Monthly Archives: March 2015

Lanham Act Claim Targeting Nestlé’s “Poland Spring” Bottled Water Dismissed For Lack of Standing

Last summer, Maine Springs LLC filed a false advertising suit over the use of “Poland Springs” on bottled water sold and distributed by Nestle Waters North America Inc. (a unit of Nestle SA).   Yesterday, however, a Maine district court dismissed the lawsuit, holding that Maine Springs’s plans to eventually sell bottled water that would compete against Nestle’s Poland Spring® brand product was too speculative to constitute injury-in-fact.

Maine Springs LLC, based in Poland Springs, Maine, sells bulk water and aspires to produce and sell its own bottled water.   In its Complaint against Nestle, it alleged two sets of related, but distinct, facts.

First, Maine Springs alleged that Nestle had previously asserted that Maine Springs could not identify the source of its water, Poland Spring, Maine, without creating confusion with Nestle’s “Poland Spring” products.  Accordingly, Nestle demanded that Maine Springs not use any label that would identify Poland Spring, Maine as the source of its water.  Maine Springs responded by noting that, as a matter of federal and state law, bottled water must identify its source on the label.  When an amicable resolution could not be reached, Maine Springs alleged that it lost proposals to supply bulk water to several companies based on fears that Nestle might file suit.  As a result, Maine Springs alleged that it was “prevented from selling any of its water and the bottling and distribution facilities have sat idle.”

Second, Main Springs’s alleged that Nestle was engaged in false advertising because the water contained in the Poland Spring products was not “extracted from the [actual] Poland Spring,… does not even come from the same aquifer as the original source,” “does not necessarily come from carefully selected mountain springs that are continually replenished, as advertised, but from other sources including ground water and well water,” and was “sold as 100% natural spring water when it is not.”

In light of the second set of allegations, Main Springs alleged a claim under Section 43(a) the Lanham Act for false advertising which included the following allegation on damages:  “As a direct and proximate result of Nestle Water’s misrepresentations about Poland Spring® Brand water, competitors, such as Plaintiff Maine Springs, have and continue to suffer damage.”   And Main Springs alleged a second claim for tortious interference regarding the first set of facts which included the following damages allegation: “As a result of Defendant’s interference, Plaintiff has suffered actual damages in that it is being prevented from entering the market and selling its product.”

The Court granted Nestle’s motion to dismiss both claims.  With respect to the Lanham Act claim, the Court labeled Maine Springs’s damages allegation as a “bald and conclusory assertion [that] alone is insufficient to state an injury.” Construing all facts in the Complaint in the most favorable light for the plaintiff, the Court further found that the “allegedly false advertising or false designation of origin cannot have harmed Maine Springs by channeling customers toward Poland Spring® Brand water when Maine Springs has not even begun to offer bottled water.”  Moreover,  although the rejection of supply proposals was viewed as concrete and particularized, and is a sufficient injury at the pleading stage of litigation, the Court held that Maine Springs did not establish that this injury was fairly traceable to Nestle’s alleged false advertising.  Thus, Maine Springs did not establish causation and there was not Article III standing.

In light of its dismissal of the Lanham Act claim, the Court refused to exercise supplemental over the state law claim and it was dismissed without prejudice.

Wal-Mart Targeted with False Advertising Class Action Over Pomegranate-Cranberry Juice

Great-Value

To no one’s surprise, the POM Wonderful v. Coca-Cola ruling from the U.S. Supreme Court has inspired class action lawsuits against similar fruit blends. The crux of the claim is essentially the same, as highlighted in the following allegations:

Defendant strategically and purposely misleads the consuming public to believe that the Product is, or at a minimum, primarily consists of, cranberry and pomegranate juice.  The Product’s label prominently displays the words “CRANBERRY POMEGRANATE,” while at the same time down plays the other words in smaller and thinner font that reveal the juice is actually a flavored juice blend from concentrate, primarily consisting of water and cheap white grape juice concentrate, apple juice concentrate, and plum juice concentrate.  The names o f the cheap juices are not identified on the front of the label.  Cranberries and pomegranates are prominently depicted on the Product’s label, while none of the other cheaper juices are even pictured on the Product’s label.

Plaintiff’s allege claims under Florida’s Deceptive and Unfair Trade Practices Act, and common law claims for negligent misrepresentation and unjust enrichment.

Notably, the central holding of the Supreme Court’s POM Wonderful v. Coca-Cola ruling is that a federal Lanham Act claim between competitors is not precluded by FDA regulations under the Food, Drug and Cosmetic Act (FDCA) because these acts complement, rather than contradict, each other — and claims under the Lanham Act are thus not precluded by regulations under the FDCA.  That reasoning does not apply to the Wal-Mart case which involves state law claims that do not involve competitors.

Accordingly, the plaintiffs in Wal-Mart have an entire section of their complaint titled “Plaintiff’s Claim is Not Preempted” which alleges as follows in an effort to to ride the coattails of the Supreme Court ruling while attempting to avoid preclusion.

The Supreme Court of the United States has ruled on this issue.  Plaintiff’s claim is predicated on the fact that the naming, labeling, and marketing are misleading, deceptive, and unfair according to Florida’s Food Safety Act, but only in regards to the provisions that are identical in material aspects to the FFDCA or FDA regulations already imposed by the Federal Government.

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A simple reading of the plain language of the Florida’s Food Safety Act and the FFDCA shows that Plaintiffs claims do not seek to contest or enforce anything in Florida’s Act that is beyond the FFDCA or FDA regulation requirements.  Instead, Plaintiff’s claims are predicated on the fact that Defendants’ naming, labeling, and marketing are misleading, deceptive, and unfair according to Florida’s Food Safety Act, but only in regards to the provisions that are identical in material aspects to the FFDCA.

Whether this contention holds up in light of any potential motion to dismiss remains to be seen.  A copy of the Complaint may be found here.