On March 31, 2014 Judge Edward J. Davila in the Northern District of California partially dismissed a lawsuit against Whole Foods Market alleging misleading labeling of its in-house “Everyday Value” products. The plaintiff claimed that he was deceived by the terms “evaporated cane juice” (ECJ) and “natural” on product labels. Although Judge Davila found that the plaintiff adequately pled claims involving the word “natural,” he ruled that claims involving the phrase ECJ failed under both the unlawful and fraudulent prongs of California’s Unfair Competition Law (UCL).
Judge Davila’s order included two key holdings for defendants in food misbranding cases involving ECJ claims. First, Judge Davila joined other federal judges in the Northern District in flatly rejecting the “illegal product” theory that has recently gained popularity among plaintiffs’ attorneys. Based on this theory, plaintiff contended that he is exempt from the UCL’s reliance requirement because his claims are based on the illegality of the products themselves, not on an alleged misrepresentation in the product labels. The court did not buy it:
“Plaintiff cannot circumvent the reliance requirement by simply pointing to a regulation or code provision that was violated by the alleged label misrepresentation, summarily claiming that the product is illegal to sell and therefore negating the need to plead reliance.”
Second, Judge Davila held that the phrase ECJ was not likely to deceive reasonable consumers because every label lists “sugar” as an included nutrient “and clearly shows how much sugar is contained in the product.” Citing two other recent cases from the Northern District, the court found that the plaintiff “fails to allege what Plaintiff believed ECJ to be if not sugar and does not explain what a reasonable person would believe ECJ to be.”
In addition to declining to dismiss plaintiff’s “natural” claims, however, Judge Davila rejected Whole Foods’ preemption and primary jurisdiction defenses and granted leave to amend the dismissed claims. The case will therefore march on.