United States: Courts Still Searching For Sweet Spot In "Evaporated Cane Juice" Cases: Confusion Over Applicability Of Primary Jurisdiction To ECJ Claims Continues

May 2014 was an active month for evaporated cane juice ("ECJ") litigation in the U.S. District Court for the Northern District of California. Six courts issued opinions that involved the application of the primary jurisdiction doctrine to ECJ claims. The primary jurisdiction doctrine allows courts to stay or dismiss a complaint without prejudice, pending the resolution of an issue within the special competence of an administrative agency. Many defendants have moved to dismiss ECJ claims based on this doctrine.

As previously reported here, courts in the Northern District have taken different positions on the propriety of dismissing or staying ECJ cases under the primary jurisdiction doctrine. The divide has widened since the Food and Drug Administration ("FDA") reopened the notice and comment period on the use of "ECJ" on March 5, 2014. The six opinions issued in May 2014 demonstrate both that the judges of the Northern District may be moving closer to uniformity on this issue, but also that differing opinions still exist.

Two Courts Differ on Need to Reconsider Orders Issued Prior to the FDA's March 2014 Notice.

In Swearingen v. Yucatan Foods, L.P., C 13-3544 RS, 2014 U.S. Dist. LEXIS 72575 (N.D. Cal. May 20, 2014), Judge Seeborg granted defendant's motion for reconsideration of a previous order, which had denied defendant's motion to dismiss an ECJ claim on the primary jurisdiction doctrine. Judge Seeborg noted that the FDA's March 2014 notice indicates that the FDA is "actively engaged" with the ECJ issue, and that the FDA "intends to issue final guidance after the comment period closes." Application of the primary jurisdiction doctrine was thus appropriate due to the need for uniformity in decisions, and in light of the particular expertise the FDA may provide in issuing guidance on the use of the term ECJ in food labeling.

Magistrate Judge Grewal reached a different conclusion in Samet v. P&G, 5:12-cv-1891-PSG, 2014 U.S. Dist. LEXIS 62672 (N.D. Cal. May 5, 2014). In Samet, one defendant moved for reconsideration of a prior order denying a motion to dismiss ECJ claims based on the primary jurisdiction doctrine. Defendant argued that the FDA's March 2014 notice constituted "a material difference in fact or law" and warranted reconsideration. Magistrate Judge Grewal rejected that argument, noting that the court's prior order held that the allegations were "sufficient to proceed no matter what final guidance may be issued by the agency." (emphasis in original). Accordingly, the court denied the motion for reconsideration.

Four Courts Dismiss or Stay ECJ Claims Based on the Primary Jurisdiction Doctrine.

In Swearingen v. Attune Foods, Inc., C 13-4541 SBA, 2014 U.S. Dist. LEXIS 68558 (N.D. Cal. May 15, 2014), Judge Armstrong held that dismissal of an ECJ claim was appropriate under the primary jurisdiction doctrine. In light of the FDA's March 2014 notice, Judge Armstrong found that the primary jurisdiction doctrine applied to plaintiff's ECJ claim for the following reasons: (1) food labeling is within the special competence of the FDA; (2) the FDA has not resolved the issue of whether ECJ is the common or usual name of the relevant ingredient; (3) the FDA is involved in active rulemaking; and (4) deferring to the FDA will allow courts to benefit from the FDA's expertise on food labeling and will ensure uniformity in administration of FDA regulations. Judge Davila agreed in Avila v. Redwood Hill Farm & Creamery, Inc., 5:13-CV-00335-EJD, 2014 U.S. Dist. LEXIS 69378 (N.D. Cal. May 19, 2014), finding application of the primary jurisdiction doctrine appropriate "in light of the FDA's March 5, 2014 notice."

Two other courts, also reviewing motions to dismiss, granted the motions in part and stayed the actions. See Figy v. Lifeway Foods, Inc., 13-cv-04828-THE, 2014 U.S. Dist. LEXIS 62700 (N.D. Cal. May 5, 2014); Swearingen v. Late July Snacks LLC, C-13-4324 EMC, 2014 U.S. Dist. LEXIS 74114 (N.D. Cal. May 29, 2014). Both Judge Henderson and Judge Chen, who decided Figy and Late July, respectively, noted that deferring to the FDA's guidance would enhance the court's decision-making efficiency and help ensure consistency in application of the law.

Though the Northern District seems to be nearing uniformity in its application of the primary jurisdiction doctrine to stay or dismiss ECJ cases, deviations have allowed some cases to progress. See, e.g., Werdebaugh v. Blue Diamond Growers, 12-CV-2724-LHK, 2014 U.S. Dist. LEXIS 71575 (N.D. Cal. May 23, 2014) (certifying a class of California consumers alleging violations of various laws based on defendant's use of the term ECJ). The comment period for this new round of ECJ comments closed on May 5, 2014. Until the FDA issues definitive guidance on this issue, it seems that confusion over the application of the primary jurisdiction doctrine will continue.

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