United States: Primary Jurisdiction Is Gaining Some Weight In The Food Court

Keywords: consumer class actions, food, beverage, labels, cane juice, food class actions

The plaintiffs' bar continues to file consumer class actions challenging food and beverage labels en masse, especially in the Northern District of California—also known as the "Food Court." One particular line of cases—at least 52 class actions, at last count—targets companies selling products containing evaporated cane juice. The battle over evaporated cane juice has become the latest front in the war over whether federal courts should apply the primary-jurisdiction doctrine and dismiss or stay food class actions while awaiting guidance from the federal Food and Drug Administration.

In these cases, plaintiffs allege that the term "evaporated cane juice" is misleading because (in their view) it disguises the fact that the ingredient is a type of "sugar"; they contend that the ingredient  should be identified as "sugar." Their theory rests almost entirely on a draft guidance that the FDA issued in 2009, in which the agency proposed the ingredient be called "dried cane syrup" (notably, not "sugar"), and invited public comment on the issue. That guidance suggested that the name "evaporated cane juice" not be used because it suggests the ingredient is a juice.

In response to these lawsuit, many defendants have emphasized that the FDA's 2009 guidance not only is non-binding, but that the existence of the guidance establishes that the FDA is examining the precise issue underlying plaintiffs' theory of liability. Accordingly, defendants argue, courts should let the agency finish its work. Or, put another way, because the federal Food, Drug, and Cosmetic Act squarely authorizes the FDA to regulate the names of ingredients as part of its power to prescribe uniform national standards for food labels, the issue is within the FDA's "primary jurisdiction." Thus, as we have contended in advancing the primary-jurisdiction argument, the issue should be decided by an expert agency, not via litigation brought by profit-motivated consumer class action lawyers.

How have these arguments fared? Because the FDA did not take action for over four years after issuing the 2009 draft guidance, plaintiffs had a great deal of success in convincing courts that the FDA was not actively addressing the evaporated-cane-juice issue further and therefore that applying the primary-jurisdiction doctrine was inappropriate.

All that changed in March 2014, when the FDA published a notice in the Federal Register reopening the comment period on the 2009 draft guidance and emphasizing that it has "not reached a final decision on the common or usual name for" evaporated cane juice and that it "intend[s] to revise the draft guidance, if appropriate, and issue it in final form." [Our firm recently filed a comment with the FDA on this issue.]

As if a light had been switched on, virtually every court to consider the issue since the March notice—at least 10 class actions so far—has ruled in favor of deferring to the FDA's primary jurisdiction in evaporated-cane-juice cases. This overwhelming trend is welcome news.

But from our perspective, the fact that the FDA recently reiterated its interest in this area should not have been necessary to trigger the primary-jurisdiction doctrine. Indeed, even before the March 2014 notice, the question of the proper labeling of evaporated cane juice was one within the primary jurisdiction of the FDA, as at least one court recognized.

To be sure, as one judge has put it, whether the FDA (or another regulatory agency) "has shown any interest in the issues presented by the litigants" appears to be an "unofficial fifth factor" that influences courts grappling with whether primary jurisdiction should be applied in a given case. Greenfield v. Yucatan Foods, L.P., — F. Supp. 2d –, 2014 WL 1891140, at *4-5 (S.D. Fla. May 7, 2014). But this "unofficial fifth factor" is neither necessary nor part of the four, well-recognized factors for applying primary jurisdiction: "(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 an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration." Clark v. Time Warner Cable, 523 F.3d 1110, 1115 (9th Cir. 2008).

The same factors were satisfied in the evaporated-cane-juice context even before the March 2014 notice.  And—speaking more generally—uncertainty over when the FDA will act should not be treated as an invitation for different courts to apply different state laws and develop differing labeling regimes.

Here's hoping for a few more helpings of primary jurisdiction at the Food Court—and a few more scoops of uniformity and certainty for the food and beverage industry.

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Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2014. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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