Takeaways from 2010 GMA Food Litigation Conference
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Stoel Rives was a sponsor of this year's GMA food litigation conference in Austin from February 22 to 25. The slide deck from Ken Odza's presentation on consumer fraud class claims can be viewed by clicking on the image to the left.
Some of the takeaways from my presentation and those by others at the conference include:
- Assure Marketing Is in Sync with R&D (to Avoid Exposure from Consumer Fraud Class Claims) (Ken Odza, Paul Benson, Richard Fama)
The point was underscored in several presentations that exposure on consumer fraud class claims often comes from unsupported marketing claims (health claims in particular). Marketing departments should make sure not only that claims are supported but that the supporting research is not contradicted by other credible internal or external research.
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Iqbal/Twombly Makes FRCP 12(b)(6) Motions More Attractive (Ken Odza, Richard Famas)
The Supreme Court has overruled the Conley standard on Rule 8 notice pleading. "Plausibility" is the new pleading standard on a Rule 12(b)(6) motion to dismiss. If the operative allegations are not factually specific and the complained-of-conduct can be explained by another obvious reason, the complaint may be dismissed. -
Class Certification in Consumer Fraud Cases Not Likely If Individualized Reliance/Causation Need to Be Proven (Ken Odza)
A court should deny class certification in a consumer fraud case under the FRCP 23(b) "predominance" standard (1) when the proposed class includes multiple states with materially different statutes or (2) where the applicable state law requires an individualized showing of reliance/causation for each class member.
- Inexorable Pursuit of Zero, and the EPA Asserting Itself in Food Safety (Scott Rickman, Bob Brackett)
As technology improves and chemicals can be detected at lower and lower levels, regulators are looking at stricter standards and lower thresholds. EPA, for example, has a renewed emphasis on risk assessments that will inevitably affect food regulation.
- FALCPA Does Not Apply to Restaurants, but "Allergen-Free" and "Gluten-Free" Claims Must Be Supported (Joseph Bottiglieri)
- Pros and Cons Of MDLs (Paul LaScala)
Paul La Scala provided a thorough and thoughtful analysis of the pros and cons of Multi-District Litigation (MDL) from a defendant's perspective.
- FDA Recall Procedures Manual Is a Great Resource and Can Be Found Online (Tom Mazziotti)
The FDA's regulatory procedures manual (or at least the chapters related to recalls) should be mandatory reading as part of any company’s recall preparedness program.
- Class Actions and Mass Torts on the Rise Internationally with More Countries Passing Plaintiff-Friendly Laws (Greg Fowler)
American companies selling products abroad need to be aware of and prepared for litigation abroad with rules that are increasingly unfriendly to business.
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.
