Reese v. Odwalla, Inc.

30 F. Supp. 3d 935, 2014 WL 1244940
CourtDistrict Court, N.D. California
DecidedMarch 25, 2014
DocketCase No.: 13-CV-947 YGR
StatusPublished
Cited by4 cases

This text of 30 F. Supp. 3d 935 (Reese v. Odwalla, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reese v. Odwalla, Inc., 30 F. Supp. 3d 935, 2014 WL 1244940 (N.D. Cal. 2014).

Opinion

Order Granting Motion To Dismiss In Part And Staying Case

YVONNE GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE

Plaintiff Robin Reese (“Plaintiff’) brings this putative class action against Defendants Odwalla, Inc. and The Coca-Cola Company (“Defendants”) alleging that certain of Defendants’ products have labels that do not comply with the requirements of the federal Food, Drug, and Cosmetics Act (“FDCA”), as adopted by the California Sherman Law, Cal. Health & Safety Code section 109875, et seq. (“Sherman Law”). Plaintiff alleges seven claims under California law: (1) violation of the California Unfair Competition Law (“UCL”); (2) violation of Cal. Business and Professions Code section 17200, based on unfair, unlawful and fraudulent conduct; (3) violation of the California False Advertising Law (“FAL”); (4) violation of California Business and Professions- Code section 17500, for misleading and untrue advertising; (5) violation of the California Consumer Legal Remedies Act, Cal. Civil Code section 1750, et seq.; (6) misrepresentation of goods to consumers; and (7) quasi-contract relief based upon an unjust enrichment theory.

Defendants have filed a Motion to Dismiss or, in the Alternative, to Strike Portions of Plaintiffs Complaint on the grounds that Plaintiffs complaint does not state a predicate claim for violation of the [938]*938California Sherman Law; her claims are preempted by federal law; at a minimum, the Court should defer under the primary jurisdiction doctrine; and the claims for nationwide class relief and the claims against the Fanta Zero Orange product should be stricken. (Dkt. No. 28.)

Having carefully considered the papers submitted and the pleadings in this action, and for the reasons set forth below, the Court hereby Grants the Motion to Dismiss In Part and Stays the instant action.1

I. Summary Op Allegations

Plaintiff alleges that Defendants currently make and market a number of beverages and energy bars which list “Evaporated Cane Juice” or “Organic Evaporated Cane Juice” as an ingredient. Plaintiffs allege that all such products are misbrand-ed because the use of the term “Evaporated Cane Juice” (hereinafter, sometimes, “ECJ”) is a violation of federal and California law governing food labeling. Specifically, Plaintiff alleges that the FDA has stated:

• the term ‘evaporated cane juice’ is not the common or usual name of any type of sweetener, including dried cane syrup.
• ECJ is required to be identified either as “sugar” or “cane syrup,” both of which have standards of identity set forth in federal regulations (21 C.F.R. § 168.130, 21 C.F.R. § 101.4(b)(20) and § 184.1854) sweeteners derived from sugar cane syrup should not be listed in the ingredient declaration by names which suggest that the ingredients are juice, such as ‘evaporated cane juice.’
• The term ECJ is “false and misleading” under section 403(a)(1) of the FDCA (21 U.S.C. § 343(a)(1)) because it fails reveal the basic nature of the food and its characterizing properties (i.e., that the ingredients are sugars or syrups) as required by 21 C.F.R. §§ 101.3 and 102.5.

(Complaint ¶ 14.) Pursuant to the Sherman Law, California has adopted these federal labeling requirements as state law. California Health & Safety Code section 110100.

Plaintiff alleges that the term ECJ misleads consumers into paying a premium price for inferior or undesirable ingredients or for products that contain ingredients not listed on the label and that she would not have purchased these products had she known that they contained “sugar masquerading as evaporated cane juice.” (Id. at ¶ 76.) Had Plaintiff known that the term ECJ was unlawful, and the products were misbranded, she would not have bought them. (Id. at ¶¶ 78, 79.)

In her UCL claims, Plaintiff alleges that: “Defendants sold Plaintiff and the Class Misbranded Food Products that were not capable of being sold or held legally and which had no economic value and were legally worthless.” (Complaint ¶ 101.) Plaintiff alleges that she and others in the putative class “suffered a substantial injury by virtue of buying Defendants’ Misbranded Food Products that they would not have purchased absent Defendants’ illegal conduct.” (Id. ¶ 108.) [939]*939She further alleges that Defendants sold “unsalable misbranded products that were illegal to possess” (id. ¶ 109), and that “Defendants’ fraud and deception caused Plaintiff and the Class to purchase Defendants’ Misbranded Food Products that they would otherwise not have purchased had they known the true nature of those products” (id. ¶ 118). Her allegations in support of her FAL, CLRA, and unjust enrichment claims are much the same. (See Complaint ¶¶ 124, 125, 132, 141, 151.)

II. Discussion

The viability of Plaintiffs claims turns on the question of whether the FDA has determined, as Plaintiff alleges, that the use of the term ECJ is “unlawful,” and that this ingredient must be named “sugar” or “cane syrup” on the label in order to comply with federal, and therefore state, law.

A. This Court’s Prior Decision in Hood v. Wholesoy

Examining the identical question in a prior decision, this Court previously found that the FDA’s position on ECJ was “unsettled” and no uniform enforcement standard had yet been determined. See Hood v. Wholesoy, 12-cv-5550 YGR, 2013 WL 3553979 (N.D.Cal. July 12, 2013) Order Granting Motion to Dismiss, Dkt. No. 31. The Court so found in the context of Congress’ grant of authority to the FDA to “establish a uniform federal scheme of food regulation to ensure that food is labeled in a manner that does not mislead consumers” See 21 U.S.C. § 341 et seq. The FDA had issued guidance in October 2009 advising that the term ECJ was not a “common or usual name for any type of sweetener” and therefore should not be used. (Defendants’ Request for Judicial Notice, Dkt. No. 29, Exh. A, Guidance For Industry: Ingredients Declared as Evaporated Cane Juice [2009 Draft Guidance”].) That same document stated that the FDA’s Guidance “should only be viewed as recommendations,” was non-binding, and not legally enforceable. The FDA solicited comments on the tentative view expressed therein. Consequently, in the Hood case, this Court found, under the circumstances and arguments raised there, it was appropriate to defer to the FDA to say what the proper rules should be with respect to ECJ, rather than render a decision that would “usurp the FDA’s interpretive authority” to establish a rule in the first instance. Hood, supra, at 11, citing Pom Wonderful, LLC v. Coca-Cola Co., 679 F.3d 1170, 1176 (9th Cir.2012) cert.

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30 F. Supp. 3d 935, 2014 WL 1244940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reese-v-odwalla-inc-cand-2014.