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.

Wal-Mart Seeks Dismissal of “Pork and Beans” False Advertising Lawsuit

On October 7, 2015, a putative class action lawsuit was filed against Wal-Mart Stores Inc. and Wal-Mart Stores East, LP (collectively “Wal-Mart”) in the U.S. District Court for the Central District of California.  The lawsuit alleges breach of warranty, unjust enrichment, and violations of California, Pennsylvania and New Jersey law.

Plaintiffs allege that Wal-Mart’s store-brand Great Value Pork and Beans in Tomato Sauce does not actually contain pork. They allege that “rigorous scientific testing, including microscopic and chemical analysis, has revealed that the product contains no pork whatsoever” and that the labels for each and every can of these products is false and misleading.

On January 27, 2016, Wal-Mart filed a motion to dismiss the complaint, asserting that “Plaintiffs concede that the label on Great Value Pork & Beans in Tomato Sauce states very clearly that the product ‘contains less than 2%’ of pork” and that Plaintiff’s test results are therefore not surprising.  Wal-Mart’s motion continues:

If Plaintiffs relied on testing that was not sensitive enough to detect an ingredient that was less than 2% of a product, then the fact that their testing failed to detect pork does not mean that pork is not an ingredient in the product at issue. Thus, without more detail, Plaintiffs’ allegation – that because their testing was unable to detect pork in the product means it does not contain pork – is logically fallacious, an invalid inference.

Put differently, Wal-Mart alleges that the Complaint is too vague and conclusory with regard to the testing that allegedly occurred.  Wal-Mart further argues:

In essence, at least as currently pled, Plaintiffs are alleging that the product at issue does not contain enough pork to use the name “Great Value Pork & Beans in Tomato Sauce.” But such an allegation is preempted – federal law mandates that this product include the work “pork” in its title if it contains any pork.

Thus, Wal-Mart’s motion is based on two key arguments.  First, that Plaintiffs’ allegation about testing lacks specificity and is thus not facially plausible because it does not plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”  In this regard, Wal-Mart ties its argument to Plaintiffs’ alleged concession that the product contains less than 2% pork but fails to include allegations regarding the sensitivity of the alleged testing.  Second, Wal-Mart notes that Plaintiffs’ Complaint refers to FDA documents that establish that “pork and beans” is the “common or usual name of canned beans packed in sauce and that has been prepared with even relatively small quantities of pork.”  Accordingly, Wal-Mart argues that, so long as its product includes very small quantities of pork, federal regulations necessarily require that it be labeled as “pork and beans” and Plaintiffs’ claims are thus preempted.  In fact, Wal-Mart specifically argues that “the [Nutrition Labeling and Education Act of 1990] actually requires Wal-Mart to label its Pork & Beans product as ‘pork and beans’ because that is the ‘usual or common name’ of the product.”

This case is definitely worth watching and I’ll provide an update with the court’s ultimate ruling.

Update: FDA Approves “Just Mayo” Label

I’ve previously written about Hampton Creek’s JUST MAYO product that has been the target of a lawsuit and an FDA warning letter because the brand name did not meet the federally-regulated standard of identity for mayonnaise, which requires it contain eggs.  But the FDA has now agreed to approve a revised version of the label that retains the brand name so long as the phrase “egg-free” is higher on the label and in larger font, and it includes the phrase “spread and dressing.”  Please see my comments on this development in Food Navigator’s article here.

It’s Been Re-Confirmed – Recipes are not Subject to Copyright Protection

The Sixth Circuit Court of Appeals has re-confirmed, once again, that recipes are not subject to copyright protection.  The ruling originated from a suit filed by Rosemarie Carroll against Larry Moore and others for copyright infringement and other state law claims associated with a restaurant and catering business that Carroll and Moore previously co-owned.  In that prior venture, Moore conceived and developed the recipes for the menu.  In 2007, Carroll and Moore parted ways with Carroll purchasing Moore’s interest in the businesses and with Moore signing an agreement which specified that Moore return “all originals and copies of . . . menu files and development ideas, recipes (current and historical) and training tools.”

Subsequently, Carroll created and obtained a registered copyright on the “Tomaydo-Tomahhdo Recipe Book” that was assembled based on the recipes that Moore developed for the restaurant.  In the lawsuit, Carroll alleged that Moore and other defendants copied the recipes and used them for their catering business.

On October 20, 2015, the Sixth Circuit upheld the district court’s dismissal of the copyright claim finding that the cookbook was not creative enough for protection.  At the outset, the Sixth Circuit noted that the cookbook was a compilation and only subject to copyright protection if it is original, meaning that it has some creative aspect.

Plaintiff argued that its recipe book was creative because (1) Moore’s trial-and-error process for developing recipes embodies the selection, coordination, and arrangement necessary to demonstrate creativity, and (2) its menu was purposefully ordered a particular way, each item on the menu existed because Carroll and Moore specifically chose it, and the items were chosen in coordination with each other.

Both arguments were rejected.  The Sixth Circuit’s ruling was anchored to the long-standing rule that the recipes themselves do not enjoy copyright projection because the list of ingredients is merely a factual statement.  And a recipe’s instructions, as functional directions, are statutorily excluded from copyright protection pursuant to 17 U.S.C. § 102(b).  Given that, the court found that plaintiff did not point to anything demonstrating that the recipe book is an original compilation.  With respect to purposefully selecting and arranging the menu items, the Court noted that Carroll never identified what is original and creative about that process.  Rather, that argument merely characterized how recipes are developed and further perfected.  The court further held that plaintiff’s assertion that the menu items are purposefully coordinated with each other was doomed because she never identified any creative manner by which they are.  Accordingly, the plaintiff had no copyright interest in the book.

Notably, courts have found that cookbooks can be copyrighted as original compilations if authors “lace their directions for producing dishes” with creative content such as stories about times the dish was made.

Welch’s Fruit Snacks Violate “Jelly Bean Rule” Alleges New Class Action Lawsuit

A class action lawsuit has been filed against Welch Foods, Inc. alleging that it is misrepresenting the fruit content and the nutritional and health qualities of its fruit snacks.  The case was filed on September 18, 2015 and is pending as case no. 1:15-cv-05405 in the U.S. District Court for the Eastern District of New York.

Specifically, plaintiffs allege that Welch deceived consumers by suggesting that Welch’s Fruit Snacks contain significant amounts of the fruits depicted in the marketing and on the labeling of the products, are nutritious and healthful to consume, and are more healthful than similar products.  In this regard, plaintiffs highlight that the product labels include the claim that the Fruit Snacks are “Made With REAL Fruit” and include images “of the characterizing fruit.”  Moreover, they allege that claims such as contains “100% Vitamin C,” “25% Vitamins A & E,” and “no preservatives” are representations that the Fruit Snacks are healthy.

But the products are not healthy, according to plaintiffs, because the products allegedly “contain only minimal amounts of the vibrantly depicted fruits, and are no more healthful than candy.”  Those depicted fruits, plaintiffs allege, “are not the predominant ingredient or even the most prominent fruit in the” Fruit Snacks which actually “contain significant amounts of sweeteners and added sugars, as well as artificial flavors and artificial colors.”

Notably, Plaintiff’s specifically alleged that the Fruit Snacks or misbranded under FDA regulations because Welch fails to display the true percentage of the fruits used in the product name on the front label in violation of 21 C.F.R. §102.5(b).  That provision requires a product to “include the percentage(s) of any characterizing ingredient(s) or component(s) when the proportion of such ingredient(s) or component(s) in the food has a material bearing on price or consumer acceptance or when the labeling or the appearance of the food may otherwise create an erroneous impression that such ingredient(s) or component(s) is present in an amount greater than is actually the case.”

In addition, Plaintiff’s assert that the Fruit Snacks violate the FDA’s Fortification Policy (known as the “jelly bean rule”) which provides that the FDA “does not encourage indiscriminate addition of nutrients to foods, nor does it consider it appropriate to fortify . . . sugars; or snack foods such as candies . . . .”  21 C.F.R. §104.20(a).   In this regard, Plaintiffs further allege that if Welch “had not … fortified the Fruit Snacks with vitamins A, C, and E, they could not claim that these sugary snacks were a nutritious, vitamin-rich food.”

In response to the Complaint’s allegations, Promotion in Motion, which makes the snacks under license for Welch Foods,  issued the following statement: “It is a fact that fruit, whether in the form of juices or more recently purees, has always been the first ingredient in Welch’s Fruit Snacks.  Our labeling is truthful and gives consumers the information they need to make informed decisions.  For nearly 15 years, we have been proud to bring consumers snacks made with the highest quality ingredients, that consistently meet and even exceed quality standards and FDA regulation.”

This case underscores the continuing risks associated with marketing products that include real fruit (including fruit juices) but also added sugar and other ingredients.  Food companies naturally want to include imagery highlighting the fruit flavors associated with a product and highlight that the products include real fruit.  And fortification can help make a product more healthy and attractive to consumers.  On the other hand, plaintiff’s attorneys are quick to attack such marketing as detailed above.  This case also has echoes of the  class action over Coca-Cola’s Vitaminwater which settled last year, where the central allegation was that the product’s name and labeling were misleading because many of the flavors contained negligible amounts of fruit juice and were predominantly made up of water and sugar.