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Class Action Defense Cases-Farm Raised Salmon Cases: California Supreme Court Holds Class Action Concerning Artificially Colored Salmon Not Preempted By Federal Law And Reverses Dismissal Of Class Action

Trial Court Erred in Holding that Class Action Under California’s Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) Alleging Failure to Disclose Artificial Coloring of Farm Raised Salmon was Preempted by Federal Law because Congress Allows “Identical” State Laws and did not Preclude Private Rights of Action to Enforce such State Laws California Supreme Court Holds

Class action lawsuits were filed against various grocery stores alleging violations of California’s Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) by “[selling] artificially colored farmed salmon without disclosing to consumers the use of color additives”; ultimately, the separate class actions were coordinated and in March 2004 a coordinated class action complaint was filed. Farm Raised Salmon Cases, ___ Cal.4th ___, 72 Cal.Rptr.3d 112, 116 (Cal. 2008). The coordinated class action complaint that alleged “fish farmers feed farm-raised salmon the chemicals astaxanthin and canthaxanthin to obtain a color of flesh resembling that of wild salmon,” that without these chemicals the farm-raised salmon would appear “grayish,” and that “consumers believe the color of salmon is an indication of its origin, quality, freshness, flavor, and other characteristics.” Id. According to the class action allegations, consumers are misled into believing that colored farm-raised salmon is actually wild salmon, id. The class action further alleged that artificially colored salmon raises health concerns, and that state and federal laws “require food labeling to state that farmed salmon is artificially colored and defendants failed to comply with those requirements.” Id. Defense attorneys demurred to the class action complaint in part on the ground that the state law claims were preempted by the federal Food, Drug, and Cosmetic Act (FDCA), which precludes private enforcement; the trial court agreed and dismissed the class action. Id., at 116-17. The Court of Appeal also held that plaintiffs’ state law claims were preempted by the FDCA because they are “predicated on a violation of the FDCA”; it therefore affirmed the judgment in favor of the defendants. Id., at 117. The California Supreme Court reversed.

After summarizing that the FDCA prohibits the misbranding of any food, and that “a food is…deemed misbranded if ‘[i]t bears or contains any … artificial coloring … unless it bears labeling stating that fact ….,’” the Supreme Court noted that “FDA regulations permit the use of the chemical substances astaxanthin and canthaxanthin in ‘the feed of salmonid fish’ as color additives ‘to enhance the pink to orange-red color of the flesh of salmonid fish.’” Farm Raised Salmon, at 117 (citations omitted). The FDA provides various means of disclosing the existence of these chemicals, the presence of which “must be declared as prescribed by the FDA,” id., at 117-18 (citations omitted). Congress also enacted the Nutrition Labeling and Education Act of 1990 (NLEA) “to create uniform national standards regarding the labeling of food and to prevent states from adopting inconsistent requirements with respect to the labeling of nutrients.” Id., at 118 (citation omitted). The NLEA thus expressly preempts state laws that affect “any food in interstate commerce,” including “any requirement for the labeling of food of the type required by section … 343(k) of this title that is not identical to the requirement of such section,” id. (citation omitted). Thus, state laws impliedly “may establish their own requirements pertaining to the labeling of artificially colored food so long as their requirements are identical to those contained in the FDCA in section 343(k).” Id.

After a detailed analysis, see Farm Raised Salmon, at 119-28, the Supreme Court reversed. The Court summarized its holdings at pages 115 and 116 as follows: “We conclude that [FDCA] section 337(a) does not preempt the action as plaintiffs do not seek to ‘enforce[], or to restrain violations’ of, the FDCA. (§ 337(a).) Rather, plaintiffs’ claims for deceptive marketing of food products are predicated on state laws establishing independent state disclosure requirements ‘identical to’ the disclosure requirements imposed by the FDCA, something Congress explicitly approved in section 343-1. (§ 343-1(a)(3).)” The Court further held that plaintiffs may pursue private rights of action to enforce such state laws, even though they are identical to the FDCA and even though such rights may not be enforceable under the FDCA. Id., at 128-29. Accordingly, it reversed the dismissal of the class action and remanded for further proceedings, id., at 129.

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