It is not a good sign for a lawyer at the Supreme Court who is arguing that her client’s product is not misleading when one of the justices says he was misled.
But that was New York lawyer Kathleen Sullivan’s burden Monday when she faced a barrage of questions about a Coca-Cola product called Pomegranate Blueberry Flavored Blend of Five Juices. On the label, “Pomegranate Blueberry” is dominant, with pictures of the fruits, while “Flavored Blend of Five Juices” requires a far more discerning eye.
A competitor, Pom Wonderful, which makes a more concentrated version of a pomegranate drink, sued for false advertising. But Sullivan said the name and label met Food and Drug Administration regulations and “we don’t think that consumers are quite as unintelligent as Pom must think they are.”
“Don’t make me feel bad,” shot back Justice Anthony M. Kennedy, “because I thought this was pomegranate juice.”
Pom lawyer Seth Waxman said anyone would be fooled.
“What’s misleading consumers here is they have no way on God’s green earth of telling that the total amount of blueberry and pomegranate juice in this product can be dispensed with a single eyedropper,” Waxman said. “It amounts to a teaspoon in a half gallon” of mostly apple and grape juices.
Pom sought to sue under the Lanham Act for false advertising. But the U.S. Court of Appeals for the 9th Circuit agreed with Coke and its subsidiary Minute Maid that such suits are precluded if the product complies with FDA regulations.
Questions and comments from the justices indicated that they might disagree.
“I don’t know why it’s impossible to have a label that fully complies with FDA regulations and also happens to be misleading on the entirely different question of commercial competition, consumer confusion that has nothing to do with health,” Chief Justice John G. Roberts Jr. said.
Justice Ruth Bader Ginsburg said the label may meet FDA standards, but the agency was not approving the drink’s name. “In the real world, the FDA has a tremendous amount of things on its plate, and labels for juices are not really high on its list,” she said.
Sullivan argued that Congress, in giving labeling decisions to the FDA, wanted to preempt labeling lawsuits so that “a manufacturer could print one label and sell in the 50 states and not have its juice legal when you leave on the flight in California and illegal when you land in D.C.”
Kennedy, her toughest antagonist, responded: Does uniformity demand labels “that cheat consumers like this one did?”
Assistant Solicitor General Melissa Arbus Sherry presented a middle view on behalf of the government. She said the name was fine: “The idea being by allowing manufacturers to choose to name their juice product based on the juice that flavors the product as opposed to based on the juice that is predominant by volume” they are not fooling consumers.
But she said there might be a false advertising case based on the label presentation and the fact that pomegranates and blueberries are featured as prominently as other fruits, although they make up only 0.3 percent and 0.2 percent, respectively, of the drink.
The case is Pom Wonderful v. Coca-Cola Co.
In a separate case heard Monday, the justices seemed to be looking for a way to split the difference in a dispute between Argentina and some investors who own its defaulted bonds and want to get paid.
The court was reviewing a lower court decision that gave the bondholders wide latitude in questioning banks to discover property that Argentina owns around the world. The justices indicated they might uphold the orders applying to commercial property outside the United States, but not to things such as military or diplomatic holdings.
Even Justice Antonin Scalia, who had been the biggest critic of Argentina’s argument early in the hearing, told the bondholders’ attorney Theodore Olson that he thought military and diplomatic holdings might be off limits.
Elliott Management Corp.’s NML Capital has won $1.6 billion in judgments against Argentina after it defaulted on its bonds in 2001. The current fight is about uncovering Argentina’s assets in order to satisfy the judgments.
NML Capital also has asked the court to block Argentina from paying investors who hold other bonds until the country satisfies the judgments. The court has not indicated whether it will take up this second issue.
Argentina’s lawyer Jonathan I. Blackman said the Foreign Sovereign Immunities Act forbids “the sweeping worldwide forensic examination of foreign state property that the court of appeals approved.”
The Obama administration is backing Argentina. Deputy Solicitor General Edwin S. Kneedler said the administration is “gravely concerned” about the prospects of a foreign court requiring the United States to provide such an inventory of assets.
Justice Sonia Sotomayor responded: “How often do you think the U.S. is going to default on paying a judgment and have people chase it all around the world?”
Scalia wondered why other foreign governments have not come to Argentina’s defense.
“Maybe because Argentina owes them money as well as it does these plaintiffs,” he speculated.
The case is Republic of Argentina v. NML Capital.