Yogurt company Chobani sold a product it labeled as “sugar free,” even though the yogurt includes four grams per serving of allulose– a naturally occurring sweetener. Consumers sued Chobani for doing so under state consumer protection laws, but an Illinois district court held those claims were preempted by the Federal Food, Drug, and Cosmetic Act–relying on FDA enforcement guidance relating to FDA regulations regarding sugar-free labeling.
Yesterday, the Seventh Circuit reversed. The court explained that the key question was whether allulose is considered a “sugar.” While 2020 FDA enforcement guidance had explained the agency “would exercise enforcement discretion for the exclusion of allulose” in determining whether a product was indeed sugar-free, on appeal, the agency filed an amicus brief expressing its view that allulose was indeed a “sugar” under its regulations–thus suggesting that it agreed that Chobani’s treatment of the allulose-containing product as sugar-free ran afoul of those regulations. The agency further explained that its exercise of enforcement discretion was not actually an interpretation of its regulations. The Seventh Circuit found that the FDA’s reading of its regulations was entitled to Skidmore deference, while also explaining why it was correct as a matter of textual interpretation. The court also rejected Chobani’s alternate arguments about consumer deception, finding that, at the Rule 12(b)(6) stage, the plaintiffs had adequately met their burden.
