While a federal court in California has dismissed a request for injunctive relief
in a consumer fraud action against Wallaby Yogurt Co. for lack of standing, it
will allow the first amended complaint’s remaining claims to proceed. Morgan
v. Wallaby Yogurt Co., Inc., No. 13-0296 (N.D. Cal., order entered
March 13, 2014). Additional details about the court’s ruling on the plaintiff’s
original complaint appear in Issue 500 of this Update.

As to the request for prospective injunctive relief, the court agreed with
the defendant that the plaintiffs will not be deceived as to future product
purchases because they now know that “evaporated cane juice” is added
sugar. So ruling, the court acknowledged a split among the district courts
in the circuit on this issue. The court also expressly disagreed with Kane v.
Chobani, Inc., No. 12-2425 (N.D. Cal. Sept. 19, 2013), to the extent that the
court (i) found that the plaintiffs lacked standing because they could not
plausibly allege that they relied on the term “evaporated cane juice” due to
their failure to allege what they believed the substance to be “if not a form of
sugar”; and (ii) determined that consumers are not likely to be deceived into
consuming unwanted sugar when the name of an ingredient “discloses that it
is derived from cane.”

The court here found that (i) the plaintiffs have standing because it is
plausible that a reasonable consumer, concerned about consuming added
sugar, does not realize that “evaporated cane juice” is added sugar; and (ii)
the plaintiffs had sufficiently pleaded a violation of the “fraudulent” prong of
the Unfair Competition Law because they “do not need to identify what they
believed evaporated cane juice to be if not sugar, or what other forms of cane
there are besides sugar cane. There is no need for the plaintiffs to have any
understanding of ‘evaporated cane juice’ at all—it is sufficient to plead that
they did not think, and a reasonable consumer would not know, that it was really just added sugar.”


Issue 518

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.