Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Beverage ingredient labeling class action dismissed, (Dec 11, 2013)

By Edward L. Puzzo, J.D.

A class action regarding the allegedly deceptive use of the term “evaporated cane juice” on labeling of plant-based and dairy beverages has been dismissed on res judicata grounds by the federal district court in San Francisco (Ang v. Whitewave Foods, December 10, 2013, Conti, S.).

Alex Ang and Kevin Avoy, on behalf of a putative class, alleged that defendants Whitewave Foods, Dean Foods and Horizon Organic Dairy violated the California Unfair Competition Law (UCL), the California False Advertising Law (FAL), and the California Consumers Legal Remedies Act (CLRA), by (a) selling Silk brand plant-based beverages, and Horizon brand yogurt and milk products, deceptively using the term “evaporated cane juice” as an ingredient instead of the terms “sugar” or “dried cane syrup”; and (b) selling Silk brand plant-based beverages, such as soy milk, almond milk and coconut milk, deceptively using the term “milk” for products that did not contain cow’s milk.

Florida class action. Prior to the filing of this action, another food-labeling class action against the same defendants, also alleging improper use of the “evaporated cane juice” term, was filed in the U.S. District Court for the Southern District of Florida. On April 19, 2013, that court preliminarily approved a class action settlement, defining the settlement class as all persons who had purchased “evaporated cane juice”-labeled products from the defendants since January 1, 2005. The plaintiffs in this case were included in this class, the court stated, did not object to the settlement within the time set forth by the Florida district court, and the settlement was given final approval by that court on June 28, 2013. An effort by the plaintiffs in this case to set aside the Florida settlement was denied on October 8, 2013.

Evaporated cane juice claims and res judicata. The defendants here moved to dismiss the claims because they were raised or could have been raised in the previous Florida class action. Res judicata, the court explained, will bar an action when there is identity between the parties and the claims in both actions, and a final judgment on the merits has been made. Here, the plaintiffs were clearly members of the class in the Florida case against the same defendants, and arguments that they were inadequately represented or were provided inadequate notice were already been rejected by that court, so there was identity of the parties. Both class actions involve the “evaporated cane juice” term in defendants’ products, so there is identity of claims in that respect. Finally, the Florida class action settlement is final. Consequently, the court ruled, the res judicata requirements were met here with regard to the “evaporated cane juice” claims, the plaintiffs’ claims are barred, and defendants’ motion to dismiss granted in that respect.

Milk claims and res judicata. The court separately considered whether or nor res judicata applied to the claims regarding the use of the term “milk” for plant-based beverages. The Florida class action, the court noted, concerned the use of “evaporated cane juice” in dairy milk products, not, as here, the allegedly deceptive nature of the use of the term “milk” for plant-based beverages. Thus, the court ruled, there was not an identity of claims with regard to the milk claims, so they were not barred by res judicata.

Plausibility. The plaintiffs alleged that defendants’ use of terms such as soymilk and almond milk violated the standard of identity, the requirement that food products be marketed using a prescribed name, for milk. The court opined that the FDA has yet to arrive at a consistent terminology for milk substitutes, and that terms such as “soymilk” and “almond milk” accurately described the products in a manner not deceptive to consumers. The court found it simply implausible that a consumer would confuse a product such as soy milk or almond milk with dairy milk, because of the clear use of modifiers such as” soy” and “almond”. The claims regarding milk must therefore fail under the reasonable consumer test. Consequently, the court also dismissed the plaintiffs’ milk claims.

The case is Civil Action No. 13-cv-1953.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Alex Ang. Angela Christine Agrusa (Liner Yankelevitz Sunshine & Regenstreif LLP) for Whitewave Foods Co.

Companies: Whitewave Foods Co., Dean Foods Co., Horizon Organic Dairy LLC.

Cases: StateUnfairTradePractices Advertising CaliforniaNews