ECJ Misrepresentation Claims Dismissed Without Prejudice
A federal court in California has dismissed for lack of standing a putative class action alleging that Pacific Foods of Oregon, Inc. misleads consumers by using the term “evaporated cane juice” (ECJ) on its food labels instead of sugar. Swearingen v. Pac. Foods of Ore., Inc., No. 13-4157 (N.D. Cal., order entered July 30, 2014). Plaintiffs Mary Swearingen and Robert Figy are named plaintiffs in a number of ECJ-related cases that have recently been stayed under the primary jurisdiction doctrine as the U.S. Food and Drug Administration considers its position on use of the term by food makers. Two such cases are summarized in Issue 529 of this Update. The court did not address this issue here, because it dismissed the case on pleading grounds.
According to the court, the plaintiffs did not allege that they purchased the company’s products “in reliance on any alleged misrepresentations that evaporated cane juice is not sugar, or that they would not have purchased those products if they knew that they contained sugar. Instead, Plaintiffs claim that they ‘would not have purchased these products had they known the products were illegal to sell and possess nor would they have expended the purchase price for products that were worthless due to their illegality.” Because actual reliance is required under California’s Unfair Competition Law and the plaintiffs did not plead reliance, the court ruled that the complaint failed as a matter of law. So ruling, the court rejected the plaintiffs’ attempt to sidestep the pleading requirement by characterizing their claims as “strict liability labeling violations.” The court gave the plaintiffs 14 days to file an amended complaint.
Issue 532
