Public Policy

California Court of Appeal Rules that State Law Claims for Alleged Misuse of the Term 'Organic' on Food Products Are Preempted by Federal Law

In a case of first impression, and with enormous national implications for the food industry, on December 23, 2013, the California Court of Appeal, Second Appellate District, ruled that state law consumer actions challenging certified organic growers’ labeling of food products as “organic” are preempted by federal law, and cannot be maintained.

In Quesada v. HerbThyme Farms, Inc., the plaintiff brought a class action lawsuit alleging that the defendant mixed conventional herbs with organic herbs, and then improperly labeled and sold the mixture as “organic.” The plaintiff alleged that this violated California’s false advertising laws and unfair competition laws, as well as, the Consumer Legal Remedies Act. Though the defendant – a large grower and marketer of herb products – adamantly denied any wrongdoing, defendant argued that such state law claims are preempted in any event by the federal Organic Foods Production Act of 1990, found at 7 U.S.C. §6501, et seq. (“OFPA”) [enhanced version available to subscribers].

Using a baseball analogy, the defendant argued that the OFPA mandates that there be one umpire on the question of whether food products are organic – namely the USDA or its state designee – and that the USDA alone may define the strike zone in which such “organic” designation may fall. The defendant argued that if individual consumers could second-guess the USDA’s “organic” call through state law consumer actions, industry players would hesitate stepping up to the plate, and the purpose of the OFPA – attaining a vibrant organic industry in which producers and consumers could rely on a nationwide unifying “organic” standard – would be defeated. In effect, the plaintiff sought to replace the OFPA and its implementing regulations, the National Organic Program (“NOP”), with a reasonable consumer standard, and sought to replace the federal umpire with a California state court jury or juries, comprised of individual consumers. Defendant argued that this would eliminate the certainty on which industry players and consumers rely, and on which the industry is founded. HerbThyme argued that OFPA was designed to grant the USDA or its state delegate sole and exclusive authority to regulate such matters, without risk of being second guessed in state courts, by state juries. The trial court agreed, and granted defendant’s motion for judgment on the pleadings. Plaintiff appealed.

After full briefing to the Court of Appeal, extended oral argument in April 2013 and then supplemental briefing in June 2013, the matter was taken under submission. On December 23, 2013, the California Court of Appeal affirmed the trial court’s judgment, and issued a broad decision with sweeping consequences for the organic food industry and the consumers who purchase and enjoy such products. The Court of Appeal ruled that “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 court reasoned that “[t]o hold otherwise might lead to the incongruous result in which a state court action might result in a finding that the certified grower mislabeled its product as ‘organic,’ but the certified grower’s federal certification had not been revoked or suspended. Such a result would ‘come[] at the cost of the diminution of consistent standards.’” It concluded that “a private right of action under the unfair competition law … would conflict with the clear congressional intent to preclude private enforcement of the national organic standards. Any such action would interfere with the exclusive federal and state government enforcement. Limiting private enforcement furthers the congressional purpose and objective to nationalize organic labeling standards and to avoid the inevitable divergence of applicable state laws and enforcement strategies.” “In sum, we conclude that Quesada’s state consumer lawsuit is preempted by Congress’s mandate precluding private enforcement of the national organic standards to ensure national consistency in the production and labeling of agricultural products as ‘organic.’” Quesada v. HerbThyme Farms, Inc. (December 23, 2013, Case No. B239602) (Certified For Publication) [enhanced version available to subscribers].

HerbThyme Farms, Inc. is represented by Mark D. Kemple (Shareholder, Los Angeles) and Angela L. Diesch (Associate, Sacramento) of GreenbergTraurig LLP.

This GT Alert was prepared by Mark D. Kemple. Questions about this information can be directed to:
>  Mark D. Kemple | 310.586.7864 |
>  Angela Diesch | 916.442.1111 |
>  Or your Greenberg Traurig attorney

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