In Trader Joe's Lawsuit, Plaintiffs Lean on FDA Guidance

SAN FRANCISCOIs the term "evaporated cane juice" false and misleading to consumers?

The U.S. Food and Drug Administration (FDA) thinks so, giving litigators ammunition in a case that was recently filed against Trader Joe's in a California federal court.

A proposed class-action lawsuit accuses the retail specialty grocery chain of making false and deceptive claims in violation of California and federal laws by concealing the fact that evaporated cane juice listed on yogurt labels is really "sugar" or "dried cane syrup."

A spokesperson for Trader Joe's didn't respond Wednesday to a request for comment on the lawsuit, which includes a number of other allegations. (The complaint (CV-13-1333) was filed in the U.S. District Court for the Northern District of California, San Francisco Division).

Plaintiffs are relying on a 2009 guidance document from FDA, which states that evaporated cane juice is a sweetener derived from sugar cane syrup. Companies should not refer to the sweetener by a name that suggests the ingredient is juice, the agency advised companies. FDA also has sent warning letters to companies, reiterating its previous guidance that "evaporated cane juice is not the common or usual name of any type of sweetener."

Justin Prochnow, a lawyer specializing in food and beverage law, points out FDA's draft guidance is not legally binding and it doesn't guarantee plaintiffs in the Trader Joe's case will prevail. But in a regular email update to clients and others, he stated the guidance document is indicative of how FDA will apply the law.

"Accordingly, it is recommended that companies review the guidance before labeling a product in this manner," wrote Prochnow, a Colorado-based shareholder with Greenberg Traurig, LLP, an international law firm.

Marc Sanchez, an Atlanta-based lawyer who specializes in FDA-related issues, said a series of Supreme Court cases have given rise to a doctrine that accords "respect" rather than "judicial deference to informal guidance from agencies." But a minority of courts, and scholars, take the view that such informal guidance should be "given controlling weight unless it is 'plainly erroneous or inconsistent with the regulation,'" the lawyer explained, quoting the 1945 Supreme Court decision in Bowles v. Seminole Rock & Sand Co.

"Depending on the court, FDA guidance will either receive respect or something closer to judicial deference," Sanchez, founder of Contract In-House Counsel & Consultants, LLC, stated.

Will Woodlee, a Washington, D.C.-based attorney who counsels FDA-regulated companies, said the degree of deference a court would give the guidance depends, in part, on whether the guidance is in draft form or final.

"Because this is draft guidance, I wouldn't expect it to play a huge role in the court's determination in whether something is false or misleading," said Woodlee, an associate with the law firm Kleinfeld Kaplan & Becker LLP, which concentrates on the regulation of products subject to FDA's jurisdiction. "Even if it were final guidance, it would be one data point among potentially" several factors the court would consider in its legal analysis.

Ben Gore, an attorney representing the plaintiffs in the Trader Joe's complaint, did not respond Wednesday to a request for comment on the FDA guidance document.

The complaint is not the first lawsuit to highlight concerns over use of the term "evaporated cane juice." Chobani, Inc., the yogurt company, was sued last summer over the name and for a number of other reasons.  

In November, Chobani filed a motion to dismiss the complaint before U.S. District Court Judge Lucy Koh. Among the arguments raised in the motion, lawyers for Chobani declared that plaintiffs make an implausible claim, namely that they didn't know evaporated cane juice is a sweetener.

"To any reasonable consumer (and especially a consumer with the apparent concerns over the source of sugars these plaintiffs allegedly had) the word 'cane' in the ingredient list indicates a sweetener ingredient," Dale Giali, a partner with the global law firm Mayer Brown LLP, wrote.

Chobani also argues FDA's 2009 guidance carries no weight in the litigation. Giali explained the document itself undermines plaintiffs' reliance on it because FDA explicitly states the guidance is non-binding and does not confer any rights on an individual.

"Plaintiffs' misguided reliance on the draft, non-binding guidance," the Los Angeles-based lawyer wrote, "is a function of their inability to allege facts demonstrating that evaporated cane juice is not the common or usual name for an ingredient."

Patricia Syverson, a Phoenix-based lawyer representing the plaintiffs in the Chobani litigation, did not respond Wednesday to a request for comment.