Chobani is again facing a proposed class-action lawsuit over the “Zero Sugar” claim used on some of its yogurt products. The dispute concerns whether yogurt containing allulose can legally and fairly be marketed as having no sugar. On July 27, 2026, the US Court of Appeals for the Seventh Circuit reversed an earlier dismissal and returned the case to a federal court in Chicago.
How the Chobani Lawsuit Began
The case was filed in May 2023 by consumers who said they purchased Chobani Zero Sugar yogurt after relying on the wording displayed prominently on its packaging. Jason and Abigail Franco said they bought the product from a Costco store in Oak Brook, Illinois.
The original case also included consumers from Arizona and Kansas. The complaint sought to bring claims under consumer-protection laws covering numerous states.
The plaintiffs alleged that they would not have purchased the yogurt, or would have paid less for it, had they known that each serving contained four grams of allulose. They described allulose as a monosaccharide, or simple sugar, and argued that presenting the product as “Zero Sugar” was misleading.The lawsuit remains a proposed class action. No court has yet certified a nationwide class of Chobani customers.
Why Allulose Is Central to the Dispute
Allulose is a sweetener that occurs naturally in small amounts in wheat, certain fruits and other foods. It can also be manufactured for use in food products. Although allulose is chemically considered a sugar, it is metabolised differently from common sugars such as sucrose and glucose.
The FDA permits manufacturers to use a value of 0.4 calories per gram for allulose when calculating calories on nutrition labels. Traditional sugar normally provides about four calories per gram. However, the lawsuit is mainly about the wording of federal labelling regulations. Those rules generally allow terms such as “sugar free” or “zero sugar” only when a product contains less than 0.5 grams of sugar per serving.
The relevant regulation defines total sugars as free monosaccharides and disaccharides. The appeals court concluded that allulose falls within that definition because it is a monosaccharide.
Why the Case Was Initially Dismissed
In May 2025, US District Judge John Tharp Jr. dismissed the lawsuit. The district court relied heavily on guidance issued by the US Food and Drug Administration concerning allulose.
In 2020, the FDA announced that it intended to use enforcement discretion when manufacturers excluded allulose from the “Total Sugars” and “Added Sugars” amounts shown on Nutrition Facts labels. This meant the agency generally did not plan to take enforcement action against companies that left allulose out of those figures while further rulemaking was considered.
The district court concluded that the federal framework permitted Chobani’s labelling. It therefore ruled that the plaintiffs’ state-law claims were pre-empted by federal law and dismissed the remaining claims brought by the Francos.
Why the Appeals Court Reversed the Decision
A three-judge Seventh Circuit panel disagreed with the lower court. During the appeal, the FDA submitted a legal brief stating that its regulation includes all monosaccharides, including allulose.
The FDA also explained that its 2020 guidance represented an enforcement policy. According to the agency, it did not formally amend the regulation or remove allulose from the legal definition of total sugars.
The appeals court found the FDA’s interpretation persuasive. It ruled that the consumers were seeking to apply state requirements matching the existing federal standard. Their claims were therefore not pre-empted for the reason accepted by the district court.
The judges also rejected Chobani’s argument that the complaint did not plausibly describe consumer deception. They said an absolute “sugar free” promise could potentially mislead reasonable consumers when the product contained four grams of allulose per serving.
What the Court’s Decision Does Not Mean
The ruling does not establish that Chobani deceived customers, violated consumer-protection laws or owes compensation. It only means the lawsuit should not have been dismissed on the grounds previously accepted.
The plaintiffs must still provide evidence showing that reasonable consumers were likely to be misled. They must also address class certification, damages and other legal requirements.
Chobani can present additional dismissal arguments after the case returns to the Northern District of Illinois. The company has maintained that it relied on FDA guidance and regulatory approval connected with the product’s labelling. The next stage may involve further motions, evidence gathering and examination of how shoppers understand the words “Zero Sugar.”