Health Law Daily Wrap Up, ADVERTISING (FOOD, DRUG & MEDICAL DEVICES)—7th Cir.: Allulose is a sugar under federal law, suit plausibly alleged deception by Chobani, (Jul 31, 2026)

By Justin Marcus Smith, J.D.

The fact that the FDA indicated it would not enforce sugar labeling requirements with respect to allulose should not have led Chobani to believe the states would take a similar approach.

Yogurt manufacturer Chobani, LLC (Chobani) was a sophisticated actor and should have been aware that Food and Drug Administration (FDA) decisions about sugar labeling enforcement discretion would not immunize the company from suits based on state law, held the U.S. Court of Appeals for the Seventh Circuit, in reversing dismissal of a consumer class action. The federal requirements at issue were plain that food products cannot be labeled sugar free unless they have less than half a gram of sugar where sugars include every monosaccharide, including allulose. Drawing on amicus input from the FDA, the court concluded allulose had to be included in the definition of sugar. A parenthetical list of monosaccharides in the applicable regulation was non-exhaustive and included the allulose chemistry. Accordingly, there was no federal preemption of state law. The district court erred in finding preemption first because the regulation was not ambiguous, hence there was no plausible reason for deference to pre-suit FDA guidance that was strictly about enforcement discretion, especially in light of conflict with an earlier FDA position. Second, FDA enforcement guidance did not have controlling weight. As for whether the complaint failed to state a claim, the allegation that “sugar free” labeling fooled consumers was not implausible. The merits would have to wait for completion of discovery, but in the meantime, Chobani could raise other arguments for dismissal for failure to state a claim on remand (Franco v. Chobani, LLC, No. 25-2087 (7th Cir. Jul. 27, 2026)).

Two consumers brought a class action under dozens of state consumer protection laws accusing Chobani, LLC (Chobani) of falsely advertising its Chobani Zero Sugar yogurt as sugar free despite the inclusion of allulose in the recipe. The consumers’ claims depended on whether allulose is a sugar within the meaning of 21 C.F.R. § 101.9(c)(6)(ii). If allulose is not a sugar as defined, the Federal Food, Drug, and Cosmetic (FDCA) Act of 1938 would expressly preempt the state law claims of the class action.

Chobani moved to dismiss under Fed. R. Civ. P. 12(b)(6) for FDCA preemption. The complaint alleged everything necessary for the district court to evaluate the preemption affirmative defense. The district court deferred to enforcement guidance from the U.S. Food and Drug Administration, found preemption, and dismissed the case. The district court did not address whether the consumers plausibly alleged deception.

The consumers appealed to the Seventh Circuit. Applying de novo review, the Seventh Circuit reversed. While the district court did not address whether the consumers plausibly alleged deception, the Seventh Circuit said it could affirm on any ground supported by the record.

After considering whether the consumers plausibly alleged deception in addition to Chobani’s preemption argument, the Seventh Circuit reversed on the basis that allulose is a sugar under the relevant federal regulation.

The court elaborated that the FDCA authorizes the FDA to establish food labeling rules, including the labeling standards for sugar. The FDA also regulates when food may be labeled “sugar free”. The pertinent regulation, § 101.9(c)(6)(ii), requires the Nutrition Facts panel to include a statement of the number of grams of sugars in a serving, unless under 1 gram per serving without a claim about sweeteners, sugars, or sugar alcohol content. The regulation defines total sugars as the sum of all free mono- and di-saccharides.

The FDA also regulates when a manufacturer may label food sugar free under § 101.60(c)(i). This regulation says a food may not be labeled “sugar free” or “zero sugar” or the like unless it contain less than 0.5 grams of sugars as defined under § 101.9(c)(6)(ii) and meets other requirements.

The court continued that the FDA has expressed a view on several occasions about whether allulose is a sugar under § 101.9(c)(6)(ii). In a 2016 rulemaking, the agency observed that the final rule did not reach a decision about excluding allulose from the definition of sugar; however, the agency said allulose must be included in the total sugars declaration as a monosaccharide, pending any future rulemaking otherwise. Four years later, the FDA issued more guidance that it would exercise enforcement discretion with respect to the labeling exclusion of allulose from Total Sugars and Added Sugars, again pending rulemaking.

At oral argument, both parties agreed that FDA perspective would be helpful, and on appeal, the Seventh Circuit said it asked the FDA to weigh in. The FDA filed an amicus brief taking the following three positions: (1) allulose is a monosaccharide for the total sugars definition; (2) heretofore it had only stated an enforcement position; and (3) the parenthetical list of example monosaccharides in the regulatory definition of Total Sugars was non-exhaustive.

The Seventh Circuit held allulose is a monosaccharide under the regulatory definition of Total Sugars.

The Seventh Circuit said it found the FDA reasoning about it persuasive and consistent with prior statements.

Chobani argued, relying on the surplusage and noscitur a sociis canons, that the parenthetical list of monosaccharides in the regulatory definition of Total Sugars was exhaustive and therefore did not include allulose. However, the Seventh Circuit reasoned that the words “such as” defined a class, by way of chemistry, which the FDA then reinforced through a list of examples sharing the same chemistry.

Cases Chobani cited were distinguishable because they involved laws that did not define a term, defined a term only by way of a list, or where a term appeared only in a list. The instant regulation did not present the same interpretive problems. It defined a term and then provided examples, whereas Chobani did not assert that a definition of sugars including all monosaccharides would lead to absurd results. The FDA also specifically invoked the language of chemistry, so common parlance was not persuasive. Contextual evidence from other regulations, referring to physiological considerations, could not override the plain language of the regulation at issue.

The Seventh Circuit said the district court also erred in two ways when it found § 101.9(c)(6)(ii) ambiguous. First, the regulation is not ambiguous, so there was no plausible reason for deference to FDA guidance, especially in light of conflict with a prior FDA position. Second, the FDA guidance did not have controlling weight.

Chobani contended it relied on the FDA guidance, but the Seventh Circuit found the guidance was only a statement about enforcement discretion, it did not involve rulemaking. That meant the original definition of sugar remained in force. Chobani should not have relied otherwise based on enforcement discretion, especially not for the preemption of state laws. There was no preemption. Chobani could bring up other R. 12(b)(6) grounds for dismissal, grounds it did not raise in the district court, on remand.

In the alternative, Chobani argued for dismissal because the complaint did not plausibly allege consumer deception. The consumers would have to prove literal falsity or that reasonable consumers were likely misled, but the Seventh Circuit declined to consider the merits at the dismissal stage. Questions about how reasonable consumers understand labels may not be answered as a matter of law simply based on lawyerly interpretation.

The consumers were entitled to present evidence of actual consumer deception. According to the complaint, the Chobani labels said the product was sugar free even though it allegedly had four grams per serving of sugar in the form of allulose. It also alleged deception.

Chobani arguments about whether consumers cared about monosaccharides were off-point because the question at hand was whether product labeling deceived them. The allegation that consumers were fooled about a “sugar free” representation was not implausible. It might turn out that consumers do not consider promises about sugars to refer to allulose, but that was a question of fact for the summary judgment phase.

The Case is No. 25-2087.

Judge: Kirsch, T.

Attorneys: Alexander H. Burke (Burke Law Offices, LLC) for Jason Franco. Sebastian Laguna (Weil, Gotshal & Manges LLP) for Chobani, LLC.

Companies: Chobani, LLC

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