The world may never know how many licks it takes to get to the center of a Tootsie Roll Pop, but we do know it only took three judges on the California Court of Appeals to affirm a demurrer in Tootsie Roll’s favor.
Did you know Tootsie Rolls first came on the market in 1896 and were originally delivered by horse and buggy? Or that they were said to be Frank Sinatra’s favorite candy? And long before the wise old owl bit into the Tootsie Roll pop, the candy was advertising on television dating back to the 1950s. Tootsie Roll has had its home base in New York, New Jersey, and Chicago – where they are still manufacturing 64 million rolls every day. So, what could possibly be wrong with a Tootsie Roll? According to the FDA, nothing, and that’s why the court dismissed the putative class action in Beasley v. Tootsie Roll Indus., 2022 Cal. App. LEXIS 982 (Cal. Ct. App. Nov. 30, 2022).
Plaintiff alleged that she consumed Tootsie Rolls from 2010 to 2016 apparently without knowing that they contained artificial trans fats in the form of partially hydrogenated oils (PHOs). Note: PHOs were on the label. Having consumed the Tootsie Rolls, Plaintiff alleged she was at an increased risk for conditions like cardiovascular disease and type 2 diabetes. PHOs aside, Tootsie Rolls are essentially chocolate flavored sugar. So, sure they play their role in all those nasty obesity-related health conditions. But that cannot serve as the basis for an Unfair Competition Law (“UCL”) claim or an implied warranty claim. As it turns out, thanks to very specific language from both the FDA and Congress, neither could the presence of PHOs before 2018.
A plaintiff can bring a claim under California’s UCL for a business act or practice that is “unlawful, unfair, or fraudulent.” Plaintiff Beasley alleged Tootsie Roll’s act of using PHOs was both unlawful and unfair. To prove an unlawful claim, plaintiff must show that the defendant violated either a federal or California statute or regulation. Like with drugs, foods regulated by the FDA cannot be “adulterated.” A food is deemed adulterated if it contains a food additive that is “unsafe”—which is a substance that is not generally recognized as safe (GRAS). The FDA considered the issue of whether PHOs were GRAS in 2013 and 2015 and concluded that PHOs “are no longer GRAS.” Id. at *11. But because PHOs were in use in many products, the FDA did not make its determination effective immediately. Instead, it set a compliance date of June 18, 2018. The FDA explained that the compliance period was to allow manufacturers to find replacement ingredients and to reformulate and modify labeling of affected products with minimal disruption to the market. Id. at *12. Later that year, Congress enacted the Consolidated Appropriations Act of 2016 (CAA) which, consistent with the FDA’s determination, provided that “PHOs would not be considered unsafe, and foods containing PHOs would not be considered adulterated, under the FDCA until the June 18, 2018 compliance date.” Id. at *13.
Since Tootsie Roll’s use of PHOs prior to 2018 did not violate FDCA’s prohibition on adulterated food, it could not serve as the basis for plaintiff’s UCL claim. Plaintiff tried to argue that the CAA did not apply retroactively; and while there is a presumption against retroactivity, it does not apply if “Congress has expressly prescribed the statute’s proper reach.” Id. at *15. Plaintiff also tried to tie her UCL unlawful claim to California’s Sherman Act or little FDCA. First, while the California legislature had authority under the Sherman Act to adopt regulations regarding PHOs that differed from the FDA’s, they did not do so. Meaning as to PHOs all the Sherman Act did was incorporate the FDA’s regulations, which the court already determined could not be the basis of plaintiff’s UCL claim. Id. at *19. Second, if they had adopted different regulations, they would have been preempted:
We conclude obstacle preemption applies here. Permitting the use of broad state statutory provisions such as those cited by Beasley (governing “adulterated” foods) to impose liability for PHO use prior to the federally established compliance date would “stand as an obstacle” to the achievement of Congress’s evident purpose in enacting section 754, i.e., to confirm the June 18, 2018 compliance date that the FDA established after careful consideration and a notice-and-comment proceeding.Id. at *22.
The court was unpersuaded by plaintiff’s presumption against preemption argument where
Congress’s adoption of the FDA’s compliance date establishes Congress’s clear and manifest purpose that use of PHOs prior to that date would be legal, thus rebutting the presumption against preemption.Id. at *23.
Nor was the court persuaded by plaintiff’s reliance on other cases where broad federal regulatory schemes were found not to preempt state law prohibiting specific conduct. That’s because Beasley presented the reverse situation. Plaintiff could not use general state laws that contained no prohibitions on PHOs to get around very specific federal laws that expressly set a compliance date. Id. at *27.
Plaintiff’s UCL claim based on an unfair practice suffered the same fate. The UCL cannot be used to prohibit conduct that is permitted by federal law. In other words, it cannot be used to make an end run around the FDCA. Where specific legislation creates a safe harbor, the UCL cannot be used to “assault that harbor.” Id. at *28-29.
Finally, plaintiff alleged that Tootsie Roll breached its implied warranty of merchantability because the candies were not fit for their ordinary purpose of human consumption. But their intended purpose was to be eaten, which they were. But the court did not need to decide the particulars because like her UCL claim, her implied warranty claim was preempted. California’s general warranty law could not be used to impose liability for conduct that the FDA and Congress determined to be lawful. Id. at *30-31.
Getting to the center of this case was a easy as that wise old owl made it look. 1-no unlawful claim; 2-no unfair claim; 3-preemption. And just like that it’s gone.
This article was written by Michelle Yeary of Dechert LLP