June 26, 2013 Articles

It's a Pom Wonderful Life—Or Is It?

By Karen Woodward

In May 2012, the Ninth Circuit issued its decision in Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012). Pom involved claims over the name and labeling of a juice beverage and analyzed the justiciability of false-advertising-and-labeling suits that rely on Food and Drug Administration (FDA) regulations as support for a plaintiff’s claims. The Ninth Circuit’s decision made clear that federal courts should not become involved in interpreting and applying agency regulations, which the court viewed as an affront to Congress’s intent to leave certain matters within the exclusive jurisdiction of federal agencies. The defendants hoped that Pom would preempt subsequent California matters involving FDA-based false-labeling claims, but its reach has not been as broad as anticipated.

Since Pom was decided, there have been 11 California district-court cases referencing the decision. Five of those matters dealt substantively with application of Pom in cases involving food/dietary-supplement-industry products. Although California district courts consistently appear to apply Pom to do away with Food, Drug, and Cosmetic Act  (FDCA) claims under the Lanham Act, state-court false-labeling and -advertising claims typically survive motion practice at the pleadings stage. Pom is typically found inapplicable in instances where FDA regulations regarding the use of certain claims and terms are clear. An abbreviated review of these decisions follows.

In Delacruz v. CytoSport, Inc., 2012 WL 2563857 (N.D. Cal. June 28, 2012), the district court addressed claimed misrepresentations regarding “Muscle Milk” products. The plaintiff’s theory of relief was that the products are represented to be “healthy” when, in fact, they contain unhealthy ingredients or contain certain ingredients in unhealthy amounts.

The defendant argued that plaintiff’s claims referencing FDA regulations were preempted by 21 U.S.C. § 337(a), which provides that all proceedings to enforce, or to restrain violations under the FDCA, “shall be by and in the name of the United States,” except for those actions brought by a state pursuant to subsection (b). In response, the court noted that while this provision preempts private enforcement of FDA regulations, it does not expressly preclude all claims under state law that may involve food product labeling. Id. (citing 21 U.S.C. § 343-1, which authorizes states to establish laws that are “identical to” federal labeling requirements). Furthermore, the court discussed the California Supreme Court’s decision in Farm Raised Salmon Cases, 175 P.3d 1170 (Cal. 2008), which held that section 337 of the FDCA did not impliedly preempt the plaintiffs’ state-law claims, including claims for negligent misrepresentation and Unfair Competition Law (UCL) violations.

In this context, the Delacruz court summarily dismissed the defendant’s reliance on Pom, declining either to dismiss or stay the case on primary-jurisdiction grounds. In doing so, the court held that the FDA’s expertise “is not necessary to determine whether the labels are misleading.” Rather, “[t]he reasonable-consumer determination and other issues involved in Plaintiff’s lawsuit are within the expertise of the courts to resolve.”

In CytoSport, Inc. v. Vital Pharmaceuticals, Inc., 2012 WL 3881599 (E.D. Cal. Sept. 6, 2012), plaintiff CytoSport, Inc. asserted claims against defendant Vital Pharmaceuticals, Inc. (VPX) similar to those alleged in Delacruz. In response, VPX raised counterclaims against CytoSport, alleging, inter alia, claims for alleged violations of the Lanham Act. Specifically, VPX alleged that CytoSport’s use of the term “milk” to refer to a product that contains no milk, as defined by FDA regulations, is deceptive. In support, VPX primarily pointed to a warning letter sent from the FDA to CytoSport describing the FDA’s position that CytoSport’s use of “Muscle Milk” violates 21 U.S.C. § 343(a)(1) because it is false or misleading, and asked the court to accept the FDA’s analysis.

The court stated that “[t]his case is nearly indistinguishable from the situation presented in Pom.” The court reasoned that because the FDA regulates the use of the term “milk” on foods labels, and because the FDA is aware of CytoSport’s labeling and has not acted, VPX’s claims fell entirely under the purview of the FDA, not the district court. Moreover, the court noted that “the fact that the FDA sent a warning letter to CytoSport concerning its labeling does not require a different finding,” as “FDA warning letters are informal and advisory, and do not amount to an FDA action.” Id. (citing Summit Tech., Inc. v. High-Line med. Instruments Co., 922 F. Supp. 299, 306 (C.D. Cal. 1996)).

Therefore, the court held that VPX’s Lanham Act claims are barred by the holding in Pom as the FDA is the entity that must make that determination in the first instance.” Id. (citing Pom, 679 F.3d at 1178). The court also declined to defer consideration of the present motion based on what the FDA may or may not do vis-à-vis use of the term “milk” on food labels, because “the Pom holding is clear that the claims are barred until the FDA issues its decision, not that they are stayed or deferred.”

Finally, with respect to this court’s application of Pom, the court held that VPX’s two state-law claims alleging violations of the UCL and False Advertising Law were not barred by Pom “because the FDA specifically permits states to create labeling requirements that are identical to the FDA’s and establish independent causes of action for those claims.”

In Khasin v. The Hershey Co., 2012 WL 5471153 (N.D. Cal. Nov. 9, 2012), the plaintiff filed a putative class action against Hershey primarily under California law, alleging that Hershey engaged in misleading conduct by making unlawful nutrient-content and health claims relating to several of its products. Citing Pom, Hershey moved to dismiss on the grounds that each of plaintiff’s claims was preempted by the FDCA.

The Khasin court rejected this argument, noting that Pom only recognized preemption of federal Lanham Act claims that require litigation of whether the alleged conduct violated the FDCA. The Khasin court further noted that such claims were not made in the present action, and that Pom remanded the California state-law claims for determination of a standing issue. As to the issue of express preemption, the court found that the FDCA does not preempt state-based consumer-protection claims unless they impose requirements on the defendant that differ from federal requirements. Finding no such imposition, the court refused to conclude that the plaintiff’s claims were expressly preempted.

In Ivie v. Kraft Foods Global, Inc., 2013 WL 685372 (N.D. Cal. Feb. 25, 2013), the plaintiff filed suit alleging a plethora of false-labeling and -advertising violations against a variety of the defendants’ food products. In their motion for judgment on the pleadings, relying on Pom, the defendants argued that the plaintiff’s claims were “mere attempts to privately enforce provisions of the FDCA and NLEA, federal acts whose enforcement is within the express jurisdiction of the FDA.” In reaching its decision, the court engaged in an analysis of the primary-jurisdiction doctrine, Pom, and a recent decision applying Pom to dismiss state-law labeling claims against a cosmetics manufacturer: Astiana v. Hain Celestial Grp., 2012 WL 5873585 (N.D. Cal. Nov. 19, 2012). The court noted that in both Pom and Astiana, the FDA had yet to speak on whether the alleged false-and-misleading-labeling claims violated federal rules. In that context, dismissal of the state-law claims was merited under the primary-jurisdiction doctrine. However, where FDA policy is established, the primary-jurisdiction doctrine is inapplicable because no original interpretation of federal rules is required to determine whether state consumer-protection laws have been violated. In such instances, Pom does not apply and the plaintiffs may proceed with state-law claims that do not impose obligations additional to federal rules.

Lanovaz v. Twinings North America, 2013 WL 675929 (N.D. Cal. Feb. 25, 2013), dealt directly with the issue of whether a true inconsistency was raised between state law and federal claims. Lanovaz involved putative class claims relating to the defendant’s green-tea product, which it had labeled as “a natural source of antioxidants.” The plaintiff’s claims were premised entirely on violations of California, and not federal, statutes. Relying on Pom, the defendant characterized this move in its preliminary motion to dismiss as an indirect effort to obtain redress for a violation of FDA labeling rules.

The district court, however, disagreed, noting that Pom did not hold that state-law claims were preempted, and instead applied a principle of deference to FDA expertise. The issue, instead, was whether the plaintiff was requiring changes to the label that went beyond what was required under federal rules. For instance, the court posited, is the claim, “a natural source of antioxidants” a federally regulated nutrient claim? Finding upon analysis that it was, the court concluded that plaintiff’s state-law claims were viable.

Subsequent district-court cases applying Pom have made it clear that preemption will not be applied to state-law claims unless the plaintiffs’ allegations truly impose requirements that contravene the requirements set forth by federal law. The reported trend in California one year post-Pom is to allow state-law false-labeling and -advertising claims to proceed past the pleadings stage.

Keywords: litigation, mass torts, Pom Wonderful, Delacruz v. Cytosport, false labeling, false advertising, UCL, FAL


Copyright © 2018, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).