A federal district court recently denied defendant’s motion to dismiss in a putative class action under California’s Unfair Competition Law alleging that defendant engaged in misleading conduct by advertising its “Healthy Choice” pasta sauce as “all natural” even though it includes some “high fructose corn syrup.” Lockwood v. Conagra Foods, Inc., 2009 WL 250459 (N.D.Cal. Feb. 3, 2009).
Defendant moved to dismiss on several grounds: arguing plaintiffs’ claims were expressly preempted by the Nutrition Labeling and Education Act; were impliedly preempted by comprehensive FDA regulations under the Federal Food and Drug Cosmetic Act; that the court should defer to the FDA under the “primary jurisdiction” doctrine. Finally, defendants asserted that the court should strike the class allegations because plaintiffs cannot prove reliance on a class-wide basis.
Regarding the field preemption argument, the court noted that the purpose of the NLEA was to clarify and to strengthen FDA’s authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about the nutrients in foods. Under the Act, states may impose labeling requirements for artificial favors, colors or preservatives only if such requirements are identical to those imposed by the FDCA; any differences are preempted. But, the court held, this provision does not apply to plaintiffs’ complaint as currently pled. Plaintiffs did not allege that defendant’s pasta sauce contains artificial flavoring, coloring or a chemical preservative; rather, they allege that the “high fructose corn syrup” is not produced by a natural process and therefore the pasta sauce is not “all natural.” One wonders why the claims of not all “natural” due to the use of an “artificial” flavor isn’t squarely in that ballpark.
Turing to implied field preemption, the court noted that NLEA’s provisions suggest Congress did not intend to occupy the field of food and beverage labeling. The FDA’s policy as to the word “natural” similarly suggested an intent not to occupy the field of food labeling. Under the policy, the agency has considered natural to mean merely 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 there. Although the FDA acknowledges that some consumers may be misled by the use of the term “natural,” it has declined to adopt any regulations governing this term. This inaction is consistent with an intent not to occupy the field. This is especially so given that at the time the FDA declined to formally define “natural” it was aware of and had reviewed state regulation of the use of the term, yet it made no mention of the need for uniformity or a preemptive federal regulation.
On conflict preemption, the court found that the defendant had not proved as a matter of law that plaintiffs’ claims, if successful, make compliance with federal law a physical impossibility. A manufacturer could comply, that is, not violate, the FDA’s policy as to use of the term “natural” and still comply with state law as articulated by plaintiffs in this case, thought the court. Nor does California law stand as an obstacle to the accomplishment and execution of the objectives of the FDCA. Again, it seems questionable that this type of claim wouldn’t risk imposing labeling requirements for “artificial” favors, directly in contrast to federal regulations.
Regarding primary jurisdiction, the court found application of the doctrine was not appropriate here. At a minimum, various parties have repeatedly asked the FDA to adopt formal rulemaking to define the word natural and the FDA has declined to do so because it is not a priority and the FDA has limited resources. Moreover, the court did not feel this was a technical area in which the FDA has greater technical expertise than the courts. Finally, plaintiffs’ claims were based on state law and, thus, federal law would not dispose of plaintiffs’ state law claims.
Finally, the court declined to strike the class allegations at this juncture, finding that if a misrepresentation is material an inference of class-wide reliance may be inferred under the California law. MassTortDefense has posted about the growing trend of plaintiffs to use consumer fraud act claims in place of traditional product theories. Plaintiffs continue to believe that claims based on unfair and deceptive trade practices acts are somehow easier to certify as class actions because of differing notions of reliance and causation.