Monthly Archives: March 2016

Jury Finds in Favor of Coca-Cola in POM False Advertising Suit

UPDATE:  The jury found in favor of Coca-Cola and against POM Wonderful in the trial over whether Coca-Cola misled consumers into believing that Coke’s “Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Blend” contained more than a very small amount of pomegranate juice.  The jury deliberated for less than one day following a six-day trial.

Coke’s position was primarily that (1) pomegranate juice has a strong taste and a small amount imparts flavor and (2) consumers understand the difference between a juice’s featured flavor and its ingredient statement.  POM, in contrast, argued that Coca-Cola’s labeling gave it an unfair competitive advantage because pomegranates have unique health benefits sought by consumers who were misled into believing they could obtain those benefits in Coca-Cola’s “100%” juice-blend product.  Although this case puts a damper on POM’s avowed intent to “clean up the industry,” POM’s success at the Supreme Court and shifting public opinion on labeling are likely to curtail the labeling practices of similar products in the foreseeable future.

GMO Labeling Bill Stalls in U.S. Senate

Yesterday, the U.S. Senate failed to pass a bill sponsored by the chairman of the Senate Agriculture Committee, Pat Roberts (Rep. Kansas), that would prohibit state labeling laws and create federal standard for voluntary labeling of GMO for genetically modified products.  The bill would have blocked Vermont from implementing its first-in-the-nation mandatory GMO labeling law that is set to take effect on July 1st.   In reference to Vermont’s law, Senator Roberts has said, “The time to act is now.”  The Roberts bill failed to get the 60 votes needed to move forward. The measure failed to pass a procedural vote by a tally of 48-49.

The Senate bill is similar to the Safe and Accurate Food Labeling Act that passed the U.S. House on July 23, 2015, by a vote of 275-150, including support from 45 Democrats.  Among other things, the House bill would amend the Federal Food, Drug, and Cosmetic Act to (1) set forth standards for any food label that contains claims that bioengineering was or was not used in the production of the food, (2) preempt any state and local labeling requirements with respect to bioengineered food, (3) require the FDA to issue regulations setting standards for natural claims on food labels, and (4) preempt any state or local regulations that are not identical to the requirements of the Act. Certification would be voluntary and would allow companies to advertise their foods as GMO-free. The bill’s proponents contend that the bill protects against a patchwork of state GMO labeling laws while ensuring that all Americans’ desire to know what’s in their food is respected.  Critics have labeled the bill “the Dark Act” because they contend it would keep Americans in the dark as to the ingredients in their food.

With regard to the stalled Senate bill, many commentators believe that a compromise could still be reached between Senator Roberts and “industry friendly” Democrats.

Compromise would be difficult, however, between the Roberts’ bill and a separate labeling bill introduced by Senate Democrats on March 2, 2016 — the Biotechnology Food Labeling and Uniformity Act.  That bill requires manufacturers to disclose the presence of GMO’s on a product’s Nutrition Fact Panel and provides several choices to Manufacturers for how to comply.   Senators Jeff Merkley (D. Ore.), Patrick Leahy (D. Vt.), Jon Tester (D. Mont.) and Dianne Feinstein (D. Calif.), who introduced the bill, call it a common-sense compromise that would likewise not burden manufacturers with a patchwork of state regulations while also providing important information to consumers.  Of course, mandatory labeling of GMO ingredients is at the heart of this debate and this is a likely sticking point for both sides.

Accordingly, expect continued Congressional activity and debate on this issue over the next few months in light of the Vermont law scheduled to go into effect on July 1st.

 

Jury Trial Starts Today in POM v. Coca-Cola

POM Wonderful’s battle with Coca-Cola is nearing an end as a federal jury trial starts today in the long-running dispute.  The case involves a now discontinued Coca-Cola product called “Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Blend,” which both parties agree contained 99.4% apple and grape juices, with very little  pomegranate or blueberry juice.  In June 2014, the Supreme Court rejected Coca-Cola’s argument that labels specifically authorized and deemed “not misleading” by regulations issued by the FDA pursuant to the Federal Food Drug and Cosmetic Act precludes any claim brought under the Lanham Act’s general prohibition against “misleading” statements.

Notably, Coca-Cola is seeking to argue that POM’s “unclean hands” precludes any award of damages.  This affirmative defense relates to POM’s allegedly deceptive advertising practices that were the subject of an FTC Commission opinion. The trial judge has ruled, however, that the FTC ruling cannot be considered as evidence in this regard.

In 2010, another federal jury found that Welch Foods, Inc. deceptively marketed a “100% Juice White-Grape and Pomegranate” product that contained little pomegranate juice, but also found that POM did not prove that it had suffered any damages as a result.  If POM again fails to show that it suffered damages then it might undermine future efforts by companies to file suit over questionable marketing practices by competitors.  Generally, obtaining an order requiring a competitor to stop such marketing practices is sufficient motivation but here, of course, the product at issue has already been discontinued.