July 2, 2024

Ninth Circuit Holds That California Food-Labeling Law Is Not Preempted by Federal Law

"Sherman Law" Incorporates Federal Standards and Provides Private Right of Action
Bar Bites: A Food & Beverage Law Blog
Charles A. Weiss
Bar Bites: A Food & Beverage Blog

In 1990, Congress enacted the Nutrition Labeling and Education Act (NELA) as an amendment to the Food, Drug and Cosmetic Act (FDCA). Among other things, NELA 1) provided for modernization and standardization of the familiar "Nutrition Facts" panel on almost all packaged foods and 2) directed the U.S. Food and Drug Administration (FDA) to adopt regulations governing what the industry refers to as "nutrient descriptor" or "nutrient content" claims. For example, use of the terms "fat free" and "low fat" are governed by 21 C.F.R. § 101.62, which provides in detail the relationships between fat content, serving size and other nutrients that must be satisfied to use these terms.

As relevant to this article, regulations adopted by the FDA under NELA generally prohibit the use of nutrient content claims on foods "intended for use by infants and children less than 2 years of age." 21 C.F.R. § 101.13(b)(3). When adopting this regulation, the FDA pointed to the lack of evidence that restricting or increasing the intake of nutrients in ways accepted as beneficial to adults – such as limiting sodium or increasing fiber – was similarly beneficial to infants and toddlers. Indeed, some nutrients commonly identified as relatively unhealthy for adults, such as cholesterol, were important components of a healthy diet for young children. Thus, concluded the FDA, permitting nutrient content claims on foods for babies could lead consumers to believe that certain foods were good for babies despite the lack of evidence supporting any such conclusion. Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms, 56 Fed. Reg. 60421, 60424 (1991) ("until the agency has information that [adult] dietary patterns are appropriate for children and support adequate growth and development, FDA is proposing … that nutrient content claims may not be made on foods intended specifically for use by infants and toddlers less than 2 years of age").

In furtherance of NELA's goal of national uniformity, the statute included an express preemption of state and local laws imposing labeling requirements on regulated foods that were "not identical to" the federal statute. 21 U.S.C. § 343-1(a). And as with the FDCA generally, NELA is not enforceable by private persons. 21 U.S.C. § 337(a).

Enter California's "Sherman Law," which enacted the FDCA's food labeling requirements, including those added by NELA, as part of state law. Cal. Health & Safety Code § 110100(a) ("All food labeling regulations and any amendments to those regulations adopted pursuant to the federal act, in effect on January 1, 1993, or adopted on or after that date shall be the food labeling regulations of this state."). Given that it incorporates the federal standards verbatim, the California statute does not run afoul of the federal preemption of state or local laws that impose standards "not identical to" the federal statute.

But what of the FDCA's provision that it may be enforced only by the government and not by private individuals – does this mean that the California analog of NELA cannot be enforced by private individuals? Or is California free to open the courthouse doors to private individuals claiming they were harmed by a company's violation of the state statute, as long as they rely purport to rely only on the state statute and not federal law?

Ninth Circuit Rules

In Davidson v. Sprout Foods, Inc., 22-1665 (June 28, 2024), the U.S. Court of Appeals for the Ninth Circuit answered "no" to the first question and "yes" to the second, holding that private enforcement of California's Sherman Law is not preempted. This case was a class action in which the plaintiffs alleged that Sprout's pouched toddler foods bearing nutrient content claims such as "3g of Protein," "5g of Fiber" and "300mg Omega-3 from Chia ALA" were falsely labeled under the Sherman Law because it prohibited nutrient content claims by incorporation of the federal regulation. In part, the plaintiffs alleged that these claims falsely suggested that the products were healthy despite the fact that they contained high amounts of sugar and that sugars in pureed pouched foods contributed to tooth decay. Slip op. at 21. The district court dismissed the claims as preempted by the FDCA.

Because the parties agreed that the Sherman Law claim was not expressly preempted by the FDCA, the question for the Ninth Circuit was whether the state statute was impliedly preempted. In holding that it was not preempted, the court distinguished a line of cases involving other products regulated under the FDCA – i.e., medical devices and drugs – in which state-common-law claims that relied on alleged violations of the FDCA were held to be impliedly preempted. For example, the claims in Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001), rested on allegations that the manufacturer of medical devices had obtained approval by making misrepresentations to the FDA. Id. at 343. In such cases, state-law claims were impliedly preempted "because the duties allegedly violated were duties owed to the federal agency, and the claim was in essence a claim of violation of federal law." Davidson, slip op. at 12. By contrast, cases with claims for violation of state-law duties "that paralleled duties owed under federal law" were not preempted. Id. at 14-15. In the case at bar, the claims ran parallel to the federal requirements but did not arise from duties owed to the FDA.

Observing that the federal statute expressly permitted state laws that imposed obligations identical to those imposed by federal law, the Ninth Circuit wrote that it would be a "strange result" if the federal statute were construed to authorize identical state standards with one hand but deny the ability to enforce them with the other. "There is no reason we can perceive why Congress would permit states to enact particular legislation and then deny enforcement by their citizens." Id. at 14.

Judge Collins dissented from the court's preemption holding, writing separately to explain why, in his view, private enforcement of the Sherman Law labeling standards was preempted by the FDCA. From the line of cases discussed by the panel opinion, the dissent distilled a rule that distinguished between 1) state-law standards with independent content that paralleled the federal requirements (not preempted) and 2) those that "parasitically copied" the federal standard:

Expressed in general terms, the rule that emerges from our precedent is that a private cause of action based on state law with independent substantive content that parallels the FDCA's applicable requirements in a given case (such as, for example, a negligence claim predicated on a duty to warn that matches the FDCA's requirements) is not impliedly preempted, but a private claim based on state law that has no substantive content other than a parasitic copying of the FDCA's requirements is impliedly preempted.

Slip op. at 29 (emphasis in original)

Building on the need for "independent substantive content," the dissent found a distinction between state-law claims for a "traditional common law tort action" that alleged "harm to a patient" and those in which the plaintiff alleged economic harm "because the defendant violated the FDCA." Id. at 38. Here, the "parasitic copying" of the FDCA by the Sherman Law made clear the absence of an independent substantive requirement of state law that ran parallel to the federal standards. Rather, the state-law requirement simply was the federal standard.

Addressing the majority's argument that it would be anomalous if Congress permitted states to adopt labeling requirements that matched federal law but prohibited from them adopting an enforcement mechanism, Judge Collins wrote that there was an "obvious answer," which was enforcement by state authorities as opposed to private persons:

By mirroring the FDCA itself … the "identical" state law could likewise provide for enforcement by state authorities and could perhaps allow those authorities, in such a public suit in state court, to obtain additional remedies (monetary or otherwise) that are not afforded by the FDCA. It can hardly be thought to be "strange" to limit States to using, for the "permitted" identical state laws, only the same public enforcement mechanisms that are permitted by the very federal law they are copying. If that public-enforcement-only policy is sensible for the FDCA, it cannot be dismissed as strange and anomalous for state laws whose substantive provisions must be identical to the FDCA.

Id. at 43 (citation omitted)

Conclusion

It seems unlikely that the Ninth Circuit's decision in this case will be the last word on the issue presented. The court's opinion noted that other district courts in the Ninth Circuit had held opposite the decision of the district court in this case, i.e., held as did the court of appeals here that Sherman Law claims involving food labeling were not preempted. Slip op. at 19. The court did not cite any decisions from other circuits on the same preemption issue, perhaps reflecting the relatively unique scope of California's Sherman Law in adopting the federal standards as a matter of state law and providing a private right of action for purported violations.

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