In a decision that will impact numerous lawsuits in the lower courts, in Kane v. Chobani (No. 14-15670 (9th Cir. Mar. 24, 2016)) the US Court of Appeals for the Ninth Circuit stayed proceedings in a class action regarding the alleged misuse of the term “natural” on food labels until the US Food and Drug Administration (FDA) has completed its review of the term.
Background
The case arises from Chobani’s use of the terms “only natural ingredients” and “all natural” on the labels of its yogurt products. Plaintiffs originally brought suit in the Northern District of California (see Kane, et al v. Chobani, LLC, No. 5:12-cv-02425-LHK (N.D. Cal.)) claiming, among other things, that characterizing the yogurt as “natural” was misleading because the product included color additives that were not natural, and the fruit and vegetable juices in the product “were highly processed unnatural substances.” To establish standing, a plaintiff must prove actual reliance on the defendant’s misrepresentations—here, that the plaintiff purchased the Chobani yogurt that he or she otherwise would not have purchased (or would not have spent as much money on) in reliance on the fact that the yogurt was “natural.” The lower court dismissed the case on the ground that plaintiffs failed to plead sufficient reliance on the term.
On appeal, the Ninth Circuit vacated the lower court’s ruling granting Chobani’s motion to dismiss and, pursuant to the primary jurisdiction doctrine, the court stayed further proceedings regarding use of the term “natural” until FDA has reviewed the term. Under the doctrine of primary jurisdiction, a court may stay a case and refer it to an agency that has special competence over the issues involved. The Ninth Circuit stated that “[t]he delineation of the scope and permissible usage of the term[] ‘natural’ . . . 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.’” The court further noted that FDA is currently reviewing the term “natural” for food product labeling, and it was therefore appropriate to stay the cases pending the outcome of that review.
FDA’s Guidance on the Term “Natural”
As we have discussed in prior posts, FDA currently has no official definition of the term “natural,” although the agency has made various statements about definitions it would accept. Given widespread litigation over the term and requests from manufacturers for more guidance, in November 2015 FDA established a docket (Docket No. FDA–2014–N–1207) to receive information and comments on the use of the term “natural.” Early this year, FDA extended the closing date for the comment period from February 10, 2016 to May 10, 2016.