Two More Food Labeling Class Action Rulings: Harbingers Of The New Year?

Originally posted at WLF's Legal Pulse Blog

In our commentaries on regulation-by-litigation of food labeling, one issue has predominated this year: What is a "reasonable consumer"? Two court decisions issued on consecutive days last week, one from the infamous Food Court (the Northern District of California) and the other from the Southern District of Florida, turned in large part on that issue and indicate that judges will continue addressing the question in 2014.

You Mean They're Not from Cows? Ang v. Whiteway Foods, authored by Judge Conti of the ND of California, involved consumer fraud claims against the maker of soymilk/almond milk/coconut milk and related yogurt products. The plaintiffs challenged the use of the term "milk" in the products as well as ingredient references to "evaporated cane juice" (ECJ).

Judge Conti found that an earlier settlement in a similar Florida lawsuit barred Mr. Ang's ECJ-based claims due to res judicata. He then turned to the soy/almond/coconut "milk" claims. He first found that federal labeling rules preempt Mr. Ang's claims. Federal rules do not prescribe how the plant-based beverages must be labeled, and the rules relating to "milk" only "pertain to what milk is, rather than what it is not." In such situations, federal rules require that products use "the common or usual name" for the food. Judge Conti found that the "Silk" drink makers did that, and thus Mr. Ang's suit would improperly impose rules beyond what FDA requires.

The judge also found that the claims "fail for the additional reason that they are simply not plausible" under California consumer protection statutes and federal pleading standards. Yes, the word "milk" is there, Judge Conti agreed. But that the plaintiffs could entirely disregard the words prior to milk "stretches the bounds of credulity." He added:

Under Plaintiffs' logic, a reasonable consumer might also believe that veggie bacon contains pork, that flourless chocolate cake contains flour, or that e-books are made out of paper.

Judge Conti then mercifully dismissed Mr. Ang's claims with prejudice.

Cane as in Sugar, not as in Walking Stick. In Reilly v. Amy's Kitchen, the plaintiff alleged that the term "evaporated cane juice" in the ingredient lists of Amy's Kitchen products like veggie burgers, pizzas, and enchilada's misled her and others into paying a premium for those products. After refusing to dismiss the claims under the primary jurisdiction doctrine, Judge Cohn then considered whether the term ECJ was misleading under Florida consumer protection laws.

Judge Cohn punted on that issue, ruling that he could not decide the factual question of "whether reasonable consumers were actually deceived by the use of the term ECJ" on a motion to dismiss. While rejecting the defendant's arguments, Judge Cohn possibly revealed his thoughts on the matter by referencing a 2009 FDA "Draft Guidance" and several warning letters relating that ECJ was "false and misleading."

We think Judge Cohn should have taken the lead of Judge Conti in Ang and ruled that as a matter of law, no reasonable consumer would think that evaporated cane juice is anything but a sugar-based sweetener. It "stretches the bounds of credulity" that anyone, upon viewing the food label and seeing that products contain sugar, would fail to understand that cane juice = sugar. This is especially true in south Florida, the heart of America's cane sugar-producing region, where they know cane in food means sugar, and not a walking stick.

We must, however, applaud Judge Cohn for his ruling on the issue of standing. Ms. Reilly admitted that she only purchased 3 of the 60 products her suit challenges. Despite that, she claimed to have standing to bring claims based on all 60 products because the other 57 purchased by unnamed class members were "nearly identical" to the 3 she bought. Judge Cohn rejected this argument, applying a U.S. Court of Appeals for the Eleventh Circuit precedent which demands that the named plaintiff establish standing for each and every claim.

One resolution The Legal Pulse hopes the Ninth Circuit has for the New Year is to establish a similar precedent on unpurchased goods. In the mislabeling suits filed in The Food Court and the other California federal districts, named plaintiffs can sue based on alleged harms from products they never bought as long as those products are "substantially similar across the product line." That flies in the face of the basic constitutional principle that one can only seek redress in court for actual harms.

One and a half good rulings: perhaps a good sign for the year ahead.