Ninth Circuit Allows State Law Claims to Survive in Mislabeling Class Action

Preemption is familiar battleground for class-action litigants prosecuting or defending product mislabeling claims concerning the labels of federally regulated products. Plaintiffs asserting state law mislabeling claims must contend with the fact that federal laws often expressly preempt state law claims out of a desire to prevent states from imposing requirements different from or stricter than those found in federal statutes or regulations.

Recently, the Ninth Circuit Court of Appeals analyzed the issue of federal preemption in a case involving the labeling of poultry products. In the case of Cohen v. ConAgra Brands, the plaintiff filed a putative class-action lawsuit alleging that that ConAgra’s “natural” and “preservative-free” claims on its frozen chicken product labels and website advertising were false and misleading under California state law.

In his complaint, the plaintiff alleged that ConAgra had been using synthetic ingredients in its products, despite claims to the contrary on its labels and website. This practice, the complaint alleged, ran afoul of California state law. A federal district court judge dismissed the case, holding that the plaintiff’s claims were preempted by the Poultry Products Inspection Act, which preempts state law claims challenging the Department of Agriculture’s application of federal labeling standards for poultry products. Specifically, the court held that the DOA’s Food Safety and Inspection Service had approved the very statements being challenged on ConAgra’s poultry labels and advertising. The plaintiff appealed the ruling to the Ninth Circuit Court of Appeals.

On appeal, the Ninth Circuit agreed with ConAgra that if the “evidence shows that ConAgra’s label was approved by [the Food Safety and Inspection Service], then plaintiff’s claims are preempted.” However, the Court noted that the record lacked any evidence regarding whether the ConAgra label at issue was actually reviewed and approved by the Food Safety and Inspection Service. Consequently, it remanded the claim for further development of the record on this point.

Importantly for the plaintiff’s class action, however, the Court held that the plaintiff’s false and misleading advertising claim concerning statements made in ConAgra’s website advertisements could proceed. The Court cited multiple bases for its conclusion. First, it noted that the claims concerning statements on ConAgra’s website were based on different language and representations than those contained on the product label. Second, the Court noted that the Food Safety and Inspection Service does not review website statements. Thus, it could not have approved the statements in question. Accordingly, the Court concluded that any review by the Food Safety and Inspection Service of the ConAgra label could not serve as a basis for preemption of the website claims.

While it remains to be seen the full effect of the ruling but it does signal a potential avenue for avoiding federal preemption. Plaintiffs may find that claims involving statements materially different than those found on otherwise federally compliant product labels could serve as a basis for false or misleading advertising claims under state law. Additionally, the Court’s ruling may prove to impact online advertising strategies for food products moving forward.

The Court’s full opinion is available here.

We will continue to monitor and write about developments in this and other product mislabeling cases.

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