The Revival of ECJ Lawsuits: Sweet Tooth For Plaintiffs, or Toothless Claims?

DronesIntroduction.  On May 22, 2017, plaintiff Jessica Gomez filed an opposition on behalf of a putative class of consumers urging a federal district court judge not to dismiss her lawsuit against Jelly Belly Co. (“Jelly Belly”) for allegedly misleading consumers by listing “evaporated cane juice” (ECJ) instead of “sugar” in the ingredient list of its “Sports Beans” candy.  The Gomez matter suggests that ECJ claims, previously dormant pending FDA’s issuance of final ECJ guidance, are now being filed and litigated since FDA issued its final guidance in May 2016. It remains to be seen, however, whether courts will dismiss these claims at the pleadings or summary judgment stage.

Background on  FDA’s ECJ Guidance.  In 2009, FDA issued draft guidance stating that the term ECJ is false and misleading under Section 403(a)(1) of the FDCA because ECJ “does not accurately describe the basic nature of the food and its characterizing properties (i.e., that the ingredients are sugars or syrups, as required by 21 CFR 102.5.).”  In other words, FDA suggested that ECJ could mislead consumers into believing that a product did not include sugar.  Instead of finalizing its Draft Guidance, FDA reopened the comment period on March 4, 2014.  In the meantime, ­­several lawsuits in the Northern and Central Districts of California were stayed pending FDA’s issuance of its Final Guidance.  (See e.g., The (Not So) Sweet Sound of FDA’s Silence:  Judge Seeks Answers From FDA on ECJ Draft Guidance.)  On May 25, 2016, FDA issued its 2016 ECJ Final Guidance (“2016 Final Guidance”), upholding its previous finding that the use of ECJ is false and misleading and further stating that “sweeteners derived from sugar cane should not be listed in the ingredient declaration by names such as ‘evaporated cane juice,’ which suggest that the ingredients are made from or contain fruit or vegetable ‘juice’ as defined in 21 CFR 120.1.”  After FDA issued the 2016 Final Guidance, stays were lifted in multiple cases, and new complaints have been filed alleging that the use of ECJ, instead of sugar, on an ingredient list violates the FDCA and California’s corresponding Sherman Act.

The Gomez case.  One of these new ECJ lawsuits was filed by Ms. Gomez in February 2017 against Jelly Belly in San Bernadino Superior Court.  Plaintiff alleged that she, and others similarly situated, were misled by Sports Beans’ ingredient list because it lists ECJ rather than sugar.  Plaintiff further alleges that she was harmed because she would not have purchased the Sports Beans, or paid as much for them, had she known that they contained sugar.  She brings claims for violations of California’s CLRA, FAL, UCL, and for negligent misrepresentation under common law.  The lawsuit was removed in March to the Central District of California and assigned to Judge Carney.

Jelly Belly’s Defense:  FDA’s Guidance is Not Binding Law.  Jelly Belly filed a motion to dismiss on April 21, 2017, arguing that Ms. Gomez failed to allege facts sufficient to show that the label was misleading to consumers or that it was material to their decision to purchase the Sports Beans.  In moving to dismiss Plaintiff’s claims, Jelly Belly contends that FDA’s Final Guidance is not binding law.  Indeed, FDA explicitly states that its “guidance documents, including this guidance, do not establish legally enforceable responsibilities,” but instead “describe [FDA’s] current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.”

Plaintiff’s Reliance on FDA’s Guidance.  In response, Ms. Gomez does not dispute that FDA’s 2016 Final Guidance is not binding law.  Instead, she contends that it does not matter, because “the law was settled long ago by the relevant statutes and regulations.”  The FDA’s 2016 Final Guidance simply clarified FDA’s position that the use of ECJ instead of sugar is false and misleading under 21 U.S.C. §343(a)(1) and its accompanying regulations.[1]  Therefore, Plaintiff argues that Jelly Belly’s use of the term ECJ instead of sugar on Sports Beans’ label violates these regulations and §343(a)(1).  FDA’s 2016 Final Guidance was simply underscoring the alleged violation.

Takeaway.  We have written about courts issuing stays on ECJ claims pending FDA’s issuance of the 2016 Final Guidance.  Now that the guidance is finalized, these claims have been revived and, as indicated by Gomez, are still being filed.  Yet it remains to be seen whether ECJ claims can survive motions to dismiss and/or motions for summary judgment.  Indeed, none of the 17 cases filed in the Northern District of California have advanced beyond the pleadings.  In fact, Judge Chen recently dismissed in its entirety the ECJ claim in Swearingen v. Healthy Beverage, LLC because the label of the product at issue included a link to the product’s website, which “specifically states that ‘cane juice is natural sugar.’”[2]  Similarly in Gomez, Jelly Belly argues that ECJ is listed right below the product’s sugar content on the Nutrition Facts Panel, so purchasers of the Sports Beans who read the label would know that it contains sugar.

Although Judge Chen’s holding does not address Ms. Gomez’s argument regarding the FDA’s 2016 Final Guidance, it does suggest that plaintiffs who raise ECJ claims may be required to show that there is no other way for them to know that the product at issue contains sugar.

We will provide updates with relevant developments.

[1] These regulations include the following: (1) 21 C.F.R. § 184.1854 (FDA’s definition of “Sucrose” as “a substance obtained by crystallization from sugar cane or sugar beet juice that has been extracted by pressing or diffusion, then clarified or evaporated”), (2) 21 C.F.R. 104(b)(20) (the common name for “sucrose” is “sugar”), (3) 21 C.F.R. 101.4(a)(1) (ingredients must be referred to by their common or usual name on food labels), (4) 21 C.F.R. 102.5(d) (the common or usual name of an ingredient is the name established by common usage or regulation), and (5) 21 C.F.R. 102(a) (the common or usual name of an ingredient must accurately describe the basic nature of the food or its characterizing properties).

[2] Swearingen v. Healthy Beverage, LLC, et al.,  No. 13-cv-04385-EMC (N.D. Cal. May 2, 2017) (Dkt. No. 92) (order granting motion to dismiss).