Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Natural frozen food consumer successfully reopens “evaporated cane juice” case, (Jul 9, 2014)

By Greg Hammond, J.D.

A consumer in a class action suit, alleging claims of deceptive practices and false advertising against frozen natural food company Amy’s Kitchen, Inc., has successfully reopened his case and received a stay in lieu of dismissal. In partially granting the consumer’s motion to alter or amend an order for dismissal, the federal district court in San Francisco determined that the class of consumers would be disadvantaged by the dismissal and that staying the case would be a more appropriate action (Figy v. Amy’s Kitchen, Inc., July 7, 2014, Illston, S.).

Background. Robert Figy filed a consumer class action against Amy’s Kitchen, alleging that the natural and organic food company markets and sells a number of products listing “evaporated cane juice” (ECJ) as an ingredient on the products’ labeling. According to Figy, the use of the term ECJ violates the Food and Drug Administration’s (FDA) regulations and California’s Sherman Act by failing to use the common or usual name for ECJ—sugar. Consequently, Figy alleged, in part, violations of California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act.

In April 2014, the district court determined that the FDA had not made any final decisions regarding the use of the term ECJ and consequently dismissed the case pursuant to the doctrine of primary jurisdiction. Figy subsequently filed a motion to alter or amend the judgment, arguing that the court erred in (1) applying the doctrine of primary jurisdiction to his claims and (2) dismissing the case without prejudice rather than staying.

Primary jurisdiction. In support of his first argument, Figy argued that the issue of whether the term ECJ on food labels is permissible is not a question of first impression with the FDA and there are no particularly complicated issues that require the special competence of the agency. However, the court determined that Figy’s argument attempts to relitigate the prior motion to dismiss. Because a Federal Rule of Civil Procedure 59(e) or 60(b) motion cannot be used to relitigate old matters or raise new arguments, the court denied Figy’s motion with regard to the court’s decision to apply primary jurisdiction to his claims.

Case reopened. Figy next argued that a stay of action would be appropriate because he would be disadvantaged by the dismissal and further judicial proceedings may be contemplated. Because there was a strong likelihood that the statute of limitations would run, Figy would likely lose a year or more off the class period, and further judicial proceedings in the action may be contemplated, the court found it appropriate to stay the action pursuant to the doctrine of primary jurisdiction. Consequently, the judgment was set aside, the case was reopened, and the action was stayed.

The case number is C 13-03816-SI.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Robert E. Figy. Dale Joseph Giali (Mayer Brown LLP) for Amy's Kitchen, Inc.

Companies: Amy's Kitchen, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews