Court's Decision on CR 12(b)(6) Motion In Zupnik: FFDCA Preemption Under Further Attack and Twombly Ignored
We previously cited the motion to dismiss in Zupnik, et al. v. Tropicana Products, Inc. as an example of good pleading practice in a putative consumer fraud class case. United States District Judge Dale S. Fischer apparently disagreed with our assessment, this week issuing an order denying the motion.
Tropicana’s lead argument was a failure of pleading. Tropicana attacked the complaint both on the basis of Rule 9(b), and under the Supreme Court’s recent decision in Twombly. The Twombly decision requires the federal court on a Rule 12(b)(6) motion to determine whether operative factual allegations are “plausible” and more than simply “conclusory.”
Judge Fischer rejected summarily Rule 9(b) arguments. She completely disregarded Tropicana’s Twombly arguments, failing even to mention the Supreme Court’s decision.
Tropicana also moved to dismiss based on federal preemption. Most of Judge Fischer’s decision is devoted to the preemption argument. She ruled that since California’s Sherman Law is substantively identical to 21 U.S.C. § 343(a) of the FFDCA, the preemption argument fails.
Judge Fischer theorized that even though plaintiffs could not point to anything on Tropicana’s label that violated any FDA regulation, the FDA could bring an enforcement action “to target specific false or misleading labels.” If the FDA can bring that kind of action under 21 U.S.C. § 343(a), plaintiffs, according to Judge Fischer, should also be able to bring a private right of action under the identical California law. Query whether Judge Fischer’s reasoning negates any FFDCA preemption defense to a claim brought under California’s Sherman Act?
Preemption v. Plausibility: Will There Be More or Fewer Successful Consumer Fraud Suits?
Products Liability Law360 ran a piece this week entitled “Suits Over Deceptive Food Marketing Likely To Increase” (unfortunately, this is a subscription-only site) authored by Liz McKenzie. The article discusses rightly how increased FDA enforcement action may lead plaintiffs attorneys to file “piggy-back” putative class actions. For example, it took just 13 days following the FDA’s warning letter to General Mills concerning Cheerios for the first putative class suit to be filed.
Compounding increased FDA enforcement, recent rulings from the Supreme Court and the Third Circuit, like the Snapple Decision, have made it more difficult to assert a preemption defense in food cases in the absence of formal FDA rulemaking.
But, what one hand giveth the other taketh away. The hope for food companies is that that the Supreme Court’s recent decisions in Twombly and Iqbal will negate the preemption decisions and effectively heighten the bar for consumer fraud claims related to product marketing. Dismissal for failure to meet the new “plausibility” pleading standard and not preemption is exactly how the District Court ruled in Wright v. General Mills. Wright involved a putative class complaint involving Nature’s Valley products sold as “100% Natural” “even though the products contained one or more non-natural or artificial ingredients such as high-fructose corn syrup (’HFCS’).”
In Wright, the court found defective, under the Iqbal/Twombly “plausibility” standard, the plaintiffs’ injury-in-fact allegation. The Wright court ruled that the injury-in-fact allegation “conclusory,” “sparse” and “defective.” The plaintiff alleged only that “Defendant caused Plaintiff and other members of the Class to purchase, purchase more of, or pay more for, these Nature Valley products.”
Following the Supreme Court's new standard of notice pleading and its application in the Wright case, query how any putative consumer fraud class complaint can survive a Rule 12 motion without having first completed market surveys or gathering of other evidence of consumer injury.
Snapple Decision - FDA's Policy Concerning Use of "Natural" Not Entitled to Preemptive Effect
High Fructose Corn Syrup Labeling: Opening the Floodgates For Consumer HFCS Claims?
The Third Circuit ruled this week in Holk v. Snapple Beverage Corp., reversing the district court and reinstating the state law putative class claims for consumer fraud and breach of warranty for use of the term “all natural” despite the inclusion of high fructose corn syrup (HFCS) (though the court noted that the manufacturer no longer uses HFCS in its products).
The case is significant and is getting attention because the Third Circuit concluded that “FDA’s policy statement regarding the term ‘natural’ is not entitled to preemptive effect.” The court was persuaded because “the FDA declined to adopt a formal definition of the term ‘natural’ choosing instead to simply enforce its long standing ‘informal policy’”:
[T]he agency has considered “natural” to mean that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be expected to be there. For example, the addition of beet juice to lemonade to make it pink would preclude the product being called “natural.”
As expected, the court followed its previous ruling in Fellner v. Tri-Union Seafood, LLC (our blog entry about it is here), ruling that neither the FDA’s “informal policy” nor their enforcement letters were entitled to any preemptive weight.
Practice Tip: For the next HFCS case, preemption may not be a dead issue. The Third Circuit did not rule (though it expressed its skepticism) on the “express preemption” argument based on 21 U.S.C. § 343-1(a)(3). The court ducked the issue by concluding that Snapple waived the argument by not “advancing it” in the district court.
HFCS Labeling Case: Opening The Floodgates For New Consumer Claims?
The Third Circuit may be close to opening the floodgates of claims against food and beverage manufacturers who use high-fructose corn syrup (“HFCS”) in products labeled “all natural.” Shannon Duffy at the Legal Intelligencer reported recently on a “lively hour-long” oral argument in the Third Circuit about reversing a District Court’s dismissal of state consumer claims against Snapple for use of HFSC.
The District Court dismissed the consumer claims in 2007 on the basis of field preemption. The dismissal predated the Third Circuit’s decision in Fellner v. Tri-Union Seafood, LLC. See our previous blog on the Fellner case. Despite the FDA’s position in Fellner that a state law failure-to-warn claim is preempted by federal law, the Third Circuit ruled to the contrary.
In Fellner, a claim by a person who suffered from mercury poisoning after eating canned tuna literally for breakfast, lunch and dinner for five years may have been an outlier. But reversal of the District Court’s decision in the Snapple case will open the floodgates to consumer class action claims against a whole slew of food sellers and manufacturers.
Trademarking Green/Eco-Friendly Food - What You Need To Know
By Guest Blogger Jere Webb
It is evident that virtually every business now is trying to position itself as being “green”. For a discussion of restrictions on “green advertising”, particularly the FTC’s green ad guidelines (the “Green Guides”), and similar efforts at the state level, see “Green Claims Advertising – What You Can Say and What You Can’t”. The FTC is reviewing the Green Guides and likely will amend them in the near future. For comments submitted in the review process and additional information, see Green Guides.
The newer arena is green trademarks. The United States Patent and Trademark Office is now routinely rejecting, based on descriptiveness, multiword trademarks, that start with or contain the word GREEN. An example is the mark GREEN JOURNEY for hybrid cars. But in the same application, the applicant sought to register for clothing, and the Trademark Office accepted the mark, but with a disclaimer of the word GREEN. It found that the two word mark was merely “suggestive” of clothing, not “descriptive”. See "Green" Trademarks Face Hostile Climate in USPTO.
For an example of a green mark that passed muster, the Trademark Trial and Appeal Board (TTAB) recently reversed an examining attorney’s descriptiveness refusal for the mark GREEN INDIGO for clothing, finding it to be an “incongruous” term for clothing and therefore merely suggestive and not descriptive. The case is In re Jones Investment, Inc. (TTAB Jan. 21, 2009.)
The lesson is: If you want to include the word “GREEN” in a trademark, some careful review and advice from a trademark lawyer is in order.
Want to read more? See “Eco-Friendly Claims Go Unchecked” (USA Today June 22, 2009). The FTC’s brochure “Sorting Out Green Advertising Claims” can be found here.
Court Rules That Retailers Have No Duty to Investigate Suppliers Compliance with Organic Regulations
An important ruling was issued last week dismissing claims that milk produced by an organically certified dairy and labeled as organic was not really organic. Plaintiffs in the action asserted violations of various states’ laws because they claimed that they paid more for the milk because it was labeled as "organic.”
A federal judge in the Eastern District of Missouri granted a Rule 12(b)(6) motion to dismiss on a multitude of cases pending against the dairy, various retailers selling the dairy products and others (originally these suits were filed in various federal courts around the country but were consolidated for pretrial purposes by the United States Judicial Panel on Multi-District Litigation or MDL).
The judge ruled that claims against the dairy were preempted because a “conflict exists between federal and state law” (otherwise known as “conflict preemption”). As explained in the opinion, conflict preemption exists where “a party’s compliance with both federal and state law would be impossible or where state law would pose an obstacle to the accomplishment of congressional objectives.” Here, the court found that for “plaintiff’s claims to succeed, the Court would have to invalidate the regulatory scheme established under the OFPA [Organic Foods Production Act] and NOP [National Organic Program].” The court concluded that if plaintiffs were to prevail “producers would be liable even where fully certified and authorized to use these terms and seals.”
For the retailer defendants, the judge ruled that because plaintiffs’ claims against the dairy are preempted, “the retailer Defendants cannot be liable.” But the court went further and dealt explicitly with the plaintiffs’ claims that the retailers “should have investigated” the dairy’s activities to ensure compliance with the OFPA and NOP. The court rejected these arguments:
The Retailer Defendants did not have any duty to inspect [the dairy’s] facilities, or the facilities of any of their other organic producers. Imposing such a requirement “would place an undue burden on the distributor who is least likely to have access to such information.”
This should be good news for organic retailers. Hopefully, this decision will reduce their legal exposure to consumer labeling claims going forward.
California Appeals Court: No Mercury Warnings Required on Canned Tuna
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The California Court of Appeal for the First Appellate District has upheld a trial court ruling that canned tuna sold in California need not warn consumers about methylmercury.
In 2004, the State of California sued three tuna companies: Tri-Union Seafoods, LLC; Del Monte Corporation; and Bumble Bee Foods, LLC. The state argued, among other things, that California’s Proposition 65 requires the companies to provide warnings to pregnant women and women of childbearing age that the canned tuna the companies distribute and sell contains trace amounts of methylmercury, a chemical that can cause harm to a developing fetus. After a six-week trial in 2006, the lower court ruled against the state, holding that (i) Proposition 65 was preempted because it conflicts with federal law, (ii) the amount of methylmercury in canned tuna does not rise to the threshold level that would require a warning on the product, and (iii) the tuna companies are exempt from Proposition 65’s warning requirements because virtually all methylmercury is “naturally occurring.”
The state appealed, and the appellate court recently issued a decision upholding the tuna companies’ victory on the sole basis that substantial evidence supported the trial court’s finding that methylmercury is naturally occurring in canned tuna. Proposition 65 contains several exemptions to its warning requirements, one of which provides that there is no duty to warn if a chemical is naturally occurring in food. Significantly, the appellate court did not address the preemption or threshold level findings of the trial court. The court also posited scenarios that could lead to a renewed Proposition 65 claim against the tuna companies (see page 28 of the decision).
No word yet on whether the state plans to appeal to the California Supreme Court.
Another High-Profile California Labeling Case
Center for Science in the Public Interest (CSPI) recently filed a putative class action in federal court in the Northern District of California claiming that Glacéau’s VitaminWater is mislabeled under California law. This suit comes on the heels of the recent Ninth Circuit decision that remanded the Gerber foods case. We previously discussed the Gerber case on this blog and how it presents “serious questions as to whether there are any clearly defined legal standards as to when a food label is misleading and when it’s not.”
The VitaminWater case appears to raise similar issues. CSPI fails to point to anything directly in VitaminWater’s labeling or advertising that is actually incorrect. Instead, CSPI asserts that “the central message” of VitaminWater’s labeling “is that drinking VitaminWater is good for one’s health.” CSPI asserts this is misleading because “VitaminWater is loaded with sugar” and as a result “may actually harm consumers’ health.” CSPI also faults the product labeling because it fails to disclose that Glacéau, the company that manufactures VitaminWater, was purchased by a soft drink manufacturer.
Supreme Court Asked to Hear Preemption Case Involving Methylmercury; FDA Issues Draft Documents Regarding Consuming Commercial Fish
By Guest Blogger Bryan Anderson
The maker of Chicken of the Sea products has asked the U.S. Supreme Court to grant certiorari in a case we reported on involving preemption of state-law tort claims. In August 2008, the Third Circuit in Fellner v. Tri-Union Seafoods, LLC reversed the district court and held that Food and Drug Administration (FDA) actions regarding methylmercury content in tuna did not preempt the plaintiff’s claims under the New Jersey Product Liability Act. Tri-Union Seafoods’ certiorari petition presents two questions for the Supreme Court’s consideration:
1. Whether state-law tort claims based upon failure to warn of the risks of methylmercury in tuna fish products are preempted by the Federal Food, Drug, and Cosmetics Act and regulatory actions of the FDA, including a written determination that state-law warning requirements concerning methylmercury in tuna products are preempted by federal law and denial of a petition to require such warnings; and
2. Whether a “presumption against preemption” applies in conflict preemption cases.
If the Court grants the petition and hears the case, it certainly will have implications concerning local and state labeling requirements vis-à-vis federal agency action. Stay tuned; we will update you on this case as the plaintiff/respondent submits her brief opposing the petition.
Also related to methylmercury, the FDA yesterday published a notice in the Federal Register announcing the availability of two draft documents assessing the benefits and risks of consuming commercial fish.
The first document attempts to quantify the impact of eating commercial fish on three health endpoints: (i) fetal neurodevelopment, (ii) risk of fatal coronary heart disease, and (iii) risk of fatal stroke. The FDA notes that “[e]ach of these health endpoints has been associated in the scientific literature both with adverse effects of methylmercury exposure (including through fish consumption) and beneficial effects of regular fish consumption.”
The second document provides an overview of published scientific literature regarding beneficial effects of fish consumption and Omega-3 fatty acids for neurodevelopmental and cardiovascular endpoints.
Supreme Court Denies Certiorari on Salmon Labeling Case
UPDATE to previous blog entries about the California salmon labeling case (Albertsons v. Kanter) -
Just yesterday, the U.S. Supreme Court denied certiorari. The Supreme Court's ruling followed briefing submitted by the Solicitor General (aka Bush Administration). The Bush Administration argued in support of the California Supreme Court's opinion that claims under state law for alleged mislabeling of salmon are not preempted by federal law. The ruling of the California Supreme Court denying federal preemption will stand. The case will be sent back to the trial court to proceed as a putative class action.
When Is Labeling Misleading and Actionable Under State Law? Is There Any Clearly Understood Standard?
A recent Ninth Circuit case again raises serious questions as to whether there are any clearly defined legal standards as to when a food label is misleading and when it’s not. Manufacturers who are in compliance with federal standards for labeling may still be liable under state law.
In Williams v. Gerber, the Ninth Circuit, reversing the district court, reinstated a putative class action that alleged labeling on “fruit juice snacks” (1) constituted misrepresentation and breach of warranty under California common law and (2) violated California’s statutes on unfair competition and consumer law. The district court had granted a motion to dismiss under Rule 12(b)(6), finding that statements on the label “were not likely to deceive a reasonable consumer, particularly given that the ingredient list was printed on the side of the box.”
Here’s the label in question:
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In particular, the appellate court did not approve that the product, made of white grape juice, featured photographs of a variety of fruit on the label. The court also found misleading the statement that the product was made with “fruit juice and other all natural ingredients.” The product contained in addition to all-natural ingredients some ingredients the Ninth Circuit believed may not be “all natural.” The court believed that the statement, though not untruthful, should have disclosed more information.
Troubling in the court’s decision is that full nutritional and ingredient information was printed in similar size print on the same label. Even the court acknowledged that “reasonable consumers expect that the ingredient list contains more detailed information about the product . . . .” As a practical matter, the only way manufacturers can mitigate against these types of putative class actions is to involve lawyers directly in the marketing and labeling process. Under the world imagined in the Williams case, legal training seems to be a prerequisite to understanding which labels may give rise to litigation and which may not.
The Latest On The Battle Over Federal Preemption of State Salmon Labeling Claims. . .
The Supreme Court signaled last fall it may review a California Supreme Court decision finding that federal law does not preempt claims for violations of state consumer protection laws concerning “selling artificially colored farmed salmon without disclosing to . . . customers the use of color additive.” It invited the justice department to comment on the petition for certiorari.
Not surprisingly, the Bush Administration through its solicitor general took the side of those who seek to uphold the California Supreme Court’s decision finding no federal preemption. The petitioners filed a brief responsive to the government. Their argument is in part that:
In its brief, the United States never explains thequestion at the heart of this case: why Congresswould expressly prohibit private actions and even unsupervised state government actions to enforce the FDCA, but allow unregulable private actions toenforce state laws identical to the FDCA. Permitting private litigants to enforce state laws that admittedly“mirror” FDCA requirements cannot be squared with Congress’ intent that such requirements be enforced by government entities alone andthat control over such litigation be federally centralized.
It appears that the Supreme Court’s decision whether to accept review of this case will come earlier in the new year. Most Supreme Court watchers give this case a strong chance of receiving review. The decision could change the landscape of food liability law dramatically.
Salmon Labeling Probably Headed to Supreme Court
The U.S. Supreme Court signaled last week that it may review a California Supreme Court decision finding that federal law does not preempt claims for violations of state consumer protection laws concerning “selling artificially colored farmed salmon without disclosing to . . . customers the use of color additive.” Following a petition for certiorari filed in April, the Supreme Court issued an order last week inviting the Solicitor General “to file a brief in this case expressing the views of the United States.”
The Bush administration generally favors federal preemption of state consumer protection laws. Most Supreme Court watchers believe that the Court will grant certiorari if the Solicitor General advocates doing so. This case, if considered by the Supremes, is sure be significant with wide ranging implications for consumer protection claims concerning food product labeling.
California Menu Labeling Laws--Restaurants Beware of Asking What Your Customer Wants!
Yesterday, California became the first state in the Union to write into law menu labeling requirements. Like municipal ordinances recently enacted in New York City and Seattle, the California law requires certain “chain” restaurants to disclose nutritional information and calorie content information for certain items.
The law, to be phased in between 2009 and 2011, applies to restaurant chains with at least 20 locations that “offer for sale substantially the same menu items, or operates as a franchised outlet of a parent company . . . with the same name in the state that offer for sale substantially the same menu items.”
The new California law reads like a lawyer’s dream. Numerous exemptions are granted for certain grocery stores, “certified farmer’s markets” and others. Exemptions are also created to the exemptions. For example, “separately owned food facilities to which this section otherwise applies that are located in the grocery store” are not included in the “grocery store” exemption. To further add to the confusion, “grocery store” is defined to include convenience stores, though the law fails explain what that means. Does this mean that the law applies to a hamburger chain restaurant but not to the neighboring chain “convenience store” that sells the same hamburger but also a quart of milk? Does this make any sense? Won’t this statutue almost certainly generate significant litigation?
The labeling requirements apply to “standard menu items,” which are defined as “a food or beverage item offered for sale by a food facility through a menu, menu board, or display tag at least 180 days per calendar year . . . .” Yet a “standard menu item” does not include “a food item that is customized on a case-by-case basis in response to an unsolicited customer request.” What does "unsolicited customer request" mean? What about a sandwich shop that offers nearly infinite combinations of products? According to SUBWAY, “there are more than two million different sandwich combinations available" its menu.
Aside from being riddled with ambiguities, inconsistencies and impossible-to-interpret language, this blog has previously made the case that menu regulation should be the domain of uniform federal law and not inconsistent, piecemeal local ordinances. The California law is yet another argument in favor of federal preemption.
Section one of the California law cites national obesity statistics from the Centers for Disease Control and the federal Nutritional Labeling and Education Act of 1990. Nothing about this bill is specific to California. Because the law only applies to large restaurant chains, its impact is mostly on large national or regional companies. Ironically, the California legislature understood the problem of inconsistent regulation and chose to preempt all local and municipal regulation of restaurant menus. If menu regulation is an issue that needs regulation (and there are many good arguments why it does not), it should be taken up by Congress, the FDA and the USDA, not states or local municipalities.
Tuna's Not Just for Breakfast Anymore - Third Circuit Refuses FDA's Pleas for Federal Preemption
By Guest Blogger Amena Jefferson (Stoel Rives Summer Associate and UW law student)
Federal preemption is on the table once again. The U.S. Court of Appeals for the Third Circuit recently decided Fellner v. Tri-Union Seafoods, No. 07-1238, 2008 WL 3842925 (3d Cir. Aug. 19, 2008). In this case, the plaintiff allegedly fell ill from mercury poisoning after consuming canned tuna “almost exclusively” for five years (1999-2004). The plaintiff sought recovery under the New Jersey Product Liability Act for Tri-Union’s failure to warn of the risks posed by methylmercury in its canned tuna.
The FDA previously issued a consumer advisory and a backgrounder about the risk of mercury in tuna. In 2004, while a similar lawsuit was pending in California (People v. Tri-Union Seafoods), the FDA sent a letter to the attorney general of California noting that state warning claims are preempted because the “existence of the lawsuit would ‘frustrate the FDA’s carefully considered federal approach’” to methylmercury content in tuna. A California court determined, based on the FDA’s action, that claims under California Proposition 65 were preempted by federal law.
The Third Circuit disagreed. It reversed the district court’s ruling that the state claims are preempted, and instead concluded that no preemption exists because FDA advisories on tuna and methylmercury are not “law.” The appellate court concluded that the FDA letter merits “a particularly low level of deference” because it is not “the product of an agency proceeding.” Yet, the the Third Circuit never indicated how a warning could have been issued without running afoul of the FDA and federal law, other than to say that a warning “could have specified that the risks become material only with frequent tuna consumption, and that moderate fish consumption offers positive health benefits.”
So how does this make sense? On the one hand, the FDA specifically said it intended to preempt state law; on the other, the court said it didn’t. The decision opens the door for even more confusing and conflicting local and state labeling requirements. Can this kind of confusion and conflict promote customer safety? Why is the Third Circuit going out of its way to disagree with the FDA and side with a person choosing a canned-tuna-only diet? Are state tort laws really meant to protect someone who makes this kind of extreme dietary choice?
King County Menu Labeling Goes into Effect August 1, 2008--Yet Another Call for Preemption?
Effective August 1, King County, Washington, will impose the strictest menu labeling law in the nation. King County’s law imposes menu labeling requirements, on restaurant chains that have the following characteristics: 1. The same name.
2. Operating permits from Public Health—Seattle and King County.
3. Fifteen or more locations in King County or nationwide—this legislation does not affect food establishments with 14 or fewer locations.
4. Gross annual revenues of $1 million or more.
5. Standardized menu items that use standard recipes.
The county won’t start imposing fines until January 2009. Yet for small restaurants that just meet the 15-restaurant and $1 million thresholds, or for franchise owners, these requirements can be onerous, especially if the restaurant maintains a large menu or large variety of seasonal foods. Costs for nutritional testing on a variety of products can be prohibitively expensive. Will this law have the perverse effect of limiting consumer choice and use of seasonal, local products on menus?
Even for larger restaurant chains that already provide nutritional information, King County’s law will impose requirements that may increase costs because King County’s rules may be inconsistent with nationwide distribution and marketing.
Restaurants in both New York City and San Francisco faced with similar (though arguably less onerous) local regulations are challenging the laws in those cities. Among other things, there are serious First Amendment issues (though lawyers in New York City are apparently relying on the King County law to show how it could be made to comply with First Amendment speech protections).
Menu laws are also being challenged on grounds of federal preemption (even though the FDA has apparently taken the position that its laws do not preempt local menu regulations). I have written several times on this blog about the need for federal preemption. No area demands federal preemption more than regulation of chain restaurant menus.
For evidence why the federal and not local governments should be regulating nutrition, look at King County’s self-stated reasons for passing its law: “rising health care costs, our growing number of obese, diabetic and chronically ill residents, and a lack of information to inform choices that improve our health.” Are any of these reasons unique to King County? The studies relied on by King County are national and not unique to King County. The restaurants targeted are national and are generally not King County-based restaurant chains.
Only the national government has the resources to investigate the obesity epidemic—something that has baffled scientists and for which there is no proven cause or cure. Before our restaurant industry is impacted and consumer choice is further limited, shouldn’t we devote the full resources of the federal government to the problem? Do we expect the obesity epidemic be solved by an inconsistent patchwork of local county laws?
A Cry for Federal Preemption?
In Arkansas, a putative class action has been filed by consumers who allege violations of consumer protection laws of four states because they purchased Tyson chicken products with packaging labeled, “Raised Without Antibiotics.” The plaintiffs claim that the packaging was “deceptive,” and they were “de-frauded” because the feed consumed by the chickens contained Ionophores, which is classified by the FDA as an antibiotic.
The putative class action follows a Lanham act case filed by Tyson’s competitors in the U. S. District Court, District of Maryland. The product labeling was approved by the USDA under its authority from the Poultry Products Inspection Act (“PPIA”), 21 U.S.C. § 451. Despite approval from the USDA, the court ruled that the competitor’s claims could proceed and enjoined Tyson from future use of such labeling. The court reasoned that the USDA regulates labeling, not advertising. Deciding that the labeling was also advertising, the court held the labeling was fair game for a Lanham act suit.
Effectively, the court opened the floodgates for class action litigation for labeling approved by the USDA. The decision is significant. It promises to energize the growing movement of consumer labeling class action work. The decision may also have a destabilizing effect on producers that rely on FDA and USDA rulings and regulations. Already, producers of organic milk face challenges under state consumer protection acts for alleged product mislabeling of milk as organic, despite organic certification approved by the USDA.
One of two things will happen: (1) full-time product-labeling litigation work for lawyers or (2) legislation by the U.S. Congress enabling federal preemption. The latter is obviously the more sane course. Nothing is more inefficient than regulation of product labeling through state consumer class action claims. Expert regulatory agencies such as the FDA and the USDA, not judges and juries, should decide what constitutes appropriate labeling and advertising of food products.
California Farm-Raised Salmon Cases - Preemption
The California Supreme Court last week issued an opinion that federal law does not preempt complaints brought under state deceptive-marketing laws against grocery stores for allegedly selling artificially colored salmon.
The trial court found that claims were preempted by section 337(a) of title 21 of the U.S. Code, a provision of the Federal Food, Drug, and Cosmetic Act (“FDCA”) (21 U.S.C.
§ 301, et seq.).The Court of Appeal affirmed the resulting judgment of dismissal. The California Supreme Court concluded “that section 337(a) does not preempt the action as plaintiffs do not seek to ‘enforce[], or to restrain violations’ of, the FDCA. (§ 337(a).) Rather, plaintiffs’ claims for deceptive marketing of food products are predicated on state laws establishing independent state disclosure requirements 'identical to' the disclosure requirements imposed by the FDCA, something Congress explicitly approved in section 343-1. (§ 343-1(a)(3).)”
