Another “evaporated cane juice” claim, here for yogurt that
used that term in its ingredients list instead of “sugar” or “dried cane
syrup.” The FDA’s standard of identity
for yogurt bans addition of any “nutritive carbohydrate sweetener[ ]” other
than those explicitly allowed, of which “evaporated cane juice” is not one,
though “sugar” is. Noncompliance with
the standard of identity means the product can’t be called yogurt.
The court found that the plaintiffs had standing, that the
primary jurisdiction doctrine didn’t apply, that the yogurt claims weren’t
preempted, and that plaintiffs weren’t trying to enforce the FDCA directly.
Turning to the specific requirements of the UCL: plaintiffs
failed to state a claim of “fraudulent” conduct because they didn’t explain how
or why the term “evaporated cane juice” was likely to mislead consumers, or how
they themselves were misled. They claimed
they wouldn’t have bought the products if they’d known the truth, but they
bought despite the fact that the sugar content is listed right next to the
ingredients list. While the Ninth Circuit said that “reasonable consumers
should [ not] be expected to look beyond misleading representations on the
front of the box to discover the truth from the ingredient list in small print
on the side of the box,” Williams, “here,
the ‘truth’ is literally next to the allegedly misleading representation in the
same print size. If a reasonable consumer was concerned about sugar content, he
or she can see how much sugar is in a Wallaby product next to the ingredient
list.” The plaintiffs didn’t explain
what would be misleading about the term “evaporated cane juice.”
If their objection was to “added” sugar, that was belied by
their own allegations that they didn’t want to buy products with “sugar or dried
cane syrup” in them. They did buy Wallaby’s products despite the
clear presence of sugar. “The
plaintiffs’ claims contradict themselves and, thus, do not meet the heightened
standard for pleading fraud. If their claim is that they would purchase
products containing naturally occurring sugar, but not those with added sugar,
they need to allege that with particularity in their complaint.”
However, the plaintiffs did state a claim of “unlawful”
conduct. At this stage, the court agreed
that it seemed that the term “evaporated cane juice” couldn’t be used pursuant
to the federal common and usual name requirements adopted as California law by
the Sherman Law. Wallaby pointed out
that the FDA’s draft guidance disapproving of “evaporated cane juice” was not
yet finalized, but the FDA had still expressed its view of federal law. Even an informal agency interpretation is
controlling unless plainly erroneous or inconsistent with the relevant
regulation. Plus, Wallaby’d just
finished arguing that the FDA had enormous expertise in support of its primary
jurisdiction argument; the FDA’s tentative view should guide judicial
interpretations.
They didn’t state a claim of unlawfulness on the theory that
the yogurt standard of identity barred the use of “evaporated cane juice,”
though, since the standard of identity allowed a number of sweeteners,
including sugar, and only explicitly banned “table sirup,” which evaporated
cane juice is not—it’s sugar. “The
Standard of Identity for yogurt only regulates what ingredients may be present
in yogurt; it does not regulate what those ingredients may be called.”
Plaintiffs also failed to state a claim of unfair conduct. These results deprived plaintiffs of a claim under the CLRA
and the FAL, which also use the reasonable consumer standard, so there was no
actionable misrepresentation.
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