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From Health Law Daily, April 15, 2019

No preemption where California’s Sherman Law identical to FDC Act

By Jeffrey H. Brochin, J.D.

Court could not find preemption where claims were premised on theory that the words "artificially flavored" were omitted from the front label of beverage.

A federal district court in California has denied the motions to dismiss filed by Talking Rain Beverage Company, Inc. (Talking Rain), ruling that because California’s Sherman Law was identical to the federal Food, Drug and Cosmetic Act (FDC Act), it was not preempted by the federal law. Furthermore, because the claims were premised on the theory that the words "artificially flavored" were omitted from the front label of the Sparkling Ice beverages, the court could not find the claims were preempted (Augustine v.Talking Rain Beverage Co., Inc., April 12, 2019, 2018, Bencivengo, C.).

Nature of d-1 malic acid. Two consumers of Talking Rain’s "Sparkling Ice" beverages filed a putative class action seeking damages and equitable relief for the alleged false and misleading labeling on the beverage products. Their complaint alleged violations of California’s False Advertising Law (FAL) Business & Professions Code § 17500, et seq.; the Unfair Competition Law, Business & Professions Code § 17200, et seq. (UCL); and California’s Consumers Legal Remedies Act, California Civil Code § 1750, et seq. (CLRA) among other claims, based on the products are labeled as if they are flavored only with natural ingredients when they in fact contain an undisclosed artificial flavor, d-1-malic acid.

The consumers contended that they relied on the labeling and believed they were buying all-natural products with natural flavoring ingredients, instead of the artificially flavored sparkling water they purchased. The company moved to dismiss citing federal preemption of the state laws.

Preemption issues. The company asserted that the consumers were seeking to impose duties on Talking Rain that were different than those imposed by federal law and that therefore, their argument was preempted by federal law, because the state law claims would effectively require Talking Rain to include additional or different information on a federally approved label. However, the consumers countered that all of their claims were based on violations of California’s Sherman Law, which is identical to the FDC Act and therefore not preempted. The court agreed with the consumers and denied the motion to dismiss that was based on the federal preemption argument.

‘Artificial flavoring’ label. The consumers also asserted that Talking Rain improperly omitted the words "artificial flavoring" from the front label, which should have been stated due to the presence of the artificial flavor, d-1-malic acid. Talking Rain argued that this argument was merely conclusory that the malic acid found in the Sparkling Ice beverages was used as an artificial flavor or a characterizing flavor as defined by the regulations. However, the court found that the complaint sufficiently alleged that testing confirmed the presence of the synthetic version of d-1 malic acid, which is an artificial flavoring ingredient used to stimulate, resemble and reinforce the characterizing fruit flavors for the product. The court further found it plausible that the malic acid used in the product was not the natural form of L-malic acid that occurs naturally in various types of fruits and vegetables. Accordingly, the court could not find that theory that the words "artificially flavored" being omitted from the front label of the Sparkling Ice beverages amounted to preemption, and they denied the motion to dismiss based ion that argument.

Based on the foregoing, the court denied the above motions to dismiss as well as seven others, but granted the motion only as to the claims of fraud by omission, negligent misrepresentation, breach of express warranties and breach of implied warranties claims brought on behalf of a nationwide class.

The case is No. 3:18-cv-02576-CAB-BGS.

Attorneys: Michael Houchin (Law Offices of Ronald A. Marron) for Jessica Augustine. Michelle C. Doolin (Cooley LLP) for Talking Rain Beverage Co., Inc.

Companies: Talking Rain Beverage Co., Inc.

MainStory: TopStory CaseDecisions FDCActNews FoodNews LabelingNews PreemptionNews CaliforniaNews

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