By Lawrence Hurley
WASHINGTON (Reuters) - The U.S. Supreme Court ruled on Thursday that drink producer POM Wonderful LLC can sue over allegations that Coca-Cola Co
The court ruled in favor of POM on an 8-0 vote, with Justice Stephen Breyer recused. POM had filed a lawsuit against Coca-Cola saying it had misled customers by selling a pomegranate blueberry juice even though it had 0.5 percent of the two juices. POM, which makes a drink that is 100 percent pomegranate, said the label would hurt sales for its own product.
Although the case pitted two businesses against each other, POM hailed the ruling as a victory for consumers.
"We believe that when people better understand what they are consuming, they can make healthy and more informed decisions about what they buy," the company said in a statement. POM Wonderful also makes food products.
Both a U.S. District Court in California and a federal appeals court said that POM could not bring its claims under the federal Lanham Act but the Supreme Court reversed that finding.
"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," Coca-Cola said in a statement.
Justice Anthony Kennedy wrote on behalf of a unanimous court that challenges such as POM's are permitted even though food and beverage labels are regulated under another federal law, the Federal Food, Drug and Cosmetic Act.
The lower courts had said that it was the prerogative of the Food and Drug Administration, and not private parties, to object to juice labels which are potentially misleading.
Various business groups, including the U.S. Chamber of Commerce and the American Beverage Association, had backed Coca-Cola in the case. The federal government filed a brief supporting neither side, saying some claims could move forward but not others.
Kennedy wrote that, contrary to what Coca-Cola argued, the two laws complement each other. He noted, for example, that the FDA "does not have the same perspective or expertise in assessing market dynamics that day-to-day competitors possess."
POM has itself run into legal problems over allegations of misleading consumers. In January 2013, the Federal Trade Commission said the company was deceptive in advertising that its pomegranate juice and other products had been clinically proven to reduce the risk of heart disease and other ailments. That case is currently on appeal.
Justices do not usually reveal why they recuse themselves in cases so it was not disclosed why Breyer did not participate. The case is POM Wonderful LLC v. The Coca-Cola Company, No. 12-761.
(Reporting by Lawrence Hurley; Additional reporting by Diane Bartz; Editing by Howard Goller and Meredith Mazzilli)