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December 19, 2012

State law claims for misleading labeling of food products were not preempted by federal law

By Michelle L. Oxman, JD, LLM

State law claims alleging that labels on PAM® cooking spray, Hunt's® canned tomato products, and Swiss Miss® cocoa, manufactured by ConAgra Foods, Inc. (ConAgra), were deceptive or misleading were not preempted by the federal Organic Food Products Act, the National Labeling and Education Act, or the Food, Drug and Cosmetic Act (FD&C Act) because the California statutes did not impose requirements that conflicted with federal law (Jones v ConAgra Foods, Inc., December 17, 2012, Breyer, C). There was no need for the court to abstain from exercising jurisdiction under the doctrine of primary jurisdiction because the agency's expertise was not needed for the court to determine whether statements on the labels and the company's website were misleading or deceptive to the reasonable consumer. Most of the allegations of fraud were sufficiently specific to meet the requirements of the Federal Rules of Civil Procedure.

The labels. The plaintiffs alleged that the labels on ConAgra's products were misleading because: (1) products labeled as organic contained ingredients that were disqualifying under the Organic Food Products Act and related regulations; (2) labels stating that products were "all natural" or 100 percent natural did not disclose the artificial ingredients in the products, including propellant in PAM® cooking spray; (3) labels did not use the common or usual names for ingredients as required by 21 U.S.C. sec. 343(i)(2) and Cal. Health & Safety Code sec. 110725(a); (4) labels did not disclose that rosemary extract, calcium chloride, and citric acid were used as preservatives, as required by 21 C.F.R. sec. 101.22 and Cal. Health & Safety Code sec. 110740; and (5) the labels and information on the company website made health claims for which the products did not qualify because they did not contain sufficient quantities of the relevant ingredient.

Preemption. ConAgra argued that the state law claims were preempted by the federal statutes and regulations. Because neither the statutes nor the regulations specified that state law was preempted, the court had to determine whether preemption was implied. The claims under the California Health and Safety Code were not preempted because the requirements of state law did not conflict with federal law. In fact, the state statutes both expressly incorporated the federal requirements, and they did not impose any additional obligations. Although the FD&C Act did not provide for a private right to sue for violations, in a 1995 Final rule, the FDA appeared to have approved suits under state law as long as the obligations under state law are the same as federal law. Therefore, the consumers' claims under the state statutes and state tort law were not preempted.

Primary jurisdiction. ConAgra also argued that the federal court should abstain from exercising jurisdiction because the FDA's expertise was needed to resolve the technical and policy questions about whether various ingredients were natural or preservatives. However, the court decided that the issues before it depended on whether the labels would be misleading to a reasonable consumer, not the chemical composition of the ingredients. Therefore, the doctrine of primary jurisdiction did not apply.

Consumers' reliance on the statements. ConAgra also argued that its claims on the labels that products were natural did not mislead consumers because the unnatural ingredients were disclosed in the list of ingredients. However, the court rejected that argument because the plaintiffs claimed that the list of ingredients was misleading, and consumers were not required to confirm the manufacturer's claims by analyzing the ingredient list.

False or misleading statements. ConAgra claimed that the complaint did not meet the specificity requirements for allegations of fraud. The court reviewed the elements of fraud that must be specifically alleged: what specific statements were made, who made them, when and where, and why they were false or misleading. The requirements were met because the complaint pointed to particular statements on the labels made by ConAgra during a specified period beginning in 2008 and that the plaintiffs purchased the products during the specified time in reliance on the statements. The allegations concerning the website were less detailed, so that count was dismissed and the plaintiffs were allowed to amend their complaint. ConAgra had recently changed its label to specify that one ingredient was a preservative, so the plaintiffs must allege that they purchased the products before the label was changed. Similarly, the labels for a variety of canned tomato products did not all contain the same statements or artificial ingredients; the plaintiffs must amend their complaint to specify which products they bought and the false statements relating to each product.

The case number is C 12-01633 CRB.

Ben F. Pierce Gore (Pratt and Associates) for Levi Jones. Robert B. Hawk (Hogan Lovells US LLP) for ConAgra Foods, Inc.

MainStory: TopStory PreemptionNews MisbrandingNews CaliforniaNews

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