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The US Supreme Court ruled 8-0 yesterday that Pom Wonderful can sue Coca-Cola for what it views as misleading label claims, a ruling that is seen as having important implications for marketers, which no longer can rely on compliance with Food and Drug Administration (FDA) rules as protection against such charges.

Pom Wonderful had gone to court to say that Coca-Cola misled consumers when it labeled a Minute Maid "pomegranate blueberry" product that only contained 0.3% pomegranate juice and 0.2% blueberry juice. Coke had said that it could not be sued because it met FDA regulations.

The Supreme Court ruling does not validate the Pom claim, but rather just enables Pom to pursue its claim in the courts.

"We respect the Court's decision and remain committed to clear labeling that fully complies with FDA regulations," Coca-Cola said in a statement. "The Court has decided that even though the name and label for our product was authorized by FDA regulations, Pom is entitled to present its legal claims to a jury. We intend to defend against Pom's claims that our labeling is misleading, and the evidence at trial will show that our product was not the cause of Pom's poor sales."

Pom, of course, has skin in the game because it makes a pomegranate juice product that makes its own health claims.

The Wall Street Journal reports that "the high court case is one of two closely watched marketing cases involving Pom Wonderful. The juice maker, owned by Los Angeles billionaires and philanthropists Lynda and Stewart Resnick, is on the defensive in the second case, which is under consideration by a federal appeals court in Washington. There, Pom is fighting Federal Trade Commission findings that it made misleading ad claims about the disease-fighting benefits of its products."
KC's View:
I'm no lawyer, so I'm probably unqualified to offer an opinion on this. But I think it is legitimate to suggest that something that is 0.3% pomegranate juice and 0.2% blueberry juice really isn't pomegranate/blueberry juice at all … or at least there is a little bit of bait and switch taking place. At the very least, this strikes me as something that ought to be litigated in the courts … and certainly in the court of public opinion. It is sort of the same thing that happens when you look at the ingredient list on some boxes of frozen blueberry pancakes and find out there really aren't any blueberries in them at all.

It is interesting. Several stories about this case note that in oral arguments, Justice Anthony Kennedy said that "I think it’s relevant for us to ask whether people are cheated in buying this product," which prompted Coke's lawyer, Kathleen Sullivan, to respond, “We don’t think that consumers are quite as unintelligent as Pom must think they are … They know when something is a flavored blend of five juices and the nonpredominant juices are just a flavor."

Justice Kennedy replied: "Don’t make me feel bad, because I thought that this was pomegranate juice."

Sullivan's comments strike me as typical lawyer-speak, and Coke probably wants to be careful about heading in this direction. Because I think can be argued that while its lawyer says that they believe that consumers are intelligent enough to know the difference, marketers often depend on precisely the opposite. And consumers - when presented with the facts in the harsh light of day - know the difference.

Finally, the irony is that when it comes to being accused of deceiving customers, Pom could be hoisted on its own petard.

Fascinating cases. In the end, they are all about transparency and accuracy … and an environment that increasingly will be harsh to people and companies that obfuscate.