FDA Enforcement Discretion Won’t Save You From Labeling Litigation

July 28, 2026
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The Seventh Circuit’s July 27, 2026 decision in Franco v. Chobani, LLC is a cautionary tale for any food company that has leaned on FDA enforcement discretion as a labeling compliance strategy. The court held that FDA’s decision not to enforce a labeling regulation does not stop consumers from suing under state law when violation of the regulation as written may be deceptive. For food and beverage businesses, the lesson goes well beyond the specific ingredient at issue in the case.

Background

Chobani marketed its “Chobani Zero Sugar Yogurt” as sugar free, even though each serving contained four grams of allulose, a low-calorie sweetener. Consumers sued under various state consumer protection laws, alleging that the sugar-free claim was deceptive.

Under FDA’s labeling regulations, a product can only be labeled “sugar free” (or similar terms like “zero sugar”) if it contains less than 0.5 grams of “sugars” per serving, as sugars are defined in 21 C.F.R. § 101.9(c)(6)(ii). That regulation defines “Total Sugars” as “the sum of all free mono- and disaccharides, (such as glucose, fructose, lactose, and sucrose).” Allulose is a monosaccharide — but it doesn’t carry the same metabolic or dental-health concerns as conventional sugars. For that reason, FDA issued guidance in 2020 announcing that it would exercise enforcement discretion and not pursue labeling violations against manufacturers who excluded allulose from their Total Sugars and Added Sugars declarations, pending a future rulemaking that (so far) has not begun.

Chobani relied on that guidance. The district court did too, deferring to FDA’s Allulose Guidance and dismissing the case as expressly preempted by the Federal Food, Drug, and Cosmetic Act (FDCA).

The Seventh Circuit’s Analysis

The Seventh Circuit reversed on two independent grounds.

First, the underlying regulation is unambiguous. The court — with input from FDA itself, which filed an amicus brief at the panel’s invitation — concluded that the “such as” language in § 101.9(c)(6)(ii) is illustrative, not limiting. Total Sugars means all free mono- and disaccharides, full stop; the listed examples don’t narrow that definition to substances with the same physiological effects as glucose, fructose, lactose, and sucrose. Allulose is a monosaccharide, so it counts as a sugar under the regulation. Because the text is clear, there was no ambiguity to defer to FDA about in the first place.

Second, and more important, the Allulose Guidance was never entitled to deference. The court agreed with FDA’s own characterization of its guidance: it was not an interpretation of what “sugars” means under § 101.9(c)(6)(ii). It was an announcement of an enforcement priority — a statement that FDA did not intend to pursue violations, not a statement that no violation existed.

Because Chobani’s sugar-free claim violated a specific FDA labeling requirement, the state-law claims seeking to enforce that same standard were not preempted by the FDCA. The court also rejected Chobani’s argument that the claims should be dismissed for failure to plausibly allege consumer deception, holding that whether reasonable consumers were misled by an unqualified “sugar free” claim is a factual question for discovery, not something a court can resolve on the pleadings.

Why This Matters Beyond Allulose

The specific holding affects any product labeled “sugar free,” “zero sugar,” “no sugar added,” or similar, that contains allulose. Those labels are now vulnerable to class action claims, regardless of FDA’s enforcement posture.

But the broader takeaway is more important: FDA enforcement discretion is not a safe harbor. An FDA guidance document saying the agency won’t enforce a rule doesn’t change what the rule says — it just means FDA, as one enforcer among many, has chosen to look the other way for now. It does nothing to bind:

  • State agencies and attorneys general enforcing parallel state food labeling regulations and consumer protection statutes;
  • Private plaintiffs and the class action bar, who have every incentive to enforce labeling rules that FDA won’t; or
  • Courts, which — as this decision confirms — will look to the text of the underlying regulation rather than an agency’s enforcement priorities when deciding whether a label complies with federal law.

That risk is not limited to allulose. FDA has announced that it will exercise enforcement discretion in a number of other labeling contexts, including its recent statement that it will not object to “no artificial colors” claims on products colored solely with naturally derived color additives, even though FDA’s regulatory definition of “artificial color” does not distinguish between colors derived from natural and synthetic sources. Following Franco, class action plaintiffs’ lawyers are likely to look for other examples of arguably deceptive food labeling claims resting on FDA enforcement discretion.

Key Takeaways for Food and Beverage Companies

  • Don’t confuse “FDA won’t enforce this” with “this is legally compliant.” They are not the same thing, and only the latter protects you from private litigation.
  • Review any labeling or marketing claim that depends on FDA enforcement discretion rather than a clear regulatory basis.
  • Expect increased plaintiff interest in labeling claims resting on enforcement discretion.

Now is a good time to take a fresh look at labeling compliance. Contact us for a consultation.

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