As our readers are well aware, in the past decade, food and beverage manufacturers have faced an unrelenting onslaught of putative class actions challenging allegedly false or misleading labels. In the January 2016 issue, we wrote about a particular defense to these lawsuits: the “primary jurisdiction doctrine.” This doctrine is a prudential doctrine that enables courts to stay litigation if it determines that the case involves technical or policy questions that an administrative agency like the U.S. Food and Drug Administration (“FDA”) should resolve. We explored how the doctrine could be utilized in cases challenging the term “natural” in food and beverage marketing and labeling.¹ As we explained, in November 2015, FDA called for public comment from the food and beverage industry, citizens, and other stakeholders on the use of the term “natural” on food labeling.² We hailed this as a significant opportunity to roll back the tide of suits challenging “natural” labels. In particular, we noted that FDA’s request was essentially an invitation for any company facing this type of challenge to its labeling to request that a court apply the doctrine of “primary jurisdiction” to stay the lawsuit in light of the possibility that FDA may provide additional guidance regarding the use of the term “natural.” As we predicted, in the past year, courts have been very receptive to this type of argument—particularly, in “natural” cases.

This article details how the primary jurisdiction defense has fared in “natural” cases since FDA called for comments. It also discusses other cases involving challenged labels in which the defense might be successful. Finally, it lays out a litigation strategy for companies to consider based on the primary jurisdiction doctrine defense and/or FDA’s call for comments.

One of the most notable cases to apply the primary jurisdiction doctrine in a “natural” case is the Ninth Circuit’s Kane v. Chobani.³ The Ninth Circuit—albeit in an unpublished, and therefore non-precedential opinion—sua sponte remanded a case involving a “natural” challenge back to the district court, ordering it to stay the case in light of FDA’s request for comments.⁴ In that case, the plaintiffs asserted that Chobani deceptively and unlawfully labeled its yogurt as “natural” in violation of FDA regulations, and that Chobani deceptively and unlawfully uses the term “evaporated cane juice” to describe sugar in the product.⁵ The Ninth Circuit determined that the case should be stayed under the primary jurisdiction doctrine.⁶ In the Ninth Circuit’s view, “[t]he delineation of the scope and permissible usage of the terms ‘natural’ and ‘evaporated cane juice’ in connection with food products 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.”⁷ Although the Ninth Circuit acknowledged that courts “should not invoke primary jurisdiction when the agency is aware of but has expressed no interest in the subject matter of the litigation,” it pointed out FDA’s recent request for comments regarding the use of the term “natural” in connection with food product labeling, and the fact that FDA had represented in a letter to a judge in one of the food cases that it expected to issue final guidance on the term “evaporated cane juice” by the end of 2016.⁸ “Given the ongoing FDA proceedings regarding the terms ‘natural’ and ‘evaporated cane juice,’” the Ninth Circuit concluded that a stay could conserve judicial resources.⁹

Unsurprisingly, a number of district courts have followed suit, issuing stays—of limited durations—in similar cases. These include at least eight cases concerning a “natural” label: Viggiano v. Johnson¹⁰; George v. Blue Diamond Growers¹¹; In re Hain Celestial Seasonings Prod. Consumer Litig.¹²; Mains v. Whole Foods Mkt., Inc.¹³; In re King LLC “Healthy and All Natural” Litig.¹⁴; Forsher v. J.M. Smucker Co.¹⁵; and In re Gen. Mills, Inc. Kix Cereal Litig.¹⁶ They also include at least one case—Thornton v. Pinnacle Foods Grp., LLC¹⁷—which concerns a similar label—“nothing artificial.” At least one court has issued an order to show cause as to why a case should not be stayed under the doctrine.¹⁸ Although at least one court issued a stay in a case involving an “evaporated cane juice” labeling challenge (George v. Blue Diamond Growers¹⁹), FDA has since issued its final guidance on the issue,²⁰ which makes the defense much less viable.

Nonetheless, not all courts have applied the primary jurisdiction doctrine to stay cases involving “natural” labels—even since FDA called for comments. Judge Kronstadt’s refusal to issue a stay in Morales v. Kraft Foods Group, Inc.,²¹ is particularly instructive. In that case, plaintiffs brought an action against Kraft Foods Groups, Inc., alleging that they were misled by the use of the term “natural cheese” on one of Kraft’s cheese products. The plaintiffs brought their claims under three California unfair competition statutes; Judge Kronstadt determined that the question presented was “different than the one at issue in Kane.”²² The question in Kane was whether Chobani violated FDA regulations, the judge explained, whereas the question presented in Kraft was whether “natural cheese” is “deceptive to the reasonable consumer.”²³

Judge Kronstadt acknowledged that some courts concerning claims under the California unfair competition statutes had given some weight to defendants’ compliance with FDA rules, but, in his view, compliance with FDA regulations did not “automatically shield Kraft from a claim under the relevant statutes.” ²⁴ The judge found it particularly relevant that the plaintiffs had presented evidence to support their claim that the reasonable consumer is likely to be misled by the use of the term “natural cheese” on their label, including their own testimony and internal Kraft reports.²⁵ Finally, Judge Kronstadt noted that “any determination the FDA may make on this issue is unknown at this time,” and there were several issues such as a motion to decertify the class and expert discovery that did not depend on “what action, if any, is taken by the FDA.”²⁶

Notably, not only does Morales appear to be an outlier, but it also appears to be at odds with Kane. Although Judge Kronstadt stated that the questions in the two cases were different, that does not appear to be the case. Like the Morales plaintiff, the Kane plaintiff also brought her claims under California consumer protection statutes and contended that the “natural” claims were misleading to a reasonable consumer.²⁷ And like the Kane plaintiff, the Morales plaintiff relied on FDA’s informal natural guidance in her complaint to shore up her claims.²⁸

Notwithstanding Morales, companies should consider making a primary jurisdiction defense in cases challenging their “natural” labels and in other cases that implicate labels that FDA has expressed an interest in regulating. One such example is a case involving a “healthy” label. FDA has recently requested comments on the use of the term “healthy” in the labeling of human food products.²⁹ Like the “natural” cases, “healthy” cases are ripe candidates for making the primary jurisdiction defense.

Despite the fact that the primary jurisdiction defense often results in a stay rather than an outright dismissal, there are many reasons for a company to make the defense. First, the primary jurisdiction defense is a strong defense to stop litigation in its tracks. Although judges often hesitate to dismiss these food labeling cases on preemption grounds, they appear to be much more comfortable utilizing the primary jurisdiction doctrine.³⁰ Judges who utilize the doctrine often stay the entire case, which includes stopping all protracted and expensive discovery.³¹

Moving to stay the case on primary jurisdiction grounds may also strengthen certain defenses—like a preemption or fair notice defense—when the stay is lifted. Consider a “natural” case that challenges the presence of citric acid in food. It is unclear whether FDA considers citric acid unnatural given that its stance as to what constitutes an unnatural ingredient is ambiguous.³² FDA may conclude that an ingredient like citric acid is natural. If so, companies would have a strong preemption argument, because state consumer protection laws are preempted if they seek to impose requirements that contravene the requirements set forth by federal law.³³ If FDA concludes that an ingredient like citric acid is unnatural, however, companies have a strong fair-notice/due-process-type defense. Companies could (and should) argue that FDA’s new rule clarified an ambiguous policy, and the retroactive application of such a regulatory clarification contravenes due process. Notably, this type of fair-notice defense has prevailed in at least a few food and beverage cases.³⁴

Finally, beyond making a primary jurisdiction defense, companies can use FDA’s various calls for comments to buttress motion-to-dismiss-type arguments. Many of the labeling cases require a plaintiff to plead that a labeling statement misled a reasonable consumer.³⁵ Thus, in a “natural” case, to survive a motion to dismiss, a plaintiff must plead a plausible definition of the term “natural,” and one that is shared by the reasonable consumer.³⁶ FDA’s call for comments with respect to “natural” in particular suggests that the plaintiff’s burden is a heavy one. After all, the agency admits that “the term ‘natural’ is used on a variety of products to mean a variety of things.”³⁷ Thus, defendants should consider pointing to FDA’s own words to argue that a plaintiff has not (or even cannot) plead facts showing how a reasonable consumer could be misled by a natural label that means many different things to many different people.

In short, the defense bar should consider how FDA’s various calls for comments can work for them to quickly and efficiently dispose of meddlesome challenges to food and beverage labels.

If your company is involved in litigation involving “natural,” “healthy” or other labeling claims, and would like to explore the possibility of invoking FDA’s “primary jurisdiction” as a defense, please contact King & Spalding FDA partner Smitha G. Stansbury, King & Spalding litigation partner Ethan Davis, or litigation associate Marisa C. Maleck.

* Asterisks indicate cases that Marisa Maleck litigated when she was previously associated with another firm.

¹ These lawsuits often allege that the term “natural” is false and misleading because many products contain allegedly artificial or synthetic ingredients, or are produced using methods that consumers may not consider “natural.”

² See A Sea Change on the Horizon for California’s Food Court? FDA Calls for Comment on Use of the Term “Natural” for Food Products, available at https://kslawemail.com/41/595/pages/article6.asp; see also Use of the Term “Natural” in the Labeling of Human Food Products; Request for Information and Comments, 80 Fed.Reg. 69,905 (Nov. 12, 2015).

³ See 645 Fed. Appx. 593 (2016).

⁴ Id., at 594–95.

⁵ Id., at 594.

⁶ Id.

⁷ Id.

⁸ Id.

⁹ Id.

¹⁰ See 2016 WL 5110500, at *3 (C.D. Cal. June 21, 2016).

¹¹ See 2016 WL 1464644, at *3 (E.D. Mo. Apr. 14, 2016).

¹² See 2016 WL 6302515, at *1 (C.D. Cal. Aug. 8, 2016) (extended stay); see also id., 2016 WL 6302513, at *1 (C.D. Cal. May 10, 2016) (original stay).

¹³ See 2016 WL 5791414, at *2 (N.D. Cal. Apr. 18, 2016).

¹⁴ See ___ F. Supp. 3d ____, 2016 WL 4991471, at *6 (S.D.N.Y. Sept. 15, 2016).

¹⁵ 2016 WL 5678567, at *3 (E.D.N.Y. Sept. 30, 2016).

¹⁶ 2016 WL 5110499, at *1 (D.N.J. June 13, 2016).

¹⁷ See 2016 WL 5793193, at *2 (E.D. Mo. Sept. 30, 2016).

¹⁸ Maxwell v. Unilver, 12- 01736*.

¹⁹ See 2016 WL 1464644, at *3 (E.D. Mo. Apr. 14, 2016).

²⁰ U.S. Food & Drug Ass’n, Guidance for Industry: Ingredients Declared as Evaporated Cane Juice (May 2016), available at http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/LabelingNutrition/ucm181491.htm.

²¹ No. 14-04387, D.E. 273 (C.D. Cal. Dec. 6, 2016).

²² Id., at 6.

²³ Id.

²⁴ Id.

²⁵ Id.

²⁶ Id., at 6–7.

²⁷ See, generally, Kane v. Chobani, Inc., 973 F. Supp. 2d 1120 (N.D. Cal. 2014), vacated sub nom. Kane v. Chobani, LLC, 645 F. App’x 593 (9th Cir. 2016).

²⁸ No. 14-04387, D.E. 40, pp. 11–13.

²⁹ Use of the Term ‘‘Healthy’’ in the Labeling of Human Food Products; Request for Information and Comments, 81 Fed.Reg. 66562 (Sept. 28, 2016).

³⁰ See, generally, Adding Primary Jurisdiction To The Defense Lawyer’s Toolbox, available at http://www.ettdefenseinsight.com/2013/08/adding-primary-jurisdiction-to-the-defense-lawyers-toolbox/.

³¹ See, e.g., Viggiano, 2016 WL 5110500, at *3.

³² FDA considers the term “natural” to mean that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.” See “Natural” on Food Labeling, available at http://www.fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatoryInformation/LabelingNutrition/ucm456090.htm.

³³ See Wyeth v. Levine, 555 U.S. 555 (2009); see also 21 U.S.C. § 343–1(a)(3).

³⁴ Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1147 (N.D. Cal. 2013) (dismissing claims based on MSG labels on the grounds that the company could not be held liable under a theory that FDA announced after it made many of its labeling statements)*; Peterson v. ConAgra Foods, Inc., 2014 WL 3741853, at *1 (S.D. Cal. July 29, 2014) (same).

³⁵ See, e.g., Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008).

³⁶ See, e.g., Figy v. Frito-Lay N. Am., Inc., 67 F. Supp. 3d 1075, 1089 (N.D. Cal. 2014)*.

³⁷ 80 Fed.Reg, at 69906.