Judge: ‘Cane Juice’ Label May Violate Calif. Law

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A California federal judge found that Trader Joe’s Co. and Wallaby Yogurt Co. may be violating California’s Sherman Law by listing “evaporated cane juice” as an ingredient in some of their products instead of using the term “sugar.”

U.S. District Judge William H. Orrick dismissed fraud allegations in two separate class action lawsuits against the grocery chain and yogurt manufacturer, but will allow claims that their product labeling violates California law.

The class action lawsuit against Trader Joe’s was filed in March. The lead plaintiffs in that action are Amy Gitson, Christine Vodicka and Deborah Ross. The class action lawsuit against Wallaby was filed by Frank Morgan and Janet Hood in January.

In the similar class action lawsuits, classes of plaintiffs argued that the companies tricked them into thinking that the products, which included “evaporated cane juice” as an ingredient, were healthier than products that contained sugar, and were therefore worth a premium. According to the class action lawsuits, California’s Sherman Law incorporates a federal law that requires food products to be labeled with the most common term for an ingredient in order to minimize consumer confusion about a product’s contents. The Class Members argued that evaporated cane juice and sugar are essentially the same ingredient. However, the inclusion of the term “evaporated cane juice” may deceive consumers into believing that the product does not actually contain sugar.

“The plaintiffs have stated plausible allegations that the use of the term ‘evaporated cane juice’ violates the Sherman Law,” Judge Orrick wrote in his decision in the Trader Joe’s action. In this class action lawsuit, the judge divided the claims into two categories. The first involves the Sherman Law violations while the second category involves fraud claims under California’s False Advertising Law and Unfair Competition Law.

Judge Orrick found that the plaintiffs in the Trader Joe’s class action lawsuit failed to adequately argue that the grocery chain’s product labeling was fraudulent. He found that the plaintiffs didn’t sufficiently show how the consumers were deceived by the product labels.

In the Wallaby class action lawsuit, Judge Orrick dismissed five out of the seven claims brought by plaintiffs Frank Morgan and Janet Hood, finding that they did not provide specific enough information about how they were tricked by the product labels. He also rejected their claims that the yogurt labeling violated U.S. Food & Drug Administration (FDA) standards for yogurt.

“Contrary to the plaintiffs’ assertion, the mere fact that (Wallaby is) calling sugar ‘evaporated cane juice’ and placing it in yogurt does not violate the (FDA’s) standard of identity,” Judge Orrick wrote.

Judge Orrick rejected the arguments from the plaintiffs in both class action lawsuits that a reasonable consumer would be tricked into thinking that the products contained no sugar, finding that the sugar content was disclosed on the label.

The plaintiffs in the class action lawsuits are represented by Ben F. Pierce Gore of Pratt & Associates, Colin Harvey Dunn of Clifford Law Offices PC and Darren Lee Brown.

The “Evaporated Cane Juice” Deceptive Labeling Class Action Lawsuits are Amy Gitson et al. v. Trader Joe’s Co., Case No. 3:13-cv-01333, and Frank Morgan et al. v. Wallaby Yogurt Co., Case No. 3:13-cv-00296, in the U.S. District Court for the Northern District of California.