• Sweet(ener) Confusion: Court Divide Over Role of Primary Jurisdiction Doctrine in “Evaporated Cane Juice” Cases Grows
  • April 22, 2014 | Author: Robin A. Achen
  • Law Firm: Sheppard, Mullin, Richter & Hampton LLP - Los Angeles Office
  • In Swearingen v. Santa Cruz Natural, Inc., No. C 13-04291 (N.D. Cal. April 2, 2014), Judge Illston of the U.S. District Court for the Northern District of California granted defendant’s motion to dismiss based on the primary jurisdiction doctrine. The court held that the determination of the issue of whether the use of the term “evaporated cane juice” violates Food and Drug Administration (“FDA”) regulations is best left to the FDA, and that deference to the FDA is appropriate as the FDA is engaged in active rulemaking on the issue. Judge Illston’s decision demonstrates a growing divide on the application of primary jurisdiction in the “evaporated cane juice” arena.

    Plaintiffs brought a class action complaint against Santa Cruz Natural based on its use of the term “evaporated cane juice” on its beverage labels. Plaintiffs alleged that Santa Cruz Natural used the term “evaporated cane juice,” rather than sugar, in order to make its sodas, juices, and other beverages appear healthier. Plaintiffs invoked the FDA regulations that require food labels to reflect the common or usual name of an ingredient, (21 CFR § 101.4(a)(1) and 21 C.F.R. § 102.5(d)) and argued that Santa Cruz Natural’s use of “evaporated cane juice” violated those regulations. Plaintiffs then alleged violations of the UCL, FAL, and CLRA, as well as various common law causes of action.

    The court granted Santa Cruz Natural’s motion to dismiss on the doctrine of primary jurisdiction. The primary jurisdiction doctrine allows a court to “stay proceedings or dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency.” Here, the court noted that food labeling is an issue within the special competence of the FDA. The court found that the FDA has not resolved the issue of whether “evaporated cane juice” complies with its regulation requiring the use of the common or usual name of an ingredient on food labels. This finding was based in part on the FDA’s issuance of a notice in the Federal Register on March 5, 2014, reopening the comment period for draft guidance on the use of “evaporated cane juice” on food labels. In light of that notice, the court found it appropriate to dismiss the action based on the primary jurisdiction doctrine because of the following: (1) the FDA had not resolved whether evaporated cane juice is the common or usual name for the ingredient; (2) the FDA is engaged in active rulemaking on the issue; (3) the determination of the issue is best left to the FDA; (4) resolution of the issue requires the FDA’s expertise; and (5) deferring to the FDA will “enhance decision-making and efficiency.” The court also noted that deferring to the FDA would allow for uniformity in judicial administration of the issue.

    In so holding, Judge Illston agreed with Judge Rogers’ recent decision in Reese v. Odwalla, Inc., 2014 U.S. Dist. LEXIS 40341 (N.D. Cal. Mar. 25, 2014) and disagreed with Judge Orrick’s decision in Swearingen v. Amazon Preservation Partners, Inc., 2014 U.S. Dist. LEXIS 36830 (N.D. Cal. Mar. 18, 2014). In Reese, Judge Rogers similarly applied the primary jurisdiction doctrine to dismiss claims dependent on whether “evaporated cane juice” is the common or usual name of the ingredient. Judge Rogers, like Judge Illston, found that the FDA’s March 5, 2014 reopening of the comment period indicated that the FDA was exercising its authority in the area, and determined application of the primary jurisdiction doctrine appropriate. In contrast, Judge Orrick rejected a similar argument in Amazon Preservation Partners and declined to stay the case under the primary jurisdiction doctrine. Judge Orrick deemed the FDA’s March 5 reopening of the comment period unpersuasive, finding it remains unclear “when or if” the FDA will resolve the issue.

    Judge Illston’s decision in Swearingen demonstrates the conflict between courts regarding the proper disposition of cases involving “evaporated cane juice” allegations under the primary jurisdiction doctrine. Ironically, and contrary to its purpose, the primary jurisdiction doctrine will not be uniformly applied to “evaporated cane juice” cases until or unless the Ninth Circuit steps in or the FDA issues (or definitively declines to issue) guidance on the use of “evaporated cane juice” on food labels.