Consumers’ challenge to the practice of labeling Late July Snacks’ products with the term "evaporated cane juice" (ECJ), a misleading term for sugar, will proceed because the complaint sufficiently pled that a reasonable consumer would be concerned about added sugar and misled by the manufacturer’s misrepresentation (Swearingen v. Late July Snacks LLC, May 5, 2017, Chen, E.).
The federal Food, Drug, and Cosmetic Act (FDC Act) requires that ingredients be listed by their common or usual names, which are the names established by common usage or by regulation. The court waited for FDA to finalize a 2009 draft guidance on use of the term ECJ (see Evaporated cane juice labeling case stayed to await FDA guidance, June 2, 2014; Sweet or sour, time running out on evaporated cane juice decision hour, May 18, 2015). When the final guidance document was issued May 25, 2016, the FDA stated that the term ECJ is not the common or usual name of any type of sweetener. Further, said the FDA, the term ECJ is false or misleading because it suggests that the sweetener is juice or made from juice and does not reveal that its basic nature and characterizing properties are those of sugar.
The consumers, purchasers of Late July’s crackers and chips, filed a second amended complaint alleging unjust enrichment and violations of the California Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. The manufacturer filed a motion to dismiss, which was denied as to the fraud-based claims. The misrepresentation was material, as a reasonable consumer would be concerned about added sugar and would be deceived by the use of ECJ. Sugar is a known health risk, and dietary guidelines distinguish between added sugars and naturally occurring sugars. The FDA has stated that the term ECJ falsely suggests that the sweeteners are juice, which is confusingly similar to the more common use of the word juice.
Nor were the claims preempted by the FDC Act. While the manufacturer claimed that the consumers were attempting to impose a requirement to label "added sugar," they never alleged that it was required to warn of added sugars. Further, the consumers could assert liability for the period before the FDA released its final guidance because Late July had notice as early as 2009 that the FDA considered the term ECJ to be false and misleading.
The case is No. 13-cv-04324-EMC.
Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Mary Swearingen. Joshua L. Solomon (Pollack Solomon Duffy LLP) and Rocky C. Tsai (Ropes & Gray LLP) for Late July Snacks LLC.
Companies: Late July Snacks LLC
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