Pamela K. Chen, United States District Judge.
Sara Marentette, Matthew O'Neil Nighswander, and Ellen Steinlein (collectively, "Plaintiffs"), on behalf of themselves
The facts underlying Plaintiffs' claims are straightforward. Plaintiff Steinlein alleges that from August 2012 through February 2013, she purchased Similac® Advance® Organic Infant Formula approximately once per month at stores in California. (FAC ¶ 16.) Likewise, Plaintiffs Marentette and Nighswander claim that they purchased Similac® Advance® Organic Infant formula in both liquid and powder form in New York and New Hampshire. (Id. ¶ 17.)
Plaintiffs assert that they purchased the Products after seeing, and in reliance on, the "Organic" representation on the Products' label, and because of this representation, were led to believe that the Products were organic and did not contain preservatives. (Id. ¶¶ 16-17.) Plaintiffs contend that the Products are not actually organic as defined under federal law because they contain certain ingredients that are prohibited in organic products. (Id. ¶¶ 18, 26.)
Plaintiffs allege that Defendant is liable under N.Y. Gen. Bus. Law § 349, the California Unfair Competition Law, Cal. Bus. & Prof. Code. § 17200 et seq., the California False Advertising Law, Cal. Bus. & Prof. Code. § 17500, et seq., the California Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq., the California Organic Products Act, Cal. Health & Safety Code §§ 110810-110959, and the common law of New York and California for breach of express warranty and unjust enrichment. (Id. ¶¶ 68-138.) All of these claims are based on the alleged false labeling of the Products as "Organic." Defendant moves to dismiss Plaintiffs' claims in their entirety.
To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must plead facts sufficient "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In evaluating a 12(b)(6) motion, a district court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Nielsen, 746 F.3d at 62; Cleveland v. Caplaw Enter., 448 F.3d 518, 521 (2d Cir.2006). A complaint that "tenders `naked assertion[s]' devoid of `further factual enhancement'" will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Rather, "[f]actual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555, 127 S.Ct. 1955. A complaint should be dismissed where a plaintiff has not "nudged [its] claims across the line from conceivable to plausible[.]" Id. at 570, 127 S.Ct. 1955. Of particular relevance here, "[a] district court may grant a motion to dismiss based on federal preemption, if the defense can easily be determined from the pleadings." Aaronson v. Am. Med. Sys.,
Defendant attacks the adequacy of Plaintiffs' State law claims by arguing that they are preempted by the OFPA. Specifically, Defendant contends:
(Dkt. 19-4 ("Def.'s Mem.") at ECF 12.)
Enacted in 1990, the OFPA empowers the Secretary of Agriculture (the "Secretary") to "establish an organic certification program for producers and handlers of agricultural products that have been produced using organic methods." 7 U.S.C. § 6503(a). In passing the statute, Congress articulated three main purposes:
Id. § 6501. The USDA also adopted the National Organic Program (the "NOP"), an extensive set of implementing regulations. See 7 C.F.R. §§ 205.1-205.699. Under the OFPA and NOP, a product can only be sold or labeled as "Organic" if it has previously been certified as "Organic" by an accredited certifying agent.
"Federalism, central to the constitutional design, adopts the principle that both the National and State Governments have elements of sovereignty the other is bound to respect." Arizona v. United States, 567 U.S. 387, 132 S.Ct. 2492, 2500, 183 L.Ed.2d 351 (2012) (citations omitted). Under the Supremacy Clause of the United States Constitution, "state laws that conflict with federal law are without effect" and are preempted. Altria Grp., Inc. v. Good, 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008) (citation and quotation omitted); U.S. Const., art. VI, cl. 2. In addressing preemption questions, "the purpose of Congress is the ultimate touchstone." Wyeth v. Levine, 555 U.S. 555, 564, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009) (citation and quotation omitted). "Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose." Altria, 555 U.S. at 76, 129 S.Ct. 538 (citation omitted).
Defendant argues that "[t]here is plainly a conflict between a federal law authorizing a producer to label its formula as organic and state law causes of action that would impose liability for that very label." (Def.'s Br. at ECF 14.) The type of preemption referenced by Defendant — conflict preemption — applies in "cases where compliance with both federal and state regulations is a physical impossibility ... and those instances where the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objections of Congress."
Because so few courts have confronted the exact issue presented here, a brief survey of the cases addressing the OFPA's preemptive scope is useful to frame the Court's analysis. To begin, the Eighth Circuit remains the only circuit court to address the issue. See In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig., 621 F.3d 781 (8th Cir.2010). In Aurora, consumers asserted State law claims against organic-certified dairy producers and retailers, alleging, inter alia, that their labeling of a milk product as
Id. at 798.
The only other appellate court to address the preemptive scope of the OFPA — the California Supreme Court — declined to agree or disagree with the Eighth Circuit's holding that "claims making a frontal assault on the validity of the organic producer's government certification" and those "against the federally sanctioned agent alleging that it erred either in initially granting certification or in not thereafter revoking certification" are preempted by the OFPA. Quesada v. Herb Thyme Farms, Inc., 62 Cal.4th 298, 195 Cal.Rptr.3d 505, 361 P.3d 868, 881-82 (2015). Because "the complaint [in Quesada] accept[ed] as valid [the defendant's] certification and compliance with federal regulations on its certified organic farm," the California Supreme Court concluded that the claims at issue did not fall within the category of preempted claims recognized by the Eighth Circuit in Aurora. Id., 195 Cal.Rptr.3d 505, 361 P.3d at 882. This is because unlike the allegations in Aurora, the plaintiff in Quesada alleged that the defendant sold both organic and non-organic herbs and that on many occasions "knowingly and intentionally" either mixed the two together or sold its non-organic herbs in a container exhibiting the USDA-certified "Organic" seal. Id., 195 Cal.Rptr.3d 505, 361 P.3d at 882-83. Based on these facts, but finding the Eighth Circuit's decision in Aurora to be "instructive," the Quesada court concluded that "claims of intentional commingling and fraudulent substitution of conventional for organic produce" were not preempted. Id., 195 Cal.Rptr.3d 505, 361 P.3d at 883.
As discussed further below, considering the relevant precedent, statutory text, and legislative history, the Court finds the Eighth Circuit's decision in Aurora to be persuasive and applicable to this case. Here, QAI certified the Products as "Organic" under federal law and only then was Defendant permitted to use the word "Organic" and the USDA seal on the Products' labels. Plaintiffs' challenge to this labeling cannot be described in any way other than a direct challenge to the USDA-accredited certifying agent's decision itself. The Court finds that such a challenge is preempted because "[t]o the extent state law permits outside parties, including consumers, to interfere with or second guess the certification process, the state law is an obstacle to the accomplishment of congressional objectives of the OFPA." Aurora, 621 F.3d at 795 (citations and quotations omitted).
7 U.S.C. § 6504.
Of particular relevance here, the OFPA also empowers the Secretary to "establish a National List of approved and prohibited substances that shall be included in the standards for organic production and handling established under [the OFPA] in order for such products to be sold or labeled as organically produced under [the statute]." Id. at § 6517(a). This National List contains "an itemization, by specific use or application, of each synthetic substance permitted ... or each natural substance prohibited." Id. § 6517(b).
The OFPA's broad statements of purpose also weigh in favor of finding that Plaintiffs' State law claims would be an obstacle to the implementation of the statute. As discussed above, Congress laid out these purposes in the statute itself:
7 U.S.C. § 6501 (emphasis added). These purposes would "be deeply undermined" by Plaintiffs' State law claims, which would render the USDA's "Organic" certification
The Senate Report's emphasis on national uniformity further confirms the Court's perspective that Congress could not have intended to create a regulatory scheme in which courts, or even juries, would determine whether a certain product's labeling as "Organic" was misleading to a reasonable consumer because of its ingredients. The Senate report reflects concern expressed during pre-enactment debates over the OFPA that "no two State laws [were] alike" and that "the differing State laws have also led to consumer confusion and troubled interstate commerce." S. Rep. No. 101-357, 1990 U.S.C.C.A.N. 4656, 4943. Congress noted its worry that "[e]ven the most sophisticated organic consumer finds it difficult to know, with certainty, what the term `organic' really means." Id. The Senate Report concludes that the only solution guaranteeing "that consumers are sure to get what they pay for" are "national standards." Id. These national standards can only be enforced by prohibiting claims, like Plaintiffs' here, which challenge this nationally applicable certification of food products as "Organic."
Another reason preemption is warranted is the OFPA's enforcement and remedial scheme. See Aurora, 621 F.3d at 797 ("The structure of the OFPA, and particularly its remedial scheme, also support our conclusion that to the extent state laws challenge Aurora's certification they are preempted.") Under the OFPA, the Secretary and NOP's Program Manager can investigate the accuracy of information provided by producers and certification agents by administering oaths, subpoenaing witnesses, compelling witness testimony, gathering evidence, and requiring the production of records. See 7 U.S.C. § 6519; 7 C.F.R. § 205.660. If the NOP's Program Manager "has reason to believe that a certified operation has violated or is not in compliance with the [OFPA]" or a "certifying agent or a State organic program's governing State official fails to take appropriate action to enforce the [OFPA] or regulations," then "[t]he Program Manager may initiate suspension or revocation proceedings against a certified operation." 7 C.F.R. § 205.660(b). Moreover, if an operation "knowingly sells or labels a product as organic, except in accordance with the
Against this backdrop of congressional intent and purpose, Plaintiffs argue that the Eighth Circuit's decision in Aurora is inconsistent with the Supreme Court's holding in Wyeth v. Levine, 555 U.S. 555, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009), in which the Court held that State law failure-to-warn claims were not preempted by the Food Drug and Cosmetic Act's (the "FDCA") regulation of drug labeling. Id. at 581, 129 S.Ct. 1187. The Court disagrees; the differences between the FDCA and OFPA warrant the different outcomes reached in Wyeth and Aurora.
In enacting the FDCA, Congress created a regulatory scheme in which manufacturers "bear[] responsibility for the content of [their] label at all times" and are "charged both with crafting an adequate label and with ensuring that its warnings remain adequate as long as the drug is on the market." Id. at 571, 129 S.Ct. 1187. "[I]t cast[s] federal labeling standards as a floor upon which States could build" and "establish[es] `minimal standards' for drug labels," such that failure to meet the FDA's minimal standards is prima facie evidence of a failure to warn, but compliance with them does not insulate a manufacturer from liability due to an inadequate warning. See id. at 577, 129 S.Ct. 1187. Thus, even after the FDA approves a drug label, a State tort suit might still "uncover known drug hazards" and serve as an "additional... layer of consumer protection that complements FDA regulation." Id. at 579, 129 S.Ct. 1187.
By contrast, the OFPA defines the precise term "Organic" and does not simply set minimum standards for that label, such that any product that meets all of the criteria set by the USDA for that term cannot be challenged as mislabeled or as violating any State law regarding truth in labeling with respect to that term. Under the OFPA, the word "Organic" is under the federal government's control and is only permitted on a product after approval by a USDA-accredited certification agent. See 7 C.F.R §§ 205.300(a), 205.303. And although "[t]he governing State official
Relying on the district court's decision in Segedie,
For the reasons set forth above and because all of Plaintiffs' State law claims depend on the alleged falsity of the Products' "Organic" label, the Court finds that all of Plaintiffs' claims are preempted, and grants Defendant's motion to dismiss the First Amended Complaint in its entirety. In their opposition, Plaintiffs request leave to amend their First Amended Complaint in the event the Court dismissed their claims. (Pls.' Opp. at ECF 42 n.29.) Should Plaintiffs seek to amend their complaint, they shall file a letter no longer than three (3) pages by September 23, 2016, setting forth the bases for their request and attaching a proposed Second Amended Complaint. If Plaintiffs fail to renew their request to amend their complaint by this date, the Court will direct the Clerk of
SO ORDERED.
The Court notes that Defendant independently argues that because the USDA did not approve Plaintiffs' State tort and statutory claims, they are expressly preempted. (Def.'s Mem. at ECF 17.) Because the Court concludes that Plaintiffs' State law claims stand as an obstacle to the execution of the purposes of the OFPA, and that therefore, Plaintiffs' State law claims are preempted on conflict preemption grounds, the Court need not address this argument.