Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Mo.: FDA has primary jurisdiction in almond milk mislabeling claims, (Apr 15, 2016)

By Edward L. Puzzo, J.D.

The Food and Drug Administration has primary jurisdiction over claims that Blue Diamond's almond milk product labeling was misleading and deceptive, as they are scheduled to soon release guidance on the challenged labeling terms, the federal district court in St. Louis has ruled (George v. Blue Diamond Growers, April 14, 2016, Jackson, C.).

Paul George brought a putative class action against Blue Diamond Growers, manufacturers of "Almond Breeze" almond milk, in Missouri state court. George alleged that the terms "all natural" and "evaporated cane sugar" on the product labeling violated Food and Drug Administration (FDA) guidelines, and was a deceptive and unfair trade practice under the Missouri Merchandising Practices Act (MMPA), because the listed product ingredients included artificial ingredients. He sought to certify a class consisting of all persons in Missouri who had purchased Almond Breeze during the prior five years.

Blue Diamond had the case removed to federal district court pursuant to the Class Action Fairness Act (CAFA), and now moved to stay or dismiss the action pursuant to the alleged primary jurisdiction of the FDA.

CAFA jurisdiction. The court found that Blue Diamond had adequately pleaded the requirements for jurisdiction under CAFA by pleading that it was a California corporate citizen, diverse from plaintiff's Missouri citizenship; that the putative class contained at least 100 members; and that the amount in controversy exceeded $5 million.

Primary jurisdiction. The court explained that primary jurisdiction, a common law doctrine, allows a court with jurisdiction to refer a case to an appropriate administrative agency for an initial decision, where the expert and specialized knowledge of the agency could provide desirable uniformity in decision-making.

Plaintiff's case centered on his allegation that Blue Diamond's use of the terms "all natural" and "evaporated cane sugar" violated nonbinding guidance by the FDA regarding the use of the term "natural." The court noted that several misbranding cases against food manufacturers had been brought in various courts over the use of the labeling terms challenged here. In March 2014 and November 2015 respectively, the court noted, the FDA had reopened the comment period on the terms "evaporated cane juice" and "natural." The FDA's actions clearly indicated that the agency was exercising its authority in this area and led those courts to apply the primary jurisdiction doctrine. The Ninth Circuit also recently ruled that the scope and permissible usage of the challenged terms with food products "implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch."

In light of the FDA’s ongoing examination of the appropriate regulation of the terms that form the basis of plaintiff’s claims in this lawsuit, and because the FDA has indicated that it intends to issue final guidance on the term “evaporated cane juice” by the end of 2016, the court found that it was appropriate to defer to the agency on this matter under the primary jurisdiction doctrine. The court therefore granted Blue Diamond's motion to dismiss or stay the case.

The case is Civil Action No. 4:15-cv-00962-CEJ.

Attorneys: Matthew H. Armstrong (Armstrong Law Firm, LLC) for Paul George. James Muehlberger (Shook and Hardy, LLP) for Blue Diamond Growers.

Companies: Blue Diamond Growers

Cases: Advertising MissouriNews