The U.S. Court of Appeals for the Ninth Circuit today placed on hold a consumer class action involving yogurt labels until the FDA issues final guidance on use of the terms at issue in the dispute—a decision that could ripple outward to the many other food and beverage cases alleging deceptive labeling.
The plaintiffs in Kane v. Chobani, LLC, No. 14-15670, alleged that Chobani deceptively labeled its yogurt as “natural” in violation of FDA regulations, and improperly used the term “evaporated cane juice” to describe the yogurt’s added sugar ingredient. But because the FDA is currently considering the scope and permissible usage of both terms, the court ordered a stay “until such time as the [FDA] completes its proceedings regarding the use of the terms . . . in food labeling.” The use of both terms “implicates technical and policy question that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch,” the court wrote, noting that it made no sense—and would be inefficient—to continue litigating the case while the FDA was mulling questions at the heart of the litigation.
Today’s ruling directly applies only to the Kane case, but other courts are likely to follow a similar path while awaiting guidance from regulators, rather than expending time and energy on continued litigation that could be rendered moot. The stay comes as other courts within the 9th Circuit and elsewhere are considering similar class actions involving alcoholic beverages, including from consumers claiming they were misled by labels calling popular products “handmade.” Although there are currently no pending FDA proceedings considering use of the term “handmade,” cases involving that word could also end up subject to a stay if that changes. As it is, some courts have dismissed such claims on the grounds that no reasonable consumer can believe spirits brands are “handmade” or because the use of such terms is non-actionable “puffery,” but others have been allowed to proceed.