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 (U.S. Dist. Ct., 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.”