What's the difference between claiming that a food product is improperly certified as organic and claiming that the producer was properly certified but the product isn't really organic? A unanimous California Supreme Court held in Quesada v. Herb Thyme Farms, Inc. (pdf) that state courts and juries should figure out the answer. That ruling opens the door to state-law actions that challenge food producers' compliance with the federal organic food product certification and labeling scheme, so long as the claims don't take issue with the original certification decision. The decision revived a consumer class action alleging that a food producer—though properly certified to use the "organic" label—intentionally misapplied that label to products containing conventionally produced herbs from one of its noncertified facilities.
Drawing an exquisitely fine line, the California Supreme Court held that preemption extends only to "matters related to certifying production as organic" and left "untouched enforcement against abuse of the label 'organic.'" The court concluded that state lawsuits alleging intentional misuse of an organic label were not preempted because (in the California court's view) lawsuits of that kind would help rather than hinder Congress's objective.
The federal Organic Foods Production Act of 1990 (OFPA) creates a uniform, federal definition of the term "organic" and gives the U.S. Department of Agriculture exclusive authority to elucidate the labeling standard and to certify producers as qualifying to label food as "organic." The USDA may approve a state agency to carry out the certification function and impose more stringent state substantive standards. The California Department of Food and Agriculture has been approved for both of these roles. The OFPA and its California counterpart both provide for administrative enforcement of the regulations, including processes for consumer complaints to the relevant agency.
In Quesada, the plaintiff sued Herb Thyme Farms under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA), alleging that Herb Thyme applied a "Fresh Organic" label to conventionally produced herbs and to a mixture of organic and conventional herbs. Herb Thyme has an organic farm that has been certified to use the "organic" label, but also operates conventional, nonorganic farms.
The California Supreme Court held that the federal OFPA did not preempt Quesada's state-law claims. First, the court held that, because the pertinent provisions of OFPA do not reference enforcement, the statute expressly preempts state law only as to the definition of "organic" and the process for certifying that a grower's methods of production entitle it to use the "organic" label. The California court relied on the fact that the mislabeling claims did not address the certification or compliance of Herb Thyme's organic facility, but only challenged the use of the "organic" label for Herb Thyme products that contained (or consisted solely of) herbs that were not produced at the certified farm. The federal certification standards also address the procedures to be followed where a producer has both organic and conventional facilities, but the California Supreme Court found that regulation insufficient to bring the case within the OFPA's preemptive scope.
Second, the California court concluded that Quesada's claims were not impliedly preempted because they did not pose an obstacle to the uniform federal regulatory scheme, but rather furthered the purpose of that scheme. In the court's view, once the regulators decide whether a producer or product meets the standards in the first instance, private plaintiffs may enlist state-law theories to enforce the producer's later compliance with the labeling requirements. According to the court, allowing plaintiffs to use state statutory and common law to enforce the OFPA would "affirmatively further the purposes of the Act"—the more enforcement, the merrier.
By allowing a private plaintiff to pursue a state-law misrepresentation theory to police compliance with OFPA labeling standards, Quesada conflicts with the Eighth Circuit's decision in In re Aurora Dairy Corp. Organic Milk Marketing & Sales Practices Litigation. The Eighth Circuit held in Aurora Dairy that claims alleging that "milk [was sold] as organic when in fact it was not organic are preempted because they conflict with the OFPA." As the court of appeals put it, "compliance and certification cannot be separate requirements." While the plaintiffs in Aurora Dairy could not sue over the use of the "organic" label, they could challenge related assertions and omissions about the way the cows were raised and fed, including affirmative claims that the cows were antibiotic- and hormone-free.
The California Supreme Court tried to avoid the conflict by asserting that the plaintiffs in Aurora Dairy were challenging the certification process itself. But that is not what the Aurora court said; moreover, the claims it allowed were based on representations that did not use the word "organic."
Although the Quesada decision is limited on its face to claims involving fraudulent or intentional substitution of uncertified products for certified ones, that restriction may provide only modest comfort to defendants. Plaintiffs' counsel can manipulate the allegations in their complaints with relative ease, particularly under the elastic standards of the UCL and CLRA. And the California Supreme Court opinion reflects hostility to federal preemption, suggesting that state lawsuits serve the purposes of an otherwise uniform federal regulatory scheme merely by increasing the volume of litigation, and that the so-called presumption against preemption may be dispositive even in an area like food safety, where the federal government has been heavily involved for more than 100 years.
California, California Supreme Court, Consumers Legal Remedies Act, Eighth Circuit, false advertising, In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Pracs. Litig., Organic Foods Production Act, preemption, Quesada v. Herb Thyme Farms Inc., Unfair Competition Law, USDA
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