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Thursday, Aug 29 2013 04:18 PM

Juice maker waging court battles on 2 fronts

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    By AP Photo/Matt Rourke

    Displayed is a bottle of POM Wonderful juice in Philadelphia on Sept. 27, 2010.

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BY MICHAEL DOYLE McClatchy Washington Bureau

WASHINGTON -- The deep-pocketed pomegranate juice makers of POM Wonderful are now fighting a multi-front war over commercial speech.

In one federal court, the California-based company with a big presence in Kern County is on offense. It's challenging Coca-Cola Co. over the latter's use of "Pomegranate Blueberry" on certain juice labels, sold under the Minute Maid brand. POM Wonderful officials call the labels misleading.

But in another federal court, POM Wonderful is on defense. The company is trying to fend off the Federal Trade Commission's order that it stop making certain claims of its own.

The separate legal fights have engaged some of the nation's premier lawyers. They are also raising questions whose answers could reverberate well beyond the pomegranate orchards of the San Joaquin Valley.

In one of two separate legal challenges now under way, the company is trying to convince the U.S. Supreme Court to hear an appeal of a lower appellate court's decision. Last year, the 9th U.S. Circuit Court of Appeals ruled POM Wonderful could not challenge Coca-Cola's labels because the labels already met federal standards.

"If allowed to stand," POM Wonderful's attorneys, including former Solicitor General Seth Waxman, declared in one legal filing, "the 9th Circuit's opinion would have far-reaching consequences."

Underscoring the potential significance, the Supreme Court has invited the Obama administration to weigh in. The administration has not yet submitted its brief, to be considered when the court convenes in September.

On Wednesday, Georgetown University Law Center Professor Rebecca Tushnet said the long-term significance of the case "depends on what happens next."

"The 9th Circuit is an important circuit in false advertising litigation," Tushnet said in an interview. "However, sometimes cases that look very significant end up being fairly limited in practice as courts distinguish them away."

Founded by Stewart and Linda Resnick in Los Angeles, with orchards about 100 miles away in the southern San Joaquin Valley, the privately held POM Wonderful LLC produces pomegranate juice sold in distinctively bulbed bottles. The Resnicks also have vast citrus and other agricultural holdings, through their Roll Global corporation, and are reported by Forbes magazine to have a net worth of $2.2 billion.

Roll Global employs more than 5,500 people in 23 countries, including more than 2,600 people in Kern County. The Resnicks are also well known for their philanthropy here.

Roll Global and its attorneys declined to comment on the legal battles.

Health claims, backed by millions of dollars in research funded by the company, have long flavored POM Wonderful's marketing.

Some of POM's advertisements are creative in nature, depicting the POM Wonderful Juice bottle in a number of unusual ways; for example, as an intravenous bag, covered by medical equipment such as a blood pressure cuff or EKG sensors and accompanied by headlines such as "amaze your cardiologist" and "lucky I have super HEALTH POWERS," the FTC noted in January.

The five-member trade commission unanimously concluded that POM Wonderful had made "deceptive claims" in 36 advertisements and promotional materials. Officials barred the company from claiming the product was effective against any disease, "including heart disease, prostate cancer and erectile dysfunction, unless the claim is supported by two randomized, well-controlled, human clinical trials."

POM Wonderful is challenging the commission's order, with an appeal now ripening before the U.S. Court of Appeals for the District of Columbia Circuit. In an opening brief filed Aug. 16, the company contends that the FTC bans constitutionally protected speech.

"POM's advertisements advance accurate, truthful and carefully qualified claims about the health benefits of consuming pomegranate juice. Those claims are based on the best science that is reasonably available," the company declared.

Last week, several industry and consumer groups filed amicus briefs supporting POM Wonderful, arguing that the trade commission was effectively blocking many healthy food claims by insisting on expensive randomized clinical trials.

The Obama administration has not yet responded to the appeal. In its January decision, though, the FTC noted that the First Amendment allows some regulation of advertising.

"The federal government is free to prevent the dissemination of commercial speech that is false, deceptive or misleading," the FTC stated.

A different kind of speech dispute pits POM Wonderful against Coca-Cola, in the fight now being served up to the Supreme Court.

POM Wonderful used a federal law called the Lanham Act to claim Coca-Cola misleadingly labeled its pomegranate-blueberry product. Less than 1 percent of the latter juice came from pomegranates or blueberries; nearly all comes from apple or grape juice.

The 9th U.S. Circuit Court of Appeals rejected the suit, reasoning that the Food and Drug Administration had already pre-empted labeling oversight. The FDA had completed extensive rule-making to spell out how juice blends can be labeled, and had specifically permitted blends to be identified by a "non-primary" but "characteristic" juice.

"FDA has promulgated highly specific rules for hundreds of foods and beverages, from beef stew (which) must be 25 percent meat, to peanut butter, (which) must be 90 percent peanuts," Coca-Cola's attorneys wrote in a legal brief. "Manufacturers should not be exposed to lawsuits by competitors under the Lanham Act simply because they have adhered to these FDA prescriptions."

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