Thursday, January 02, 2014

Claims relating to organic content completely preempted

Quesada v. Herb Thyme Farms, Inc., --- Cal. Rptr. 3d ----, No. B239602, 2013 WL 6730808 (Ct. App. Dec. 23, 2013)

The court found that the federal Organic Foods Production Act of 1990 preempts state consumer lawsuits alleging violations of OFPA and California’s federally approved state organic program (SOP) (codified under the California Organic Products Act of 2003, COPA). “Congress made clear its intention to preclude private enforcement through state consumer lawsuits in order to achieve its objective of establishing a national standard for the use of ‘organic’ and ‘USDA Organic’ in labeling agricultural products.” This contrasts with other federal schemes where Congress didn’t intend to alter citizens’ ability to file unfair competition claims or other claims vased on violations of identical state laws. Instead, Congress mandated federal oversight of state organic programs “to ensure consistent federal and state government enforcement for violations of the Act.” COPA’s remedial scheme doesn’t include private enforcement.  Thus, conflict preemption applied; consumer lawsuits based on COPA or OFPA violations “would frustrate the congressional purpose of exclusive federal and state government prosecution and erode the enforcement methods by which the Act was designed to create a national organic standard.”

Herb Thyme has federal approval to label organically grown herbs as USDA Organic, but allegedly mislabeled products that contained a mix of organically and conventionally grown herbs with “Fresh Organic” and “USDA Organic” labels. Quesada brought the usual California claims.

The court of appeals noted the presumption against preemption of laws operating in traditional state domains. The presumption applied with particular force to consumer protection laws.  Moreover, the express preemption in OFPA was directed at state organic certification laws, not state consumer lawsuits.  This express preemption supported the inference that Congress didn’t intend to preempt other claims, but didn’t require that conclusion.

The court followed the 8th Circuit’s Aurora Dairy case, which found that consumer protection claims against a certified milk producer for mislabeling non-organic milk as organic were impliedly preempted.  Given the certification, the producer was authorized to label its products as organic. Uniform national standards would be undermined if different court systems adopted possibly conflicting interpretations of the same provisions of OFPA.  “Thus, state consumer law claims against a certified organic producer seeking to hold it accountable for representing its products as organic when in fact the products were not, are preempted.”  The allegations here, if found to be true by the certification agent, would have precluded certification; thus certification and compliance are interrelated.  There should be no situation in which a state court could find a certified grower to be mislabeling its product as organic when the grower’s certification wasn’t revoked or suspended.  Although Aurora Dairy didn’t find all state consumer claims preempted, in that case the facts necessary to support the claims (e.g., “our milk comes from healthy cows”) had no bearing on whether the product met the organic standard.  (This isn’t actually true as stated, but on the other hand the facts that would prove/disprove the claim would be the same even if OFPA didn’t exist, unlike certification-related claims.)

Quesada argued that the fact that state law was identical to federal law saved her claims, because no federal law as such was implicated, citing Farm Raised Salmon Cases.  Farm Raised Salmon rejected the claim that, because there was no private cause of action for violation of the FDCA, federal law impliedly barred consumer suits based on identical state laws.  With the FDCA, Congress impliedly authorized identical state laws, including an express savings clause in an uncodified provision of the NLEA, and also the legislative history indicated the importance of state enforcement of parallel state laws.  With OPFA, the coordinated state-federal regulatory scheme, the legislative history, and congressional intent all distinguished this law from the FDCA.  Under COPA, California’s SOP is the national organic program, administered by the state.  It’s not a separate regime.  Allowing states that chose to have their own SOPs to privately enforce national standards could lead to conflicting interpretations of the national standards.   Plus, the legislative history referred to enforcement by the feds, relevant state officials, and certifying agents; it didn’t include reference to private enforcement, as the FDCA legislative history did.  Also, barring private claims “furthers the congressional purpose and objective to nationalize organic labeling standards and to avoid the inevitable divergence of applicable state laws and enforcement strategies.”  This would conflict with Congress’s purpose of establishing national standards.  Though Jones v. ConAgra Foods, Inc., 912 F. Supp. 2d 889 (N.D. Cal. 2012), reached the opposite conclusion, the court wasn’t bound by federal district court decisions.

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