Court Leans on FDA, Dismisses Evaporated Cane Juice Labeling Lawsuit

WASHINGTON—On March 5, 2014, the U.S. Food and Drug Administration (FDA) issued a notice in the Federal Register, reopening a comment period for draft guidance on the term evaporated cane juice.

The notice was a fortuitous development for Santa Cruz Natural, Inc., helping to persuade a federal judge in California to dismiss a lawsuit filed against the company, which claimed use of evaporated cane juice (ECJ) on its labels of Lemonade Soda, Orange Mango Soda and other beverages was false and misleading.

In a proposed class-action lawsuit, plaintiffs allege Santa Cruz Natural violated FDA regulations, which require food labels use the common name of ingredients and that the common name of evaporated cane juice is sugar. Plaintiffs have relied on 2009 draft guidance from FDA, which expressed the view that "sweeteners derived from sugar cane syrup should not be declared as 'evaporated cane juice' because that term falsely suggests that the sweeteners are juice."

In a similar lawsuit filed last year against Trader Joe's, food and beverage lawyer Justin Prochnow of Greenberg Traurig LLP pointed out that FDA draft guidance is not legally binding but indicative of how FDA will apply the law.

On April 2, Susan Illston, a U.S. District Judge, dismissed the lawsuit against Santa Cruz Natural without prejudice. In reliance on a doctrine known as "primary jurisdiction", Illston held FDA is the appropriate body to address the issue concerning use of the term ECJ on food labels.  

"The [Federal Register] notice states that the FDA has not resolved the issue of whether ECJ is the common or usual name of the ingredient at issue and that the FDA is engaged in active rulemaking on the issue," the judge wrote. "Further, the determination of whether ECJ is the common or usual name of the ingredient involves consideration of ECJ's method of production, the difference between ECJ and other sweeteners, and its basic characterizing properties. Resolution of these issues requires the expertise of the FDA."

The case is Mary Swearingen and Robert Figy v. Santa Cruz Natural Inc., C 13-04291, U.S. District Court for the Northern District of California.

In the Federal Register notice, FDA disclosed it was reopening the comment period on its draft guidance to obtain further information and data in order to better understand the following: the basic nature and characterizing properties of ECJ; the method of production of the ingredient; and the difference between ECJ and other sweeteners that are made from sugar cane, such as molasses, raw sugar, brown sugar, turbinado sugar, muscovado sugar and demerara sugar.

After receiving the comments, FDA plans to revise the draft guidance, and possibly, issue the guidance in final form, which could help the courts resolve a number of lawsuits over the term ECJ.