Ninth Circuit Mostly Sides With Coke in Pomegranate Juice Wars

A federal appeals court has rejected Pom Wonderful LLC’s claims that its rival, The Coca-Cola Co., violated federal trademark law in naming and labeling its Pomegranate Blueberry drink, which contained little to no pomegranate juice.

The ruling by the U.S. Court of Appeals for the Ninth Circuit was the first to emerge from the trademark disputes between Pom, which makes 100 percent pomegranate juice, and competitors including Welch Foods Inc., Ocean Spray Cranberries Inc. and Tropicana Products Inc.

Pom claims that Minute Maid, a Coca-Cola subsidiary, used false and misleading labeling to deceive consumers into believing that its Pomegranate Blueberry juice contained a significant amount of pomegranate juice when, in fact, more than 99 percent was apple and grape juice. Coca-Cola has maintained that its juice was labeled as a flavored blend and, as a result, was not required to contain a significant amount of pomegranate juice under federal regulations.

On May 5, 2010, U.S. District Judge James Otero in Los Angeles found that Pom’s Lanham Act claims against Coca-Cola were precluded by the U.S. Food, Drug and Cosmetic Act and U.S. Food and Drug Administration regulations governing product labeling. He found that Pom lacked standing to pursue claims under California’s false advertising and unfair competition laws, which prohibit deceptive and misleading advertising.

On May 17, the Ninth Circuit affirmed that decision as to Pom’s claims under the Lanham Act but reversed as to whether Pom had standing to pursue allegations under state law claims.

“We are pleased with the Ninth Circuit’s decision upholding the dismissal of the heart of Pom’s false advertising claim,” said Coca-Cola spokeswoman Susan Stribling. “The Court held that Coca-Cola’s label presumptively complies with the relevant FDA regulations. The Ninth Circuit remanded the case back to the trial court solely to determine the technical issue of whether Pom has standing to bring California state law claims. We are confident that the district court will dismiss what little is left of Pom’s baseless claims.”

Coca-Cola’s attorney on the appeal was Steven Zalesin, a partner at New York’s Patterson Belknap Webb & Tyler.

Calls to Pom’s parent corporation, Los Angeles-based Roll Global LLC, and its attorney, Seth Waxman, chairman of the appellate and Supreme Court litigation practice at Wilmer Cutler Pickering Hale and Door, were not returned.

The Ninth Circuit cited its own 2010 decision in PhotoMedex Inc. v. Irwin, upon which Coca-Cola relied heavily in its appellate briefs. In that case, the Ninth Circuit ruled that a dermatology laser manufacturer could not leverage its private right of action under the Lanham Act to enforce FDA regulations.

“Applying the teaching of PhotoMedex to the circumstances of this case, we conclude that the FDCA and its regulations bar pursuit of both the name and labeling aspects of Pom’s Lanham Act claim,” wrote Circuit Judge Diarmuid O’Scannlain, who had called the dispute a “very challenging case” during oral arguments on Feb. 8.

The panel rejected Pom’s attempt to rely on decisions by federal district judges who disagreed with Otero in cases against other competitors; those judges ruled that Pom could pursue Lanham Act claims absent a broader finding that FDA regulations or the FDCA precluded them.

As for reversing the California claims, the panel cited two California Supreme Court cases issued following Otero’s ruling on standing.

At trial, juries have ruled against Pom. In one case, a federal jury in Los Angeles found that Welch’s had deliberately deceived consumers in the labeling of its White Grape Pomegranate juice, but awarded Pom no damages.

Pom’s appeal before the Ninth Circuit in that case has been fully briefed, but the panel didn’t hear arguments on Feb. 8. The Ninth Circuit’s opinion did not address the Welch’s case.

Separately, Pom is defending claims about its products before the Federal Trade Commission, which has alleged that Pom’s advertising and marketing falsely portrays that 100 percent pomegranate juice prevents prostate cancer, heart disease and erectile dysfunction.

Contact Amanda Bronstad at [email protected].

This article originally appeared in The National Law Journal.