Welch’s to pay $30m over misleading juice claims

By Shane Starling

- Last updated on GMT

Related tags Federal trade commission

Welch's resolves to pay $30m to settle class actions, but its battle with POM Wonderful over labelling is not over
Welch's resolves to pay $30m to settle class actions, but its battle with POM Wonderful over labelling is not over
Welch’s will pay $30m to consumers misled by labeling for its ‘100% Juice White Grape Pomegranate’ after settling class actions in a California court this month. Welch’s has responded to another class action in a Florida court that is yet to be resolved.

In the settlement with two individual class actions that had been united, Welch’s admitted no wrongdoing in labelling the juice it said complied with the Food, Drug & Cosmetics Act, but agreed to refund consumers to the tune of $30m and send at least $345,000 worth of juice products to selected charities.

However a website​ established under the agreement to facilitate the payments brought up only a short message that said in part: “…the hearing on the motion to grant preliminary approval of the class action settlement has been postponed.”

The class actions were lodged at various points last year after a court ordered Welch’s to alter its labelling after it became one of several juice companies – including Coca-Cola - pomegranate juice leader POM Wonderful sued for allegedly misleading claims. Its battle with Coca-Cola is also ongoing.

The jury in the Welch’s case agreed with POM that the ‘100% Juice White Grape Pomegranate’ juice label was misleading because the product only in fact contained a small percentage of pomegranate juice, but also found the deception had not harmed POM’s own sales and so awarded no damages in finding in favour of Welch’s.

Pending litigation

The verdict was delivered in October, 2010, but POM appealed it the following month and Welch’s has submitted papers that it too will contest the jury findings because it says POM should never have been able to submit the claim in the first place because it was “legally precluded”.

The class action doesn’t go into detail about why that might be the case, and the company would not comment on “pending litigation”​, but it is believed to hinge on the fact POM Wonderful was under Federal Trade Commission (FTC) investigation at the time over its own health claims.

The FTC subsequently called POM’s claims into question which has prompted POM to sue the agency over its own claim-substantiation methodologies.

While all that proceeds, Welch’s will refund consumers at varying levels who may have purchased the product during the three years it was on the market between July 2007 and August 2010.

The action notes that in that period, 1.2 million cases were sold worth about $11m, and which generated a net loss of more than $160,000.

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1 comment

lawyers win

Posted by D,

So in other words, the lawyers win.

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