In Terri Perea v. Walgreen Company, et al., case No. EDCV 13-00119 DOC (ANx), the District Court for the Central District of California dismissed plaintiff’s putative class action complaint on the grounds that plaintiff’s claims are preempted by federal law.
In Perea, plaintiff filed a putative class action on behalf of herself and all others similarly situated who purchased defendant Walgreens’ private-label brand of “Nice 100% Pure Honey” (“Nice Product”), under the belief that the honey had not been altered to remove all pollen. Plaintiff contended that Walgreens violated California law by selling the Nice Product as “honey,” even though the pollen had been removed. Specifically, plaintiff contended that the retailer violated California Food and Agriculture Code section 29413(e), prohibiting the removal of pollen from honey, except where such occurs unavoidably in the removal of contaminants; and violated section 29671, prohibiting the sale of any product labeled as honey that does not conform to section 29413(e). Plaintiff also alleged that Walgreens violated California’s Unfair Competition Law.
Walgreens removed the case to the District Court for the Central District of California and moved to dismiss the putative class action pursuant to Federal Rules of Civil Procedure (“F.R.C.P.”), Rule 12(b)(1), for lack of subject matter jurisdiction, and 12(b)(6), for failure to state a claim upon which relief can be granted. Specifically, Walgreens argued that plaintiff lacked standing, and that her California state law claims were preempted by federal law.
The court rejected the argument that plaintiff lacked standing. The court explained that to establish standing under Article III of the Constitution, plaintiff must demonstrate injury-in-fact, causation, and redressability. In particular, Walgreens argued that plaintiff did not suffer injury-in-fact because: 1) the sale of pollen-less honey is legal; and 2) plaintiff suffered no legally-cognizable damages because she could have availed herself of Walgreens’ money-back guarantee. The court rejected both of those arguments. The court explained that a plaintiff suffers an economic injury sufficient to satisfy the requirements of standing when she relies on a product label and would not have purchased the product but for the allegedly inaccurate information on the label. The court dismissed Walgreens’ argument that plaintiff did not suffer injury because the sale of pollen-less honey is legal on the grounds that this issue concerns the merits of the case, and not standing. The court further determined that the availability of a money-back guarantee did not prevent plaintiff from alleging economic injury. Plaintiff had standing, the court concluded, because in reliance on the label, she purchased a product lacking an ingredient (pollen) important to her purchasing decision.
The court then addressed Walgreens’ argument that California Food and Agriculture Code sections 29413(e) and 29671 are preempted by federal law. The Nutritional Labeling and Education Act (“NLEA”) contains an express preemption provision, 21 U.S.C. §343-1(a)(3), which prohibits states from establishing any requirement for the labeling of food that (1) is of the type required by 21 U.S.C. section 343(i)(1), and (2) is not identical to the requirements of that section. Section 343(i)(1) applies to food products without a federal definition and standard of identity and requires that such products bear their “common or usual name.” Based in part on the definition of “honey” provided by the National Honey Board, the court determined that the term “honey” is the common or usual name for honey with or without pollen.
The court concluded that plaintiff’s state law claims are preempted because section 29413(e) and 29671 create requirements for the labeling of honey that are not identical to 21 U.S.C. section 343(i)(1). The court further explained NLEA’s preemption provision applies regardless of whether a federal standard of identity exists. As a result, the court concluded federal law preempts plaintiff’s claim that California law prohibits the sale of the Nice Product as “honey” and granted Walgreens’ motion to dismiss plaintiff’s complaint for failure to state a claim upon which relief can be granted.
The court added that plaintiff’s claims for violation of the California Food and Agriculture Code must be dismissed even if not preempted, because there is no private right of action to enforce sections 29413(e) and 29671. The court also held that plaintiff failed to state a claim for unlawful business practices under California’s unfair competition laws because 21 U.S.C. section 343(i)(1) specifically permits the sale of Walgreens’ Nice Product as honey.