It seems that there’s a reason to blog about Pom Wonderful or a similar case almost weekly, and the cases always seem to come from California. So now we have Brazil v. Dole Food Company, 2013 WL 1209955 (C.D. Cal. Mar. 25, 2013). This one is a class action (Pom Wonderful was a business dispute) in which the plaintiff claims that certain Dole food products were improperly marked as “natural,” “fresh,” “sugar free,” “low calorie,” or the like. Plaintiff’s claims are the usual suspects: violations of California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”) and Consumer Legal Remedies Act (“CLRA”), violations of the Song-Beverly Consumer Warranty Act and Magnuson-Moss Warranty Act, and an unjust enrichment claim.
Now, the outcome was generally good. The court dismissed all of plaintiff’s claims. But some bad came with it. The dismissals of plaintiff’s UCL, FAL and CLRA claims were without prejudice because those particular dismissals were based on plaintiff’s failure to satisfy FRCP 9(b)’s heightened pleading standards for fraud. The court rejected the Defendant’s argument that those claims should be dismissed “with prejudice” as preempted by the food labeling portions of the FDCA. So the plaintiff has the opportunity to replead them.
As background, you may recall that the 9th Circuit in Pom Wonderful, upheld the dismissal of Lanham Act claims about food labeling because they were barred by the FDCA, which can be enforced only by the United States, not private plaintiffs. And last week on remand, the Pom Wonderful district court dismissed plaintiff’s remaining state-law claims as preempted by the FDCA. So why wouldn’t the Brazil court dismiss plaintiff’s food claims as preempted?
Well, the plaintiff in Brazil found a friend in medical-device parallel violation claims. California has the Sherman Act, which seems to adopt the FDA’s food regulations word-for-word: [a]ll food labeling regulations and any amendments to those regulations adopted pursuant to the [FDCA] ... shall be the food regulations of this state.” 2013 WL 1209955, at *5 (quoting Cal. Health & Safety Code § 110100). Plaintiff was trying, he claimed, to enforce those now-state regulations using the UCL, FAL and CLRA. With that, he argued that he was enforcing food regulations identical to the FDA’s. Id. That was good enough for the court, which based its decision on the parallel-violation medical-device claims that the Supreme Court in Riegel said are not preempted:
Thus, the Supreme Court concluded that Section 360k, [the medical-device preemption clause of the FDCA,] “does not prevent states from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case ‘parallel,’ rather than add to, federal requirements.”
Id. at *8. So, the Brazil court decided that plaintiff’s parallel-violation food-labeling claims were not preempted either.
As for how to handle Pom Wonderful, the court determined that the 9th Circuit’s decision was not controlling. It addressed two federal statutes, not the FDCA and identical state regulation. The court didn’t address the Pom Wonderful district court’s recent preemption decision on remand. If it had, however, we’d bet that it would have found it inapplicable because it involved a defendant who complied with FDA regulations, meaning that the Pom Wonderful plaintiff was necessarily trying to enforce standards different from the FDA. The Brazil plaintiff, on the other hand, is claiming that the defendant violated FDA regulations (as adopted by the state).
The court also rejected the primary jurisdiction doctrine, under which a court may dismiss or stay a case in deference to the FDA’s regulatory expertise in the area. In discussing Astiana v. The Hain Celestial Group, Inc., 2012 U.S. Dist. LEXIS 165368 (N.D. Cal. Nov. 19, 2012), we described when that doctrine can be applied:
The doctrine of primary jurisdiction applies when there is (1) a need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.
2012 U.S. Dist. LEXIS 165368, at *6.
The Hain Celestial court deferred to the FDA. The Brazil court found a distinction. In Hain Celestial, the defendant promoted a cosmetic as “natural,” a term on which the FDA had not yet issued regulations or guidance. That silence offered a reason to defer to the FDA – so that it may ultimately speak first. In Brazil, on the other hand, the FDA had issued regulations on the food terms addressed in plaintiff’s complaint, meaning that there was no unclear area of FDA regulation on which to defer:
Hain Celestial is inapposite because [here] the FDA has established requirements applicable to all of the alleged violations Brazil asserts. In fact, as noted previously, Defendants concede, “there is no label element Plaintiff challenges that is not addressed by FDA regulation or policy.”
Id. at *10.
So it appears that, for now, the Brazil claims has slipped through a number cracks in the preemption defense, the smallest and murkiest of which is the one for “parallel violation” claims. We’ve always found that limited exception to be muddled and, accordingly, anything but uniformly applied.
But don’t worry yet. The Brazil litigation is young. We expect to post on it again. Plaintiff’s complaint had few facts and it may not be easy for plaintiff to sufficiently amend it. As of now, the complaint doesn’t sufficiently identify the products at issue, the regulations allegedly violated, how the plaintiff was misled, or what the plaintiff relied on. As the court summed it up, plaintiff “has not supported his allegations with even a minimal degree of factual specificity.” Id. at *16. If plaintiff files an amended complaint to fill-in details, the new complaint may actually clarify that plaintiff’s claims are preempted. Or, by better identifying the products and the regulations, the amended complaint may actually show that the regulations were not violated. Also, remember that the Pom Wonderful decisions were issued after some discovery had happened. So even if plaintiff’s amended complaint survives, targeted discovery might establish, yet again, that plaintiff’s claims are preempted.
It’s early, and we’re pretty sure we haven’t seen the last of this litigation.