Coca-Cola Prevails in Lanham Act False Advertising Case in California
A business that uses false statements in connection with the sale of their products or those of their competitor can be held liable to their competitor under the Lanham Act if those false statements deceived consumers into choosing their product over the competitor’s. But false statements alone are not enough, as illustrated by the recent jury verdict in Pom Wonderful, LLC v. Coca-Cola Co.
Pom Wonderful sued Coca-Cola for $77.5 million dollars alleging that the soft-drink giant stole business from Pom by tricking consumers into believing Minute Maid’s (a Coca-Cola brand) “Enhanced Pomegranate and Blueberry Flavored 100% Juice Blend” product was actually made with pomegranate and blueberry juice. Pom charged that Coke’s product was mostly made with apple and grape juice and only a nominal amount of pomegranate and blueberry juice—about half a percent of the two juices combined.
Under the Lanham Act, Pom was required to prove the following elements of its claim by a preponderance of the evidence:
- A false or misleading statement of fact;
- Used in a commercial advertising or promotion;
- That is material in that it deceives or is likely to deceive consumers;
- In interstate commerce;
- That causes or is likely to cause competitive or commercial injury to the plaintiff.
You can read more about the requirements for a false advertising claim under the Lanham Act here.
The jury found Pom did not meet its burden. Pom’s difficulty was not in proving that Coke had made a false or misleading statement, even though Coca-Cola’s attorneys argued that it had followed the FDA’s guidelines in creating its labels for the product, which allow a description of “flavored” in the labeling of a product where it is not a significant ingredient.
Rather, the jury decided in favor of Coke because Pom had not shown that consumers had been deceived by Coke’s labeling. The verdict highlights the Lanham Act’s limited purpose: it is not a panacea for policing false statements made in connection with the sale or advertising of products.
Since the jury found no liability, it did not consider Coke’s defense of unclean hands, which was based on evidence that Pom itself had sold juice-blend products containing even less real fruit juice than the Minute Maid drink at issue in the case.
Pom is no stranger to the Lanham Act. In 2011, another federal jury found that Pom had not proved that Ocean Spray’s pomegranate cranberry juice drink contained false or misleading statements despite arguments by Pom that it included only a trace amount of pomegranate judice. In 2010, Pom succeeded in convincing a jury that Welch made false statements regarding similar pomegranate-flavored products and that those statements deceived customers, but awarded no damages to Pom after finding that Pom failed to show that it was injured by Welch’s actions.
Pom Wonderful v. Coca-Cola was litigated over the course of eight years. Long before the case was decided by a jury, it went to the U.S. Supreme Court on another Lanham Act issue: whether this type of claim under the Lanham Act is foreclosed by the Food, Drug & Cosmetics Act, which regulates the misbranding of food. The Court held that the FDCA does not trump the Lanham Act, and thus companies cannot rely on their compliance with FDA regulations to protect them from false advertising claims.
Bona Law attorneys are experienced in the prosecution and defense of Lanham Act claims. We also offer counseling to food-industry clients that are forced to comply with the competing requirements of FDA label regulation, the Lanham Act, and other deceptive advertising laws. Please contact us if you have been injured by a competitor’s false statements or if you’ve been accused of doing the same.