The Supreme Court Gives Green Light for Companies to Sue Competitors for Misleading Labels

In April, we reported on an interesting case that was to be heard by the U.S. Supreme Court. The case revolves around the labeling of food products and specifically whether a company can sue a competitor for misleading labeling even though the label meets U.S. Food and Drug Administration (FDA) regulations.

The case involves POM Wonderful, a small juice product firm, and mega-marketer Coca-Cola. POM claims the label for Coca-Cola’s Pomegranate Blueberry Juice is misleading because the product contains less than 1 percent pomegranates and blueberries. POM sued but was rebuffed by lower courts that said Coca-Cola’s labeling was covered by certain FDA rules and, consequently, POM could not sue. POM was not satisfied with lower court rulings and took the issue to the Supreme Court.

The Supreme Court has now ruled with the voting members unanimously supporting POM’s right to sue Coca-Cola. While the decision by the Supreme Court is a win for POM, it only means they can go forward with a lawsuit. Whether they can successfully prove their claims in a lower court remains to be seen.

However, according to this Advertising Age story, there may be far greater implications of this decision as it may lead many other companies to file misleading labeling claims against competitors. It may also be a wake up call for marketers to begin exercising greater care when designing their labels or face a potential legal response from competitors.