In the lawsuit*– filed in California in April - plaintiff Stephen Wilson argued that ‘no added sugar’ claims on Odwalla’s 100% juices are misleading as they imply that 100% juice products typically contain added sugar (they don’t).
According to FDA regulations (click HERE), even if it is technically true that there is no added sugar in your food or beverage, you can only make ‘no added sugar’ claims on your product if “the food that it resembles and for which it substitutes normally contains added sugars.”
As 100% fruit juices do not normally contain added sugars, Odwalla is violating federal law and breaching California’s consumer protection laws (which mirror federal law), claimed Wilson.
Odwalla: We compete in the broader juice drinks category
Odwalla, however, argued that the issue is not black and white, and that its 100% juices should be compared with all “non-carbonated drinks containing any amount of fruit juice," which often contain added sugar.
Judge: Is it clear which category the Odwalla juices are competing in?
In a June 28 memorandum, US district judge Dale S Fischer said: “The disagreement stems from how broadly or narrowly each side defines the category of food that Odwalla’s product ‘resembles and for which it substitutes.’ ”
But ultimately she was not persuaded by Odwalla's arguments: “Even if Wilson’s definition [100% juice] is too narrow, defendants have not convinced the court that their definition [all juice drinks] is correct and mandates dismissal.”
And even if the court did accept Odwalla’s broader category definition (all non carbonated juice drinks), the company has “failed to establish that the relevant category of food normally contains added sugars,” added the judge.
As a result, she said: “The court rejects defendants’ preemption argument at this early stage of the litigation.”
Legal reaction: There are shades of gray here
So what do food law attorneys make of the case? Are there shades of gray here or does the fact that other 100% juices don’t make ‘no added sugar’ claims suggest Odwalla might be vulnerable to a false advertising claim here?
Adam Fox, partner at law firm Squire Patton Boggs, told FoodNavigator-USA that there are likely "shades of gray" in this case.
He added: "Indeed, it would seem to me that the meaning of a 'substitute' beverage that it 'resembles' ought to be something determined by the consuming public, rather than a governmental agency largely focused on safety concerns.
"It should probably be up to the plaintiff to plead facts that plausibly limit the type of beverages for which the defendant’s product substitutes and resembles, and failing such plausible allegations the claim should not stand."
At an evidentiary phase of the case, he added, "survey evidence would likely be instructive."
(The complaint does not specify what the plaintiff was comparing the Odwalla juices to when he purchased them, and just says that, “At the time of purchase, plaintiff thought that some other similar products contain added sugar and some do not, based on what he read on labels….”)
Separately, said Fox, the case is interesting in that it "appears to premise a claim on the interpretation of a regulation, rather than actual confusion... Is the plaintiff really saying that he was aware of the regulation and formed an expectation based on it? If not, it sure seems like he is asserting a private right of action stemming from the regulation itself."
Should this case even have come to court?
Ryan Kaiser, partner at Amin Talati Upadhye, told us that he too had concerns on this front, adding: "This is another example of class action plaintiffs trying to create civil liability for technical regulatory violations (for which there is no private cause of action).
"Unfortunately there's a line of cases (appellate decisions) in the 9th circuit that support this type of argument...at least in so far as these claims making past the motion to dismiss stage."
He added: "We're seeing this in the dietary supplement space as well (ie. the very fact that you're making a particular claim - even if it's 100% true - implies that your product is superior to other products that don't make the claim.).
"It's interesting, in the regulatory compliance practice, we have to tell clients what they can't say or do on labels. All too often, clients will tell us, 'but this company or that company says it on their label...why can't I?' This case is exactly the reason.
"Regulatory compliance is being monitored by the plaintiff's bar these days just as much if not more than by the FDA."
What's the endgame?
That said, the plaintiff is still going to need so show some type of particularized harm should this case go to trial, noted Kaiser, although "trial is rarely the goal" in such cases, he observed.
"Surviving beyond the motion to dismiss means a higher likelihood that the plaintiffs (more importantly, their attorneys) will get a settlement."
Odwalla, which is owned by The Coca-Cola Company, told FoodNavigator-USA that it did not wish to comment at this time.
*The case is Stephen Wilson et al v Odwalla Inc et al 2:17-cv-02763 in the central district of California.