stanford Law School whose name has previously been floated as a potential Supreme Court nominee.
Yet another former solicitor general, Republican favorite Paul Clement, authored a brief supporting Coca-Cola on behalf of the American Beverage Association. For the legal cognoscenti, this may sound raise bittersweet memories.
Clement formerly worked for Coca-Cola’s traditional law firm, King & Spalding. Clement resigned from the firm in 2011 after it reversed its decision to defend the conservative Defense of Marriage Act. The law firm buckled under pressure from gay rights advocates and, reportedly, clients including Coca-Cola.
Clement’s 31-page amicus brief supporting Coca-Cola nonetheless suggests there is no bad aftertaste.
“Perhaps the nation’s most famous secret formula would not be a secret if (Coca-Cola) had to display on its label precisely what flavors went into making a Coke a Coke,” Clement’s brief states.
POM Wonderful is owned by Stewart and Lynda Resnick, reported by Forbes magazine to be billionaires. The couple’s agricultural ventures, through their Roll Global holding company, include major citrus, almond and pistachio orchards in addition to pomegranate operations in California’s San Joaquin Valley.
About 32,000 acres of pomegranates are planted in California, more than 10 times the acreage planted in 1976. Kern County, the heart of the Resnick’s farming empire, leads all other counties in pomegranate production.
The couple cultivates political allies, as well. Since 2010, Stewart and Lynda Resnick have contributed more than $475,000 to federal candidates and parties, Federal Election Commission records show.
Through POM Wonderful, the couple has systematically crafted a distinct reputation for pomegranates. Some of their marketing efforts, including claims that pomegranates can fend off prostate cancer or heart disease, have been disputed by the Federal Trade Commission.
The company is currently appealing the FTC’s deceptive-advertising conclusions. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments in the Federal Trade Commission case on May 2.
A different labeling question confronts the Supreme Court, with roots going back several years.
In September 2007, Coca-Cola served up its “Pomegranate Blueberry” product. It contains about 99.4 percent apple and grape juices, tinted with 0.3 percent pomegranate juice, 0.2 percent blueberry juice, and 0.1 percent raspberry juice.
A year later, POM Wonderful sued Coca-Cola under the federal Lanham Act. The law permits civil action against anyone who “misrepresents the nature, characteristics or qualities” of the goods being sold.
A lower appellate court rejected the suit, concluding that the federal Food and Drug Administration had effectively pre-empted labeling oversight.
“As best we can tell, Coca-Cola’s label abides by the requirements the FDA has established,” Judge Diarmuid O’Scannlain, a Reagan administration appointee, wrote for the 9th U.S. Circuit Court of Appeals. “The FDA has concluded that a manufacturer may name a beverage using the name of a flavoring juice that is not predominant by volume.”
POM Wonderful argues that the FDA’s regulations do not preclude false-advertising lawsuits filed by competitors.
“Coca-Cola’s product and its label, taken as a whole, mislead consumers and damage POM,” Waxman’s brief states, adding that “the Ninth Circuit’s approach would leave regulation of misrepresentations made in connection with produce labeling almost entirely in the hands of the FDA.”
Coca-Cola counters that allowing POM Wonderful to sue would “disrupt the national uniformity Congress has required in the naming and labeling of food and juice products.” The company says the 1946 Lanham Act permitting lawsuits is effectively constrained by other laws governing labels.
“Congress recognized that private suits would beget a worse problem by subjecting food manufacturers to a patchwork of constantly shifting standards across the country,” Sullivan’s brief states.