In December, the California Supreme Court held that a challenge to a farm's labeling of its herbs as "organic" under state false advertising laws is not preempted by the federal Organic Foods Production Act of 1990 ("Organic Foods Act").
Although the Defendant, Herb Thyme Farms, Inc., typically used conventional herb-growing methods, one of its farms used organic processes and had been certified as an organic producer. In distributing and marketing its herbs, Herb Thyme brought its conventionally grown and organic herbs to the same packing and labeling facility, processed them together, and sold blended conventional and organic herbs under the same "Fresh Organic" label and packaging. Herb Thyme also allegedly packaged and labeled some herbs that were entirely conventionally grown as "organic".
Plaintiff Michelle Quesada claimed that she purchased the "Fresh Organic" herbs at a premium based on her mistaken belief that they were 100% organic. She brought a class action false advertising case against Herb Thyme based on its alleged deceptive labeling.
Herb Thyme sought judgment on the pleadings based on federal preemption, arguing that the Organic Foods Act gave the United States Department of Agriculture exclusive authority to regulate the labeling and marketing of organic products. The trial court agreed and entered judgment for Herb Thyme. The Court of Appeal affirmed because, although it disagreed with the trial court's finding of express preemption, it agreed Ms. Quesada's state false advertising suit was impliedly preempted by the Organic Foods Act.
The California Supreme Court reversed. Herb Thyme argued that the Organic Foods Act expressly preempts a suit under state consumer laws because it comprehensively displaces state remedies and enforcement procedures. The California Supreme Court disagreed, holding that "the act's express preemptive effect is substantially narrower and does not extend to the claims here."
The Court explained that the Act expressly displaces state law in only two regards: first, by setting aside existing state standards for what it means to produce something organically; and second, by federalizing the process by which growers can demonstrate that their production methods comply with the federal standard for producing something organic. The Court noted that the Act contains no such language of exclusivity governing sanctions for misusing an "organic" label. The Act's silence on whether consumer protection lawsuits can be used to enforce these regulations led the Court to find no express preemption. The Court also noted that the Eighth Circuit and California federal district courts have similarly held that organic labeling claims are not expressly preempted by the Organic Foods Act.
The Court also rejected Herb Thyme's implied preemption theory, holding that "[f]ar from posing an obstacle, . . . claims such as these affirmatively further the purposes of the act. Accordingly, they are not impliedly preempted." Specifically, the Court noted that consumer protection and the sale of food products in particular have always been considered a matter of local concern and have fallen within state control. As a result, the Court reasoned, in the context of consumer protection laws related to food labeling, the presumption against implied preemption "applies with particular force." Since the Act is silent on the matter of state common law and statutory remedies for fraud and deception, and since the Act itself provides no private right of action itself for instances of mislabeling products "organic," the Court reasoned that it would be "odd" and "strange" if Congress intended to override existing state remedies. To the contrary, the Court found that the availability of state claims for prosecutors or consumers serves Congress's goals of "deter[ing] mislabeling and enhance[ing] consumer confidence," and thus such claims were not preempted.
Watch this Space for a possible cert. petition.
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