With cool and brisk days soon approaching, a warm bowl of oatmeal seems like the perfect breakfast choice – but not so much for a group of consumers allegedly disappointed with Quaker’s “maple” flavored oatmeal for its lack of maple syrup. This month, a federal court in California dismissed a proposed class action against Quaker Oats Company based on federal preemption. See In re Quaker Oats Maple & Brown Sugar Instant Oatmeal Litigation opinion.
The oatmeal at issue is Quaker’s “Maple and Brown Sugar” flavored oatmeal, which was introduced in the 1970’s. Maple syrup comes from the sap of maple trees through a process of drilling and heating. Plaintiffs, consumers from states throughout the United States, claimed that the oatmeal’s label states in bold type “Quaker Instant Oatmeal, Maple & Brown Sugar” and includes a picture of a glass pitcher of maple syrup. Plaintiffs alleged that these representations convey to consumers that the oatmeal contains maple syrup, which allowed the oatmeal to “command a premium in the marketplace,” when it really did not. Plaintiffs’ lawsuit alleged claims for various state consumer protection laws, misrepresentation, false advertising, breach of express warranty, unjust enrichment, and requested injunctive relief.
In response, Quaker argued that Plaintiffs’ claims were preempted by the federal Food, Drug, and Cosmetic Act (“FDCA”) and Nutritional Labeling and Education Act (“NLEA”), which preempts any state law claim that would impose labeling requirements “not identical” to the requirements imposed by the FDA. Congress enacted the FDCA as a “comprehensive regulatory scheme of branding and labeling of food products.” Congress then passed the NLEA, amending the FDCA in order to establish “uniform food labeling requirements.” The NLEA includes an express preemption provision.
At the outset, the Court addressed two threshold matters. First, Plaintiffs argued that the NLEA’s preemption provision did not apply because the provision specifically exempts state laws that are “applicable to maple syrup.” However, when analyzing the exceptions for maple syrup, the Court concluded that the exceptions “were implemented to enable states… to set standards for what can be sold as maple syrup” not to “permit any claim relating to maple syrup.” Second, the Court addressed whether to consider the preemptive effect of federal flavoring regulations or sweetener regulations. On this point, the Court concluded that Plaintiffs were treating maple as a flavor, not a sweetener, since, among other things, Plaintiffs compared the “Maple & Brown Sugar” products with the “Apple and Cinnamon” ones, which are clearly all “flavors.”
As for preemption, the Court held that Plaintiffs’ lawsuit sought “to enjoin exactly what the federal law expressly permits” and thus, their claims were preempted. The Court explained that Plaintiffs sought to prohibit Quaker from labeling its oatmeal with the flavor name “Maple and Brown Sugar” and an image of a glass pitcher of maple syrup on the basis that the oatmeal does not contain maple syrup. However, federal law expressly permits labeling to describe “the primary recognizable flavors, by word, or vignette” even if the product “contains no such ingredient.” This is exactly what Quaker did. Its oatmeal described the primary recognizable flavor – maple – both by word and by the image of the pitcher of syrup. The Court found that Quaker was permitted to do this so long as the flavor was properly labeled as “natural” or “artificially” flavored, which Quaker did.
In response, Plaintiffs argued that the FDCA and state laws contain identical prohibitions on false or misleading labeling. The Court, however, explained that it did not find that the state statutes themselves were preempted, but that their application to Quaker oatmeal was preempted because it attempted to place requirements on Quaker that went beyond the requirements of the FDCA. While the Court found that any misrepresentation or false advertising claim premised on federal compliant “flavor” labeling would be preempted, the Court noted that maple as a “sweetener” could “possibly avoid preemption” if successfully pled.
The Court dismissed Plaintiffs’ other claims as well. Specifically, the Court dismissed Plaintiffs’ breach of warranty claim on the basis that labels that only indicate flavor, rather than composition, cannot serve as the basis for a breach of express warranty claim. In addition, the Court dismissed Plaintiffs’ claim for unjust enrichment because it is not an independent cause of action and no viable underlying claim existed. Lastly, the Court found that Plaintiffs lacked standing to bring a claim for injunctive relief because such a claim depends on whether the consumer is “likely to suffer future injury” from the challenged product. Since Plaintiffs’ suit never alleged that they intended to purchase Maple oatmeal again, the Court found that Plaintiffs lacked standing for injunctive relief. The Court noted, however, that under its current law, it is possible for plaintiffs in consumer misrepresentation cases to seek injunctive relief if they allege that they intend to purchase the product at issue in the future.
This decision is not only a successful dismissal for Quaker, but it can also serve as a roadmap for other companies in defending against similar consumer class actions. With respect to food labeling specifically, preemption is one defense that should always be considered. Indeed, the Court highlighted the rationale for preemption in this field, as articulated by Judge Posner: “It is easy to see why Congress would not wait to allow states to impose disclosure requirements of their own on packaged food products, most of which are sold nationwide. Manufacturers might have to print 50 different labels, driving consumers who buy food products in more than one state crazy.”
We will continue to monitor this case to see if Plaintiffs attempt to re-plead, taking the Court’s roadmap into account.