Even before the decision of the POM Wonderful v. Coca-Cola case, the beverage industry may be losing out. And it’s not alone.
Monday’s hearing wasn’t what the beverage industry, the food industry and any other industry with regulated labels were hoping for, said August T. Horvath, an advertising law attorney at Kelley Drye & Warren LLP. These industries deal with different labeling techniques, different regulation enforcement and different statutes. While representatives from all of these industries await the decision of this particular case, seeking uniform standards, the case’s resolution may lead to nothing more than questions.
“I definitely see ambiguity here, no matter what,” Horvath said.
Horvath represented Ocean Spray in a case POM filed against the company only a few months after filing the Coke case. The cases were just about identical, he said. POM alleged that Ocean Spray misled consumers with a pomegranate-cranberry juice drink that contained small amounts of pomegranate juice. Sound familiar?
The case, one of three others in a similar vein, was filed in the same district of California. The complaint allegations were the same. POM used the same expert witness, he said, the same survey techniques. This case is another of the company’s effort to clean up what it considers an industry of fake pomegranate juice.
To Dale Giali, a partner at Mayer Brown LLP, and Horvath, one of the more surprising elements of Monday’s hearing was the Supreme Court questioning the role of the U.S. Food and Drug Administration as a consumer protection agency.
“We always thought that was the whole point of the FDA’s labeling authority,” Horvath said.
Giali, who has previously represented Coke but is not directly involved with this case, echoed these sentiments. He said that the Court deflated the idea that the Food, Drug, and Cosmetic Act and the FDA can serve as guidance to food and beverage companies as they compile their labels and nutrition facts panels.
“I think what they turned on their head is this notion that the Food, Drug, and Cosmetic Act and then the FDA are a one-stop shop for food label law,” Giali said.
Giali said that much of the Court, especially Justice Anthony M. Kennedy, derided Coca-Cola because of a visceral, surface-level reaction. Even with the label’s existing components — 100 percent juice, the word “blend,” the ingredients ordered by predominance — the justices spoke in a way suggesting that they believe a product’s title also entails its contents, not just its taste, he said. The reaction seems to have helped POM’s argument.
“Coke, in my opinion, took a beating,” Giali said.
It was the visceral reaction that stuck with Giali. When you buy onion soup, he said, you don’t expect an onion to roll out of the can, or liquified onion. You don’t expect it be 90 percent onion. However, you expect it to taste enough like onion soup for the title to accurately reflect the product. Giali said that the situation is a caveat emptor. He said the Court should empower consumers who read nutrition facts panels, not suits of this kind and dumbing down consumers.
“The information is right there on the package,” he said. “They don’t even have to go to their smart phone.”
Horvath said that he’s heard the phrase “opening the floodgates” in association with this case. However, while the eventual decision could give plaintiffs more to challenge, he’s not so sure about that phrase.
“I think the floodgates on food litigation might already be open,” he said.
Horvath believes that a POM win could lead to a stream of consumer class action suits under state consumer protection laws. Lindsey Zahn, an attorney with Lehrman Beverage Law, said that this case doesn’t question health or direct competition claims. Rather, it’s a case about a statement of identity with a cut-and-dry fruit juice.
Zahn, who regularly works with alcohol beverage companies, placed the case’s details against the context of the Alcohol and Tobacco Tax and Trade Bureau, which requires percentages on certain wine labels made from a blend of grape varietals. Who’s to say, Zahn said, that non-alcoholic beverage companies won’t soon be required to do the same? The FDA, she said, doesn’t have any particular regulation on blends. Ingredient predominance wasn’t enough to stop POM from filing these suits.
This wouldn’t be the first time that the FDA has been accused of inscrutability. And for the beverage industry, and any other industry with a regulated label, that’s the trouble.