In 2016, class-action lawsuits alleging that a processed food product or its labeling violated state consumer-protection laws continued to clog the federal courts, especially in California. The number of new food-related consumer class actions filed last year nearly equaled the number filed in 2015, according to a report in Food Navigator USA. It’s unclear whether these trends will hold in 2017, but there is one set of blatantly frivolous claims that should disappear this year: those that seek judicial regulation of products that contain partially hydrogenated oil (PHO), the main source of trans fat. A December 13, 2016 Southern District of California decision should frustrate such claims in the short term, and a forthcoming US Court of Appeals for the Ninth Circuit decision in a pending case may (and should) end them permanently.
For the last several years, one law firm, The Weston Firm, has filed scores of class-action lawsuits on behalf of consumers aimed, as one judge put it, at “eradicat[ing] artificial trans-fat from foods.” The lawsuits bear the hallmarks of lawyer-driven litigation, including cookie-cutter complaints and repeat plaintiffs. For instance, just two class representatives, Victor Guttmann and Shavonda Hawkins, have filed 8 trans-fat class actions. Their allegations that products with trace amounts of PHO are mislabeled “No Trans Fat” or “0 Grams Trans Fat” have failed because Food and Drug Administration (FDA) regulations expressly permit such claims. Courts have also consistently dismissed a second set of claims—that food processors’ use of PHO is unlawful under California’s Unfair Competition Act (UCA) or breaches warranties.
Standing squarely in the way of these “use” claims are a regulatory determination on PHO by FDA and a provision in the federal Consolidated Appropriations Act of 2016 clarifying the impact of that FDA action.
On June 7, 2015, FDA determined that scientific evidence no longer supported a “Generally Recognized as Safe” (GRAS) designation for PHO and thus after June 18, 2018, food manufacturers would have to petition FDA for approval of PHO’s use. The wording of FDA’s declaration—in particular its failure to emphasize that non-GRAS does not equal “unsafe”—led WLF to warn in a June 18, 2015 WLF Legal Pulse post that the agency’s action could inspire a PHO-litigation feeding frenzy. Many in Congress shared our concern. Hence, language was added to the 2016 appropriations bill, passed on December 18, 2015, saying that products sold prior to June 2018 are neither unsafe nor adulterated under federal law for containing PHO.
Southern District of California Judge John Houston handed The Weston Firm its latest PHO “use”-claim defeat in one of Hawkins’s suits, Hawkins v. Kellogg Company. Judge Houston’s December 13, 2016 ruling echoed his November 8, 2016 order in another Hawkins/Weston Firm suit, Hawkins v. AdvancePierre Foods. Just as Judge Houston ruled in that case, he held that Hawkins could not allege that Kellogg’s use of PHO is “unlawful” under UCA § 17200. He reasoned that FDA’s final determination, bolstered by the appropriations bill language, means that PHO use is lawful until June 2018.
As for Hawkins’s other state-law claims, Judge Houston held that the remedy Hawkins seeks conflicts with federal law, and is thus preempted. Judge Houston pointedly stated that Hawkins’s action to make PHO use under California law “‘immediately unlawful’ … is one of the frivolous lawsuits that Congress meant to preclude until 2018.”
Yet another Weston Firm/Hawkins case, Hawkins v. The Kroger Co., is currently on appeal to the Ninth Circuit. Hawkins claimed Kroger’s mislabeling of breadcrumbs as containing “0g Trans Fat” and its unlawful use of PHO caused her physical and financial harm. Northern District of California Judge Jeffrey Miller held Hawkins could not establish standing to sue and dismissed the suit in March, 2016. Hawkins seeks reversal of the trial court’s standing conclusion and reasserts her mislabeling and unlawful-use claims. In its November 16, 2016 answering brief, Kroger asks the Ninth Circuit to affirm Judge Miller, and in the process to rule that Hawkins’s state-law claims are meritless.
The Ninth Circuit takes an especially plodding approach to hearing arguments and issuing decisions. That has held true for class actions involving food ingredients and labeling, an area where the lower courts are in desperate need of appellate court guidance. Even worse, when the Ninth Circuit has gotten around to ruling on food cases, it has often released short “unpublished,” i.e. non-precedential, decisions.
Hawkins v. The Kroger Co. poses an issue of first impression for the Ninth Circuit, but certainly not one where the law is unclear or the outcome uncertain, especially with regard to the unlawful-use claim. The lower courts have unanimously held such claims lack merit. The Ninth Circuit can and should release a published decision that affirms Judge Miller’s standing determination, and does so in such a way that clarifies federal preemption of PHO-related mislabeling and unlawful-use claims.
A definitive, clear Ninth Circuit decision this year in Hawkins would remind the Food Court Bar that Congress and federal regulators are far better positioned to set rules for food products sold in a national marketplace than plaintiffs’ lawyers, judges, or juries.
Also published by Forbes.com on WLF’s contributor page.