Intellectual Property Law

Ninth Circuit Upholds False Advertising Claim Against Pomegranate Juice Seller

By Michael Atkins

Purity claim constituted false advertising, the Ninth Circuit affirms

POM Wonderful LLC sued competing pomegranate fruit juice seller Purely Juice, Inc., and its president for false advertising under the Lanham Act and California law for marketing its juice as “100%” pomegranate juice with “no added sugar,” when defendants allegedly knew or should have known the juice was adulterated.

Last year, Central District of California Judge Christina Snyder agreed with POM and awarded it $1.2 million in damages, disgorgement of $300k in profits, and $622k in attorney’s fees. Defendants appealed.

On Dec. 28, the Ninth Circuit affirmed, finding intent is not an element of a Lanham Act claim and that the district court properly found defendants had the knowledge of falsity required under California law. In short, it found defendants could not blindly rely on its juice suppliers’ representations that the product was pure when it had evidence to the contrary.

“Purely Juice knew a batch of its product was not 100% pure, without sugar added, from results of the Silliker testing received on February 26, 2007,” the Ninth Circuit found. “Further testing revealed that Purely Juice produced additional batches of product that was not 100% pure even after the February 26 report, and Purely Juice left that product on the shelves. This shows Purely Juice sold product it knew, or reasonably should have known, was falsely advertised.

“Despite knowing certain industry brokers had ‘credibility issues’ and there were ‘suitability questions’ about some concentrate, Purely Juice did little to vet its broker or suppliers. Purely Juice understood (1) a limited global supply of pomegranates led some concentrate juice manufacturers to blend pomegranate with other juices; and (2) difficult harvesting conditions and lack of refrigeration at processing plants led concentrate manufacturers to add sugar. Nevertheless, [Purely Juice President Paul] Hachigian testified he selected Perma Pom, Purely Juice’s broker, by simply ‘talk[ing] to them and ask[ing] them how long they had been doing pomegranate juice concentrate and so forth.’ The Perma Pom representative testified suppliers are not subject to any verification process; Perma Pom ‘take[s] the word of the supplier’ and relies on certificates of quality. That Purely Juice instructed its broker to immediately switch suppliers does not undermine the district court’s conclusion, because Purely Juice’s practice was to blindly rely on the underlying representations.”

See 43(B)log’s analysis of the district court’s findings here.

The case cite is POM Wonderful LLC v. Purely Juice, Inc., 2009 WL 5184233, No. 08-56375 (9th Cir. Dec. 28, 2009).

Full post as published by Seattle Trademark Lawyer on January 06, 2010 (boomark / email).