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February 08, 2016 Articles

Federal Preemption and "All Natural" Food and Beverage Cases

By Shagha Tousi

Products liability defense attorneys, particularly in the drug and device arena, have long been familiar with the doctrine of federal preemption and have invoked it to defeat state law claims that sought to impose requirements on drug and device manufacturers that differed from or added to the requirements imposed by the Food and Drug Administration (FDA). Federal preemption in this area has disposed of not just traditional design defect claims, but also claims based on the labeling and warranties involved with a particular product.

Preemption in Drug and Device Cases
In 2001, the United States Supreme Court recognized in Buckman Co. v. Plaintiff's Legal Committee, 531 U.S. 341, 353 (2001), that allowing state law claims that attempted to circumvent federal preemption, such as fraud-on-the-FDA claims, would call into question, and in fact conflict with, the complex regulatory scheme established by the FDA. The Court held therefore that because the federal statutory scheme "amply empowers the FDA to punish and deter fraud against the Administration, and that this authority is used by the Administration to achieve a somewhat delicate balance of statutory objectives," state law claims that tread into this same territory are impliedly preempted by the statutory scheme underlying the FDA's authority. Buckman, 531 U.S. at 348.

In 2008, the United States Supreme Court addressed preemption as to medical devices in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008). The Court held that, with respect to devices that had undergone the FDA's rigorous premarket approval process, state law claims, including claims of design or labeling defects, were preempted by the Medical Device Amendments of 1976, 21 U.S.C. §§ 360 et seq., because such state law claims would impose state requirements that were "different from, or in addition to" the stringent device-specific requirements imposed as part of the FDA's premarket approval process. Riegel, 552 U.S. at 325.

Volumes have been written on the issue of federal preemption with respect to medical devices, discussing the multitude of preemption-related cases in this context. This article is not intended to be a primer on that topic. Rather, the cases cited herein are intended to show the similarities in application of the preemption doctrine in cases involving two different types of products, both regulated by the FDA.

Preemption in Food and Beverage Cases
In recent years the courts have seen a significant rise in labeling-related claims with respect to food and beverage products. Much like in drug and device cases, defendants have found invocation of the doctrine of federal preemption to be generally effective in this wave of litigation. Similar to the Medical Device Amendments of 1976, the Nutrition Labeling and Education Act (NLEA), 21 U.S.C. §§ 341 et seq., contains a provision that expressly preempts state laws addressing certain covered subjects, including food labeling requirements, as follows:

[N]o State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce . . . any requirement for the labeling of food of the type required by [section 343] of this title that is not identical to the requirement of such section.

21 U.S.C. § 343-1(a)(2), (3). Courts have enforced this provision by holding that certain types of state law claims are preempted. As recently as June 2015, the Ninth Circuit affirmed the district court's dismissal of the claims in Brod v. Sioux Honey Ass'n Cooperative, 609 F. App'x 415 (9th Cir. 2015), based on express preemption under section 343-1(a)(3). There, the plaintiff asserted state law breach of warranty claims and various unfair competition claims attacking the labeling on Sioux Honey's packaging. Put simply, the plaintiff claimed that Sioux Honey filtered all-natural pollen out of its Sue Bee honey, and this action (1) rendered the sale of that product as "honey" unlawful under state law, and (2) breached warranties to the plaintiff and others similarly situated. According to the plaintiff, Sioux Honey's failure to disclose its filtering of pollen misled him into buying the product, which he would not have done had he known. In affirming the district court's conclusion that these claims were preempted, the Ninth Circuit cited section 343-1(a)(3) and section 343(i). Section 343(i) provides that, where no standard of identity exists under section 343(g), a food is misbranded unless its label bears "the common or usual name of the food." Relying on previous rulings and findings in the case, the Ninth Circuit concluded that Sue Bee Honey, despite the removal of pollen, is still "honey," as the term is used in common parlance. The Ninth Circuit held that state law claims purporting to require Sue Bee Honey to be labeled as anything other than "honey" were preempted by section 343-1(a)(3).

Note, however, that the preemption under the NLEA has not been applied by the courts to preempt every type of food and beverage labeling claim. In fact, multiple courts have recognized that, when it comes to the regulation of food and beverage labeling, an issue that traditionally has fallen within the province of the states, a presumption against preemption exists. Garcia v. Kashi Co., 43 F. Supp. 3d 1359, 1372 (S.D. Fla. 2014) (citing Irving v. Mazda Motor Corp., 136 F.3d 764, 767 (11th Cir. 1998), and Holk v. Snapple Beverage Corp., 575 F.3d 329, 334–35 (3d Cir. 2009)); Brod v. Sioux Honey Ass'n Coop., 927 F. Supp. 2d 811, 824 (N.D. Cal. 2013), aff'd, 609 F. App'x 415 (9th Cir. 2015).

In particular, these courts have refused to find preempted any type of claim not specifically addressed by sections 341 and 343 of the NLEA. Given the lack of legislation and the FDA's lack of action on "all natural" food labeling claims and the definition of the term "all natural," these types of claims have been a popular choice for plaintiffs' lawyers as a means of avoiding preemption. For example, in Garcia, the Kashi Company, a manufacturer of cereals, snack bars, crackers, and other foods, came under fire for marketing its products as "all natural" despite the presence of certain bioengineered or synthetic ingredients, known as genetically modified organisms (GMOs). 43 F. Supp. 3d at 1367–68. There, the United States District Court for the Southern District of Florida declined to conclude that the plaintiffs' claims were expressly preempted because, while section 341-1(a)(3) in conjunction with section 343(k) preempted claims invoking the FDA's required disclosures for a food that "bears or contains any artificial flavoring, artificial coloring, or chemical preservative," that did not apply to the plaintiffs' claims against Kashi because their claims centered around whether the label could claim these products are "all natural" given their GMO content. Garcia, 43 F. Supp. 3d at 1372–73.

Kashi also argued implied preemption based on several public statements by the FDA on its interpretation of "natural" labeling claims. The court rejected this argument, relying on a decision from the Third Circuit holding that the informal FDA policy statements are not entitled to preemptive effect. Garcia, 43 F. Supp. 3d at 1373–74 (citing Holk, 575 F.3d at 339–41). Thus, because the FDA has deferred taking formal action regarding the regulation of "all natural" claims, it was not impossible for a food manufacturer like Kashi to comply with both federal and state law regarding the use of the term "all natural." As a result, implied preemption did not apply.

Similarly, in June, the United States District Court for the Western District of Arkansas declined to find preemption in Gabriele v. ConAgra Foods, Inc., No. 5:14-CV-05183, slip op. at 5(W.D. Ark. June 25, 2015). Gabriele, on behalf of himself and others similarly situated, challenged the use of the terms "100% natural" and "free of artificial ingredients and preservatives" by ConAgra to describe its Hunt's tomato products because, as the plaintiff claimed, these products contained artificially derived citric acid or calcium chloride. Id. at 3. ConAgra provided the court with a number of materials from the FDA regarding its position on these ingredients, including a letter from the FDA to ConAgra's subsidiary stating its position that the "all natural" label could be used if the citric acid was naturally derived. ConAgra also provided an affidavit from another case attesting to the fact that these ingredients in the tomato products had been naturally derived. Yet the court concluded that none of these materials could be given preemptive effect in light of the FDA's lack of formal action on the topic of "all natural" claims. The court's reasoning here was based in part on the fact that the issues were being presented on a motion for judgment on the pleadings. As the court noted, it "may not look to documents outside of the Complaint at this stage in the litigation, without treating the motion as one for summary judgment. The appropriate time to address these affidavits is on summary judgment." Id. at 4–5 (citation omitted). Thus, the plaintiff's state law claims were not preempted.

These cases indicate that until the FDA acts more definitively on "all natural" labeling claims, at least some federal courts will be reluctant to find claims attacking food and beverage "all natural" labels as preempted by the FDA's regulatory authority. According to the FDA's website, the FDA "has not developed a definition for use of the term natural or its derivatives. However, the agency has not objected to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances." As highlighted in Garcia, this will take on particular importance as proposed state legislation on labeling requirements for food and beverage products containing GMOs take effect. States including Connecticut, Maine, Vermont, and Massachusetts have proposed, and in some cases enacted, statutes requiring foods and other products to be labeled "Produced with Genetic Engineering" if that food is entirely or partially genetically engineered.  The FDA recently discussed this issue without directly addressing "all natural" labeling in its November 2015 "Guidance for Industry: Voluntary Labeling Indicating Whether Foods Have or Have Not Been Derived from Genetically Engineered Plants." However, absent formal guidance from the FDA on the topic of "all natural" claims, the uncertainty in the courts over the application of the doctrine of federal preemption in this area is likely to continue, if not increase.

Keywords: litigation, products liability, food and beverage products, labeling, federal preemption, Nutrition Labeling and Education Act, all natural, genetic engineering, GMOs

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