California federal courts now appear positioned to lead the way nationally on the issue of whether food products containing genetically modified ingredients, commonly referred to as “GMOs” can be labeled “All Natural.” Just last week a federal judge in Colorado stayed the case of Nicole Van Atta v. General Mills, Inc. (Case No. 12-cv-02815-MSK-MJW) (PDF), pending the Food and Drug Administration’s (FDA) input on this very issue recently sought from the agency by a California judge in the case of Cox v. Gruma Corp. (Case No. 12-CV-6502 YGR) (PDF).
California, a hotbed of consumer litigation activity due to the state’s expansive consumer protection laws, has become a particularly common venue for consumer class actions alleging misbranding and false advertising regarding the use of “All Natural” claims. In particular, many cases have been filed challenging a manufacturer or retailer’s use of “All Natural” labels on products containing GMOs. These lawsuits are typically brought under California’s unfair competition and false advertising laws (referred to as the “UCL” and “FAL” or §§ 17200 and 17500 of the California Business and Professions Code).
Cox v. Gruma Corp. (“Cox”), the case that lead to the Colorado court’s stay, is a class action lawsuit filed in December 2012 in U.S. District Court for the Northern District of California against Gruma Corporation, the manufacturer of Mission® Tortilla chips. The complaint in Cox alleges that the product’s labeling is false and misleading because it claims to be “All Natural” when it is not in fact natural due to the involvement of genetically modified corn seed in the product’s manufacture.
In Cox, U.S. District Judge Yvonne Gonzalez Rogers issued a final order dated July 11, 2013 (PDF) that stayed the class action for six months and referred to the FDA for an administrative determination the precise question of whether a food product containing GMO ingredients may be labeled “All Natural.” In making her decision, Judge Rogers agreed with plaintiffs’ argument that “a gaping hole in the current regulatory landscape for ‘natural’ claims and GMOs” exists. Accordingly, relying on the primary jurisdiction doctrine, Judge Rogers explained that a court may stay proceedings or even dismiss a complaint without prejudice where the claims involve “an issue of first impression or a particularly complicated issue Congress has committed to a regulatory agency.” Clark v. Time Warner Cable, 523 F. 3d 1110, 1114 (9th Cir. 2008). Based on the nature of the claims in this lawsuit, Judge Rogers concluded that “[u]nder these circumstances, deference to the FDA’s regulatory authority is the appropriate course.”
Many, including the plaintiffs, were surprised by this order based on the fact that, more recently, judges handling similar cases in California have refused to apply the primary jurisdiction doctrine to dismiss or stay matters. The plaintiffs object to the stay order. They argue that FDA has repeatedly declined to define the term “natural” when asked to do so, and there is no reason to suspect it should address the issue now differently now. Specifically, in 2010, a New Jersey federal court judge stayed a food-labeling suit against Hornell Brewing Co. Inc. and ordered FDA to address whether products that contain high-fructose corn syrup may be labeled “natural.” In a September 2010 letter responding to the court (PDF), Michael Landa, Acting Director of Center for Food Safety and Applied Nutrition (CFSAN) at the time, wrote that FDA was declining to provide such a determination.
It is unclear how FDA will respond to the recent order issued in Cox v. Gruma Corp., however, it is undeniable that there is mounting pressure on the agency to act. Although the Cox plaintiffs are correct that FDA has declined to issue formal rules concerning what is and is not “natural,” courts appear to recognize that something this time “feels” different. Perhaps this is because FDA and courts are undeniably more cognizant of the need for resolution of this issue in the context of GMO-containing products given voter interest on the issue throughout 2012, recent Congressional pressure in the form of letters to the agency requesting action on GMO labeling, and several court orders now staying litigation specifically on the issue of whether GMO-containing foods can be labeled “All Natural.”
While it is not expected that the FDA will issue a formal rule in response to recent court orders, it is expected that FDA will respond in some form six months from now in a manner that will tell us whether it will, or will not, issue formal rules or updated guidance on this issue in the reasonably near future. For certain, it will be interesting to see how the Court in Cox formally deals with this issue six months from now and how that case impacts litigation throughout the country.
Stoel Rives attorneys will continue to track this case and other similar “All Natural” cases as developments occur. Check back here for updates.
A few months ago, I wrote about a $1.2 billion defamation lawsuit filed by Beef Products, Inc. (BPI), a South Dakota-based meat processor, against ABC News Inc. found here. The most recent development in the case occurred on October 31 when lawyers for ABC filed a motion to dismiss.
In September, BPI, along with Technology, Inc. and Freezing Machines, Inc., collectively filed suit against American Broadcasting Companies Inc., ABC News Inc., ABC news anchor Diane Sawyer and ABC correspondents Jim Avila and David Kerley in Circuit Court in Union County, South Dakota claiming that ABC’s news coverage of lean finely textured beef (LFTB), or what became infamously known by the nickname “pink slime,” was defamatory and ultimately devastating for the company’s reputation and business. Since being filed, the case has been removed (PDF) to the U.S. District Court for the District of South Dakota. The complaint also named as defendants Gerald Zirnstein, the U.S. Department of Agriculture (USDA) microbiologist who called the product “pink slime,” Carl Custer, former federal food scientist, and Kit Foshee, a former BPI quality assurance manager who was interviewed by ABC.
Earlier this year, on March 7, 2012, ABC began reporting during its World News program that much of the ground beef we buy at the supermarket contains the product that the industry calls LFTB and others call “pink slime.” Over the next month, ABC continued to report on the story, both online and on its television news programs.
In its later complaint, BPI alleged that the news agency, in reporting on LFTB, had knowingly and intentionally published false and disparaging statements regarding BPI and its product and improperly interfered with BPI’s business relationships. BPI argued that the statements made by ABC were not only inconsistent with information provided to them by BPI but were also contradictory to the findings of the USDA’s Food Safety and Inspection Service (FSIS), the Food and Drug Administration (FDA), food safety organizations, and many beef industry experts. BPI claimed that ABC’s news reports constituted common law defamation, product disparagement, and tortious interference. In addition, BPI alleged a cause of action under South Dakota’s statutory Agricultural Food Products Disparagement Act (AFPDA).
Most recently, on October 31, 2012, lawyers for ABC News submitted a motion to dismiss BPI’s lawsuit (PDF). In its memorandum in support of the motion to dismiss, ABC asserts that none of BPI’s claims are viable. Specifically, ABC argues that BPI cannot state a claim under South Dakota’s AFPDA, because that law only authorizes an action for statements that question the safety of a product. ABC claims that it did not question the safety of the product as BPI claims, but instead stated that LFTB is safe to eat.
Secondly, ABC maintains that BPI cannot state a claim for product disparagement because “any such claim is preempted by AFPDA, and because the ABC News reports would not be actionable under traditional common law standards in any event.” For instance, ABC explains:
[R]eporting that critics call LFTB pink slime is not actionable: that term, while unflattering, does not convey false facts about the color or texture of LFTB and is precisely the kind of “imaginative expression” and “rhetorical hyperbole” that is constitutionally protected. And the ABC News reports cannot reasonably be understood to imply that LFTB is “not safe for public consumption” or “not nutritious.” The reports repeatedly state that LFTB is “safe to eat,” though “not as nutritious as ground beef” a viewpoint BPI does not challenge. BPI’s other claims are based on quibbles with specific language that do not affect the “substance” or “gist” of the reports.
Lastly, ABC states that BPI’s claims of libel and of tortious interference with business relationships both fail. A decision on the motion is currently pending.
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.
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.
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.
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.