Zero-sugar yogurt? Chobani consumers say they aren’t buying it

CHICAGO (CN) — Consumers tried to convice a Seventh Circuit panel on Friday morning that a lower court had erred when it dismissed a class action against Chobani for labeling some of its yogurts as zero sugar.

An Illinois couple filed a class action against Chobani in 2023 after they realized the yogurt they ate — prominently advertised as zero sugar — actually contained allulose, a type of natural sugar.

"In layman’s terms, allulose is a naturally occurring sugar that sweetens things like raisins and maple syrup," appellants wrote in their brief. "And every serving of Chobani Zero Sugar contains four grams of it."

The Food and Drug Administration regulates nutrition labels. It requires foods to meet certain criteria to use the term "zero sugar."

The first criterion is that the food contains less than 0.5 grams of sugar. The second is that the packaging must contain an asterisked disclaimer on the ingredient list stating that an ingredient "adds a trivial amount of sugar," "adds a negligible amount of sugar" or "adds a dietarily insignificant amount of sugar."

A lower court ultimately dismissed the class action, finding that FDA regulations preempted Illinois consumer fraud claims brought by the plaintiffs.

The FDA issued further guidance on allulose in 2020. The agency determined that although it's metabolized differently than traditional sugars, allulose still should be considered a sugar because it is a monosaccharide. Even so, the FDA noted in its guidance that it intended to exercise enforcement discretion.

"When FDA determines that allulose should be excluded from total sugars declaration because it does not metabolize like traditional sugars, that is an exercise in delegated expertise," Chobani attorney Andrew Tulumello said.

Tulumello referenced Skidmore deference — a principle born out of the 1944 Supreme Court case Skidmore v. Swift & Co., in which the high court determined that federal courts should go in line with an agency's interpretation of a statute.

Pushing back on these arguments, plaintiff attorney Yates French of the Illinois firm Rathje Woodward told the three-judge panel that the FDA's regulations don't hold any weight because they are enforced on a case-by-case basis.

"The question is thus: Which agency actions amount to a 'requirement' sufficient to preempt state law?" French wrote in the appellants' brief. Citing Bates v. Dow Agrosciences from 2005, he argued that "controlling Supreme Court authority provides the answer: For purposes of preempting state law, 'a requirement is a rule of law that must be obeyed.'"

Several other appellate courts, French noted, had reached the same conclusion, including the Eleventh and Ninth circuits.

And yet the lower court judge — U.S. District Judge John Tharp, a Barack Obama appointee — "said that it is hard to imagine that the FDA simultaneously intended to allow, number one, the manufacturers to omit allulose from the total sugars declaration, and two, consumers to sue under state law based on that omission," noted U.S. Circuit Judge Ilana Rovner, who appeared remotely Friday. "I'm wondering if you would tell us why he was wrong in that respect?"

"This is such a great question, and I'm glad you're asking that," French told the George H.W. Bush appointee. "I think you're specifically referring to footnote 38 of Judge Tharp's opinion, and he's asking a very commonsense question."

"Wouldn't it be silly for the FDA to say, you can do this and still allow consumers to sue for that exact claim?" French continued, paraphrasing. "I agree with it. I don't necessarily think he got it wrong."

But, "I think what he did was he misconstrued our claim," French concluded. He argued there was a distinction between nutrition claims on the front of food packaging and uniform nutrition facts on the back.

French argued that in order to survive a preemption challenge, they'd have to look at whether the FDA would allow a front label to claim zero sugar if it contained allulose.

"Should we ask them?" U.S. Circuit Judge Thomas Kirsch, a President Trump appointee, said. "Should we ask the FDA to file an amicus brief?"

"I think the answer to that is it's unnecessary," French responded. "And let me tell you why: in other contemporaneous briefings filed after the issuance of the allulose guidance, the FDA has clearly said that ... for purposes of the definition of total sugars, it still considers allulose to be a sugar. It's said that in briefing, filed before a different federal district court."

Tulumello, with the Washington, D.C.-based firm Weil Gotshal & Manges, argued that the FDA determining allulose is a sugar is a non sequitur.

"The plaintiffs here allege that consumers care about sugar, because they care about calories and blood sugar," Tulumello said. "And so if that is what is pleaded is and what consumers care about, their zero sugar claim here cannot be deceptive, because there is no impact on calories or blood sugar."

Joining Judges Kirsch and Rovner on Friday's panel was U.S. Circuit Judge Nancy Maldonado, a Joe Biden appointee. The panel did not indicate when it might rule on the matter.

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