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Figy v. Lifeway Foods, Inc.

United States District Court, N.D. California

May 5, 2014

ROBERT E. FIGY, Plaintiff,



Now before the Court is Defendant Lifeway Foods, Inc.'s ("Defendant") motion to dismiss Plaintiff Robert Figy's ("Plaintiff") First Amended Complaint ("FAC"). In light of the parties' joint request to address a recent announcement by the Food and Drug Administration ("FDA") related to the subject matter of the case, the Court ordered supplemental briefing, in which Defendant requested that the Court dismiss or stay the case on the basis of the primary jurisdiction doctrine. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument, and hereby VACATES the hearing previously scheduled for May 12, 2014. For the reasons discussed below, the Court GRANTS IN PART Defendant's motion and STAYS the action pursuant to the doctrine of primary jurisdiction.


Plaintiff brings this suit on behalf of himself and a putative class of consumers who, within the last four years, purchased certain of Defendant's food products that he contends Defendant misbranded by deceptively referring to the added sugar contained in each product as "evaporated cane juice" ("ECJ"). Plaintiff, a resident of San Francisco, California, is a "health conscious consumer who wishes to avoid added sugars' in the food products he purchases." FAC ¶¶ 26, 70, Docket No. 23. Defendant is an Illinois corporation; it is a leading producer of kefir, a retail probiotic dairy beverage and product similar to yogurt. Id. ¶ 27-28. Plaintiff alleges that Defendant uses the phrase ECJ on its packaging to make its products appear healthier than a product containing "added sugar" as an ingredient, which is what Plaintiff asserts ECJ actually is. Id. ¶ 40. Plaintiff alleges that Defendant violates the federal Food, Drug & Cosmetic Act, 21 U.S.C. § 301 et seq. ("FDCA"), as well as accompanying FDA regulations, when it refers to added sugar as ECJ. See FAC ¶¶ 23, 43-52. This is because the FDA requires an ingredient declared on a food label to be listed by its "common or usual name, " 21 C.F.R. § 101.4(a)(1), and evaporated cane juice has a "standard of identity" that is not "juice, " but is sugar or dried cane syrup. FAC ¶ 46. Plaintiff contends that listing sugar as ECJ is false and misleading because it fails to reveal the basic character of the food and its properties. Id. (citing 21 U.S.C. § 343(a)). Plaintiff further alleges that Defendant's failure to comply with these FDA regulations violates California's Sherman Food Drug & Cosmetic Law, Cal. Health & Safety Code § 109875, et seq. ("Sherman Law"). Plaintiff argues that the Sherman Law incorporates the FDCA regulations requiring that ingredients on food labels be identified by their "common or usual name, " mandates that a product not listed by its common or usual name is misbranded, and prohibits the sale of misbranded products. FAC ¶¶ 47, 57-69 (citing 21 U.S.C. § 343(g) & (i), 21 C.F.R. § 101.4(a), Cal. Health & Safety Code § 110725(a)). Based on these allegations, Plaintiff brings claims under California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 ("UCL"), California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500, et seq.; the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et seq., and claims for breach of express and implied warranties, negligent misrepresentation, negligence, unjust enrichment, recovery in assumpsit, and declaratory relief.


Defendant moves to dismiss the FAC on several grounds, including based on the doctrine of primary jurisdiction. Defendant argues that because food labeling is within the special competence of the FDA, and the FDA is presently examining the very issue of the propriety of labeling ECJ - which is central to all of Plaintiff's claims - the Court should invoke the primary jurisdiction doctrine and dismiss or stay the pending action. Plaintiff contends that the primary jurisdiction doctrine, and any guidance resulting from the FDA's present deliberations, would not change the FDA's "consistent and unwavering" position that ECJ is not the common or usual name of sugar or cane syrup, or the question of whether listing ECJ on food labels violates the law. Supp. Opp'n at 3, Docket No. 38. For the reasons discussed below, the Court concludes that the primary jurisdiction doctrine applies.

A. The Primary Jurisdiction Doctrine

"The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency." Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). This "prudential" doctrine enables a court to determine that "an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch." Id. (citing Syntek Semiconductor Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 782 (9th Cir. 2002)). "[I]t is to be used only if a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency, and if protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme." Id. (citations and quotation marks omitted).

A court traditionally weighs four factors in deciding whether to apply the primary jurisdiction doctrine: (1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration. Syntek, 307 F.3d at 781-82. If applicable, the court can either stay proceedings or dismiss the case without prejudice. Id. at 782. In considering these factors, the "primary jurisdiction doctrine is designed to protect agencies possessing quasi-legislative powers' and that are actively involved in the administration of regulatory statutes.'" Clark, 523 F.3d at 1115 (citation omitted). Several courts within this district have applied the primary jurisdiction doctrine "where a determination of a plaintiff's claim would require a court to decide an issue committed to the FDA's expertise without a clear indication of how the FDA would view the issue." Hood v. Wholesoy & Co, Modesto Wholesoy Co. LLC, No. 12-CV-5550-YGR, 2013 WL 3553979, at *5 (N.D. Cal. Jul. 12, 2013); see also Reese v. Odwalla, Inc., No. 13-CV-00947-YGR, 2014 WL 1244940, at *3 (N.D.Cal. Mar. 25, 2014); Astiana v. Hain Celestial, 905 F.Supp.2d 1013, 1016-17 (N.D.Cal. 2012); Gordon v. Church & Dwight Co., No. C 09-5585 PJH, 2010 WL 1341184, at *2 (N.D. Cal. Apr. 2, 2010).

B. Application of the Primary Jurisdiction Doctrine

The Court finds that the Second, Third, and Fourth Syntek primary jurisdiction factors are met here. 307 F.3d at 781-82. Congress vested the FDA with comprehensive regulatory authority to address the issue of proper declaration of food labels. Reese, 2014 WL 1244940, at *4; see generally 21 U.S.C. § 301 et seq. & 21 U.S.C. § 341 et seq.; Swearingen v. Santa Cruz Natural Inc., No. C 13-04291 SI, 2014 WL 1339775, at *2 (N.D. Cal. Apr. 2, 2014) ("Food labeling is within the special competence of the FDA"). The FDCA imposes a comprehensive regulatory framework that requires uniformity in administration. See Astiana, 905 F.Supp.2d at 1015 (noting that "issues of beverage labeling have been entrusted by Congress to the FDA, pursuant to the FDCA (and its related regulations)."); Reese, 2014 WL 1244940, at *4 (citing 21 U.S.C. § 341 et seq. ) ("Congress has vested the FDA with regulatory authority over food labeling, charging the agency with creating a uniform national scheme of regulation to ensure that food is labeled in a manner that does not mislead consumers").

The Court also finds that the First Syntek primary jurisdiction factor is met because the central dispute in this case is whether ECJ is the "common or usual name" of the ingredient used in Defendant's product and whether use of that ingredient name is misleading and prohibited under the FDCA, and in turn, the Sherman Law. Specifically, Plaintiff's claims here depend on FDA regulations that require that manufacturers list ingredients "on the label or labeling of a food... by [their] common or usual name." 21 C.F.R. § 101.4(a)(1); see FAC ¶ 43. The regulations provide that the "common or usual name of a food may be established by common usage or by establishment of a regulation...." 21 C.F.R. § 102.5(d). As noted by other courts in this district, whether ECJ may be properly used on food labeling "fit[s] squarely within Congress' delegation of authority to the FDA." S wearingen, 2014 WL 1339775, at * 2 (citing Clark, 523 F.3d at 1115). Indeed, the FDA has issued previous draft guidance on the proper labeling of ECJ. The parties, however, disagree on whether that previous guidance resolved the issue of whether ECJ is the common or usual name of the ingredient at issue.

Plaintiff contends that Defendant's use of ECJ on food labels violates the FDA's "longstanding and consistently held" position that listing ECJ on food ingredient lists is illegal because it is misleading and violates the "common or usual name" requirement. Supp. Opp'n at 1; see also FAC ¶¶ 38-59, 63, 98-104. Plaintiff further argues that the FDA-issued "Guidance for Industry: Ingredients Declared as Evaporated Cane Juice, Draft Guidance, " ("2009 Draft ECJ Guidance"), issued in October 2009, never implied that the FDA ever had or would permit the use of the term ECJ; rather, it reaffirmed the view that ECJ is not the common or usual name of any type of sweetener, including that derived from dried cane syrup, and that the representation that ECJ is juice is considered by the FDA to be false and misleading under 21 U.S.C. section 343(a)(1) because it fails to reveal the basic nature of the food and its characterizing properties. See Supp. Opp'n at 3; see also 2009 Draft ECJ Guidance, Docket No. 39-1 at 3, Req. for Judicial Notice Ex. A.[1]

Defendant, however, emphasizes that the 2009 Draft ECJ Guidance represented only the FDA's preliminary thinking. For example, the 2009 Draft ECJ Guidance qualifies that this "draft guidance, when finalized, will represent the [FDA]'s current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public." 2009 Draft ECJ Guidance at 1 (emphasis added). The 2009 Draft ECJ Guidance prominently notes that it "contains nonbinding recommendations, " and is a "draft - not for implementation." Id. Far from boilerplate, these words of caution indicate that the FDA, the entity charged with creating and ...

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