Ninth Circuit Stays Class Action Food Labeling Lawsuit Until the FDA Completes Review

The pitter patter of class action footsteps that food companies hear may have gotten a bit quieter, at least for now, based upon a Ninth Circuit decision in Kane v. Chobani this week.  The lawsuit centers on Chobani’s use of the terms “evaporated cane juice” and “only natural ingredients” on its yogurt labels.  According to the plaintiffs, the yogurt included color additives that allegedly did not qualify as “natural.”  The plaintiffs further argued that Chobani’s use of “evaporated cane juice” is simply code for sugar, and Chobani therefor misled them about the healthiness of its products.  In oral arguments Chobani argued that the term “evaporated cane juice” fully complies with federal regulations and that “sugar” would be an inaccurate term because it indicates a refined sugar, while Chobani’s ingredient is not a refined sugar.  The District Court dismissed the case, holding that plaintiffs had failed to plead sufficiently reliance upon the allegedly misleading terms.  Plaintiffs appealed to the Ninth Circuit.

The Ninth Circuit’s decision was at least on the surface at least a partial win for plaintiffs as the 9^th Circuit vacated the lower court’s ruling granting Chobani’s motion to dismiss.  However, in a move that could have widespread implications for the numerous pending class actions in California alleging misleading use of the term “natural” or evaporated cane juice, the 9^th Circuit then stayed further proceedings under the primary jurisdiction doctrine pending the outcome of an FDA review of these two terms.

The court noted that the Food and Drug Administration (“FDA”) is currently reviewing the use of the terms “natural” and “evaporated cane juice” on food labels and that it was appropriate for proceedings to be stayed pending the completion of the FDA’s review.  The issue, with respect to evaporated cane juice, is perhaps more straightforward as the FDA has previously informed a federal court that it expects to issue final guidance on the use of the term by the end of this year.  The outcome of the FDA’s review of the term “natural” is less clear as the FDA is requesting comments as to whether it should provide guidance on the term and, if so, what that guidance should be.  Further, the FDA has extended the comment period with respect to “natural” until May 2016 and the Ninth Circuit, in a footnote, observed that the District Court had discretion to lift the stay if it no longer appeared that the FDA resolution of one or both of both of these issues was “imminent.”  At least for now, however, when it comes to “natural” in particular all eyes turn toward the FDA and the Ninth Circuit’s decision could ratchet up the pressure for the FDA to take some form of action on this perennially contentious issue.