A landmark U.S. Supreme Court decision on the ultimate source of pomegranate juice has already leaked into other product lines—including textiles—and its reach is likely to extend even further. It’s been three months since the U.S. Supreme Court’s decision in POM Wonderful LLC v. Coca-Cola Co.—and the decision’s effects are already being felt in the area of source identification. The High Court’s holding allowed POM Wonderful to sue Coca-Cola under the Lanham Act’s unfair competition provision for an allegedly false and misleading label on Coca-Cola’s Minute Maid pomegranate-blueberry juice blend. According to POM Wonderful, Coca-Cola’s juice blend prominently displayed the words “pomegranate juice” when, in reality, the product contained only 0.3% pomegranate juice. The Court rejected Coca-Cola’s objection that the Lanham Act claim should be precluded because the Minute Maid labeling complied with FDA regulations. (For a deeper analysis, see our prior LawFlash.) In June 2014, the decision was heralded by POM Wonderful as “a real victory for consumers” that will “translate into higher assurance for consumers that the labels on beverage and food are accurate.” Although time will tell, plaintiffs and courts have started to use POM Wonderful in some creative ways in the arena of source identification, and these claims may be a harbinger of things to come.
At least one court has already relied on POM Wonderful’s analysis in an interesting way, highlighting the decision’s potential reach. On August 26, the U.S. District Court for the Northern District of Illinois refused to dismiss a claim for false advertising under the Lanham Act against a distributor of double-sided microfiber cloth. In Toddy Gear, Inc. v. Navarre Corp., No. 13-cv-8703, Toddy Gear sued Navarre, alleging that Navarre distributes a knock-off version of the Toddy Smart Cloth known as “Schatzii.” According to Toddy Gear, the packaging of Schatzii is misleading because it claims that the product is designed and produced in the United States, when, in reality, it is imported from China and the manufacturer only has one employee in the United States. In deciding a motion to dismiss, the district court relied on POM Wonderful. The court analyzed whether provisions of the Textile Fiber Products Identification Act, which allows the FTC to regulate textile products, precluded Toddy Gear’s Lanham Act claim. The court observed that the Lanham Act “protects competitors” and, quoting from POM Wonderful, that the FTC’s regulation of textile products does not bar private litigants from asserting unfair competition claims. Although this decision did not involve food labeling, the sourcing allegations can be translated to imported food goods.
We have not yet seen a flood of filings among competitors that rely on POM Wonderful. Nonetheless, the above developments illustrate the potential for the decision to expand into many different areas. The Lanham Act is a powerful weapon that can be used to police competitors and has become even powerful now that compliance with FDA regulations does not preclude such claims.