Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Class action stayed, pending FDA final guidance on the term “evaporated cane juice”, (Jun 2, 2014)

By Greg Hammond, J.D.

A putative class action against cracker and snack chip food manufacturer Late July Snacks LLC, was stayed under the doctrine of primary jurisdiction, pending the Food and Drug Administration’s (FDA) issuance of final guidance resolving whether the term “evaporated cane juice” (ECJ) is a common or usual name for sugar, the federal district court in San Francisco has decided. Consumers of Late July’s cracker and snack chip food products filed suit against the company, bringing claims under California’s Unfair Competition Law and Consumer Litigation Remedies Act (Swearingen v Late July Snacks LLC, May 29, 2014, Chen, E).

The case was before the district court on Late July’s motion to dismiss the consumers’ first amended complaint on various grounds, including the doctrine of primary jurisdiction. Late July argued that because the FDA reopened the comment period on its 2009 draft guidance titled “Guidance for Industry: Ingredients Declared as Evaporated Cain Juice, Draft Guidance,” dismissal would be appropriate. Specifically, the company argued that dismissal should be granted under primary jurisdiction because: (1) The FDA position on whether ECJ is a common or usual name for sugar has not been resolved; (2) that issue was complex and requires the FDA’s technical expertise; (3) the FDA was currently and actively considering that question; and (4) dismissal of the consumers’ complaint would promote uniformity in food labeling.

Primary jurisdiction. The court agreed that application of the doctrine of primary jurisdiction was appropriate in this case, reasoning that: (1) under the Food, Drug, and Cosmetics Act, the FDA had the regulatory authority and is actively determining whether ECJ is a common or usual name for sugar, which is the central issue in this case; (2) the FDA’s expertise was required to resolve this issue and would enhance the court’s decision-making ability and efficiency; (3) the resulting final guidance on this issue was entitled to some deference; and (4) deferring to the FDA would help ensure that courts are consistently applying the law. Further, because the parties would not be disadvantaged by staying the case, the court partially denied the motion to dismiss and stayed the action.

The case number is C-13-4324 EMC.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Mary Swearingen. Joshua L. Solomon (Pollack Solomon Duffy LLP) for Late July Snacks LLC.

Companies: Late July Snacks LLC

Cases: StateUnfairTradePractices CaliforniaNews