Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Primary jurisdiction lies with FDA in evaporated cane juice dispute, (Apr 10, 2014)

By Patricia K. Ruiz, JD

The Northern District of California dismissed a class action lawsuit alleging violations of FDA regulation and California state law stemming from the use of the term “evaporated cane juice” on product labels. Because the FDA has not made any final decisions regarding the use of the term, the court determined that primary jurisdiction lies with the agency (Figy v. Amy’s Kitchen, Inc., April 9, 2014, Illston, S).

Background. Robert E. Figy, individually and on behalf of similarly situated individuals, filed a consumer class action suit against Amy’s Kitchen, Inc. (Amy’s) alleging that Amy’s used the terms “evaporated cane juice” and “organic evaporated cane juice” (ECJ) instead of the term “sugar” to make its products seem healthier, in violation of federal Food, Drug, and Cosmetic Act (FDC Act) regulations requiring food labels to reflect the common or usual name of an ingredient. Violations of FDA regulations also constitute violations of California’s Sherman Law, Figy alleged.

Primary jurisdiction. Amy’s moved to dismiss Figy’s First Amended Complaint, arguing that because the FDA has not finalized its position on the term ECJ, primary jurisdiction requires that the court defer to the FDA and dismiss the action. Traditionally, when determining if primary jurisdiction applies, the following factors must be examined: “(1) [a] need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects and industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration,” according to the court.

Citing an FDA notice in the March 5, 2014, Federal Register reopening the comment period for the draft guidance on the use of ECJ, the court determined that the FDA has not resolved the issue of whether ECJ is the common or usual name of the ingredient in question. Thus, the court stated, “applying the doctrine of primary jurisdiction allows the Court to benefit from the FDA’s expertise on food labeling and will ensure uniformity in administration of the regulations.”

The case is No. 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: StateUnfairTradePractices CaliforniaNews