87 F.4th 1280
11th Cir.2023Background
- Three Florida restaurants (A1A Burrito Works, A1A Burrito Works Taco Shop 2, Juniper Beach Enterprises) bought packaged poultry from Sysco under Distribution Agreements that price products by the pound.
- On ~13 occasions over one year restaurants allege they paid for 40-lb boxes that actually weighed 34.7–37.3 lbs; they charged damages as the price difference for shortfall in pounds.
- Restaurants allege they used a commercially reasonable weighing process consistent with NIST Handbook 133; Florida inspectors also found underweight packages at two locations.
- Plaintiffs asserted breach of contract and FDUTPA claims; Sysco removed and moved to dismiss, arguing the Poultry Products Inspection Act (PPIA) preempts state-law claims that impose labeling/weight requirements inconsistent with federal standards.
- The district court dismissed both claims with prejudice, concluding the claims would impose different testing/label standards than federal law; the Eleventh Circuit affirmed dismissal of the FDUTPA claim but reversed dismissal of the breach-of-contract claim (remanding that claim).
- Legal backdrop: PPIA requires accurate quantity statements and preempts state labeling/packaging requirements “in addition to, or different than” federal requirements; NIST Handbook 133 (incorporated into regs) prescribes sampling, Maximum Allowable Variation (MAV) (for 40-lb box MAV = 1% = 0.4 lb), and average/individual package rules.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Restaurants' breach of contract claim is preempted by the PPIA | Restaurants: claim enforces parties’ private contract (price per pound); seeks recovery for Sysco failing to deliver agreed weight — not a state labeling requirement | Sysco: contract invokes federal standards and warranty language tied to federal law; claim effectively seeks labeling-based relief preempted by PPIA | Held: Not preempted. Breach claim enforces Sysco’s voluntary contractual undertaking on weight/price and does not impose new labeling/packaging requirements. Reversed dismissal and remanded. |
| Whether the FDUTPA claim (misleading labels) is preempted because plaintiffs failed to plead federal-standard underweight | Restaurants: their retail-level testing and NIST-consistent procedures plausibly show underweight/misleading labels; MAV/individual-package failures suffice | Sysco: plaintiffs’ testing allegedly diverges materially from federal sampling/testing rules; if products comply with federal standards, state claim is preempted | Held: FDUTPA claim preempted. Plaintiffs failed to plausibly allege packages were underweight under federal standards (handbook/regulatory sampling and average rules). Dismissal affirmed. |
| Whether plaintiffs may rely on individual-package MAV allegations (for the first time on appeal) to avoid preemption | Restaurants (at oral argument/reply): individual packages exceeded MAV so claim should survive | Sysco: (responded below) plaintiffs did not plead MAV theory in opening brief; testing inadequate | Held: Argument forfeited on appeal (not raised in opening brief); court declined to consider MAV theory without full briefing. |
Key Cases Cited
- Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005) (express-warranty/contract claims based on voluntary label statements are not equivalent to state-imposed labeling requirements and thus need not be preempted)
- American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995) (breach-of-contract claims enforcing private pricing agreements are not preempted by federal statutes that otherwise preempt state regulation)
- Cavalieri v. Avior Airlines C.A., 25 F.4th 843 (11th Cir. 2022) (de novo review of preemption and precedent recognizing enforcement of private contractual commitments as outside preemption)
- United States v. Campbell, 26 F.4th 860 (11th Cir. en banc) (standards for forfeiture and circumstances in which appellate courts may excuse failure to raise issues earlier)