Stayed again, naturally

Ries v. Hornell Brewing Co., 2010 WL 2943860 (N.D. Cal.)

Plaintiffs filed a putative class action under the usual California laws (UCL, FAL, and CLRA) based on defendants’ sale of beverages labeled “All Natural,” “100% Natural,” or “Natural” even though those beverages include high fructose corn syrup (HFCS) and citric acid. “HFCS is obtained by milling corn to produce corn starch and then reacting the corn starch with various enzymes to convert the glucose in the corn starch into fructose. Citric acid is obtained from cultures of Aspergillus niger, a mold which produces the acid if fed a sucrose or glucose-containing medium. The mold is filtered out, and the citric acid is isolated from the growth medium through a reaction with lime and subsequent regeneration by treatment with sulfuric acid.” Plaintiffs argued that, in light of these processes, neither HFCS nor citric acid is a natural ingredient.

Plaintiffs also argued that labels depicting the names and images of fruit, e.g., AriZona Diet Blueberry Green Tea, AriZona No Carb Blueberry Green Tea, and AriZona No Carb White Cranberry Apple Green Tea, were false and misleading because the beverages do not contain a substantial amount of the fruits depicted on the label. Plaintiffs alleged reliance on the labels, causation, and damages in that they wouldn’t have bought the products if they’d known the truth.

The court agreed that the case should be stayed pending FDA action. The primary jurisdiction doctrine applies when there is a need to resolve an issue that’s been placed by Congress within the jurisdiction of an administrative body with regulatory authority, pursuant to a comprehensive statutory scheme, that requires expertise or uniformity in administration. The FDA has relevant and comprehensive authority to regulate food labeling and to define misbranding.

Currently, states can impose their own standards as long as they aren’t nonidentical to FDA rules. The FDA hasn’t yet defined “natural”; state laws defining the term aren’t clearly preempted. The plaintiffs argued that the FDA “consciously decided to defer regulation indefinitely,” making the primary jurisdiction doctrine inapplicable. But, “for at least seventeen years, the FDA has recognized that ‘the use of the term “natural” on the food label is of considerable interest to consumers and industry....’” and solicited comments at that time. Ultimately, it decided not to act because of resource limitations and other agency priorities. But it has issued some regulations referring to “natural” in the context of flavorings, and it has an “informal policy” under which it “has considered ‘natural’ to mean that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be expected to be there. For example, the addition of beet juice to lemonade to make it pink would preclude the product being called ‘natural.’” This is just an advisory opinion, though, and so California can still regulate the term.

The defendants argued that the FDA has recently taken steps towards a formal definition of “natural.” In September 2009, the USDA published an Advance Notice of Proposed Rule Making on the use of “natural” in labeling meat and poultry. The FDA noted that it had an interest in working with USDA to harmonize a definition, and that it is interested in regulating “front of package” claims generally.

The court found that the definition at issue requires expertise and uniformity in administration. Considerable expertise may be necessary to define “natural,” a concept that has proved elusive in the past. Though falsity and deception are within the conventional experience of judges, the FDA does have significantly more experience in this field, and can coordinate with other entities.

Faced with nearly identical claims, a judge in the District of New Jersey granted a 6-month stay (starting June 15, 2010) and referred the question of the proper definition of “natural “ to the FDA. Because of the considerable uncertainty about whether the FDA will choose to act, the court here did the same thing. “Though the Court may extend the stay upon a showing of good cause, the parties should be prepared to proceed with respect to all of Plaintiffs’ claims if the FDA does not indicate clearly its willingness to act in the reasonably foreseeable future.”