A January 9, 2018 WLF Legal Pulse post applauded a federal district court’s textbook application of implied-preemption analysis in dismissing a consumer-protection suit that alleged mislabeling of an organic infant formula. A recent decision of the U.S. Court of Appeals for the Second Circuit in Marentette, et al. v. Abbott Laboratories, Inc. similarly utilized implied preemption to reject a putative class action presenting nearly identical claims involving another brand of organic infant formula. The decision should put an end to plaintiffs’ use of state consumer-protection suits to regulate products bearing the U.S. Department of Agriculture’s (USDA) “Organic” symbol.
The plaintiffs claimed that Abbott Labs violated California and New York consumer-protection statutes and common-law duties by labeling their Similac brand infant formula “organic.” The complaint alleged that the formula’s liquid and powder versions contained 16 ingredients that rendered them non-organic under the Organic Food Production Act (OFPA), which is implemented by USDA. In essence, the plaintiffs were second-guessing USDA’s decision on organic certification.
The district court agreed with Abbott Labs that the plaintiffs’ state-law claims were an obstacle to the regulatory uniformity Congress intended when it passed the OFPA, and thus were preempted under the Supremacy Clause. The Second Circuit, in an opinion by Eastern District of New York Judge Brian M. Cogan, who was sitting on the appellate panel by designation, affirmed the lower court’s ruling.
The OFPA established a specific process for USDA organic certification. Food producers must first design a plan for pursuing certification, which must detail the ingredients and the manufacturing process that will be utlized. A certifying agent reviews the plan and follows up approval with an on-site inspection. USDA retains full oversight, and can suspend negligent certifying agents, and may impose penalties on fraudulent or non-compliant producers.
At the Second Circuit panel’s invitation, USDA filed an amicus brief confirming that certifying agents review the proposed organic product’s ingredients, and that certification is meant to signify that the product complies with the OFPA. In light of that explanation, the court concluded, “There is simply no way to rule in [the plaintiffs’] favor without contradicting the certification decision, and, through it, the certification scheme that Congress enacted in the OFPA.”
Although the plaintiffs tried to distinguish their state-law claim that Similac contained non-compliant ingredients under the OFPA from a claim that Abbott Labs falsely obtained organic certification, the court saw the claims as one in the same.The plaintiffs also asserted that the suit was challenging facts not directly bearing upon USDA’s certification. In particular they relied on an Eighth Circuit opinion involving organic milk that held OFPA did not preempt claims that the defendant falsely advertised the dairy farm’s treatment of cows because those statements were “independent of the decision to certify the milk.” But the Second Circuit found that opinion inapplicable because the plaintiffs in Marentette failed to allege that Abbott Labs deceived the USDA certifying agent, so its suit simply could not fit into the narrow window its sister circuit left open. Ironically, that Eighth Circuit decision also held that plaintiffs’ claims related directly to USDA certification were preempted.
The plaintiffs essentially sealed their fate when, at a hearing before the district court, they asked the court to order Abbott Labs to add a statement to the Similac label saying that the infant formula contained non-organic ingredients. Yet, the National Organic Program that OFPA created could not be truly national if private plaintiffs could successfully pursue such a contradictory remedy under state law.
Finally, just as the plaintiffs asserted in the Hain Celestial Group, Inc. case discussed in our January post, the plaintiffs in Marentette claimed their suit was a parallel effort to vindicate, not undermine, federal enforcement. That, the Second Circuit retorted bluntly, “is not how preemption analysis works.” The OFPA clearly reflects the purposes and objectives of Congress to create a single, national organic-certification standard to facilitate interstate commerce. State-law claims that force courts to “look behind” USDA’s certification of a product “are an obstacle to the federal scheme,” the court explained, “even if [the plaintiffs’] claims were meritorious.”
Marentette, together with the Eighth Circuit’s decision and trial court rulings like in Hain Celestial Group, should send a clear signal to consumer-class-action lawyers that their “product line” of lawsuits claiming improper organic certification should be permanently recalled and shelved.
Also published by Forbes.com on WLF’s contributor page.