What happens when the FDA says it won’t enforce a labeling rule, but the rule itself never changes? In Franco v. Chobani, LLC, 184 F.4th 599 (7th Cir. 2026), the Seventh Circuit answered: the rule still counts, and state-law claims relying on the rule are not preempted.
The FDA had told manufacturers they could leave allulose out of the “Total Sugars” and “Added Sugars” declarations, even though allulose meets the regulatory definition of “sugars.” Chobani did so and labeled its yogurt “sugar free.” The court held that consumers’ state-law deception claims were not preempted because the FDA’s non-binding enforcement discretion did not change what the regulation requires.
The Regulatory Framework
A product may be labeled “sugar free” only if it contains less than 0.5 grams of sugars per serving. FDA regulations define “sugars” as “the sum of all free mono- and disaccharides (such as glucose, fructose, lactose, and sucrose).” 21 C.F.R. § 101.9(c)(6)(ii). In short, chemical structure controls.
Allulose is a monosaccharide, but unlike table sugar, it is low in calories, does not raise blood glucose or insulin levels, and does not promote cavities. When the FDA finalized its Nutrition Facts rule in 2016, it declined to decide whether allulose should be excluded from the Total Sugars and Added Sugars declarations and instead concluded that “[a]llulose, as a monosaccharide, must be included in the declaration[s] . . . pending any future rulemaking that would otherwise exclude this substance[.]” 81 Fed. Reg. 33,742, 33,795–96 (May 27, 2016).
That rulemaking never came. Instead, four years later, the FDA issued guidance (the “Allulose Guidance”) announcing that it would exercise “enforcement discretion” and allow manufacturers to exclude allulose from the Total Sugars and Added Sugars declarations. The agency reasoned that, in light of novel sugars like allulose, it “should consider not only the chemical structure of sugars, but also other evidence,” such as effects on dental caries and metabolism. Franco, 184 F.4th at 604. Critically, however, the FDA never amended the regulation.
That gap matters for preemption. State-law claims that would impose labeling requirements different from federal law are preempted, but claims based on requirements “identical to federal requirements” are not. Id. at 602–03.
The Litigation
Consumers filed a putative class action in the Northern District of Illinois, alleging that Chobani’s “sugar free” Zero Sugar Yogurt, which contains four grams of allulose per serving, was deceptively labeled under state consumer protection laws. Deferring to the Allulose Guidance, the district court held the claims preempted and dismissed the case.
The Seventh Circuit’s Decision
The Seventh Circuit reversed, siding with the FDA itself, which argued as amicus that allulose falls unambiguously within the regulatory definition of sugars. Franco, 184 F.4th at 604.
The court also held that the district court should not have deferred to the Allulose Guidance. The regulation was not ambiguous, and the guidance was not an interpretation of it at all; it was an announcement of enforcement policy. An agency’s decision not to enforce a rule is not the same as rewriting it. And even if the guidance were an interpretation, it would deserve no deference because it conflicted with the FDA’s 2016 position.
Nor did Chobani’s reliance on the guidance, or the marketing permit it obtained from the FDA, save it. Those assurances addressed federal enforcement, not state law. As the court put it, “the fact that one sovereign (the United States) indicated that it would not enforce its labeling requirements with respect to allulose should not have led Chobani to believe that the states would take a similar approach.” Id. at 605–07. In the court’s view, a sophisticated company “should have been aware that the FDA’s decisions about its enforcement priorities would not immunize the company from suits based on state law.” Id.
The Practical Takeaway
FDA enforcement discretion is not a safe harbor. According to the Seventh Circuit, when agency guidance departs from the text of a regulation, the regulation still governs, and state-law claims based on the regulation are not preempted. Manufacturers relying on FDA guidance, especially for ingredients like allulose, should assess their exposure under state consumer protection laws independently.
