Thrеe parent consumers ("Parents") filed a putative class-action complaint against Abbott Laboratories, Inc., alleging that Abbott violated New York and California statutes and common law by advertising and selling Similac infant formula branded as organic and bearing the "USDA Organic" seal when the formula contained ingredients not permitted by the
BACKGROUND
According to the operative first amended complaint, Parents purchased Similac Advance Organic Infant Formula at various times from August 2012 through August 2014. Parent Ellen Steinlien alleges that she purchased the formula approximately once per month at stores in California. Parents Sara Marentette and Matthew O'Neil Nighswander (who are married) claim that they purchased thе formula in both liquid and powder form in New York and New Hampshire during the relevant time. The formula's packaging states that it is organic and displays the "USDA Organic" seal.
Parents allege that they purchased Similac Organic formula after seeing and relying on the word "organic" and the "USDA Organic" seal on the packaging, and that these labels led them to believe that the formula was organic. Parents allege that the Similac Organic formula was falsely labeled because it contains 16 ingredients
Abbott moved to dismiss, arguing primarily that Parents' state-law claims were preempted by the Act under the doctrine of conflict preemption (specifically, obstacle preemption), because permitting Parents to sue under state law for a label authorized by a certification scheme enacted by Congress would thwart Congress's purpose in enacting that scheme. Abbott also argued that Parents' claims were expressly preempted, along with other defenses. Parents countered that their suit did not conflict with federal law because they in fact sought to vindicate federal law through state-law causes of action. Parents also disputed Abbott's secondary arguments. Most significantly, they argued that the existence of an express preemption clause in the statute was strong evidence against implied conflict preemption.
After oral argument on the motion, the district court granted Abbott's motion to dismiss solely on conflict-preemption grounds. Marentette ,
This Court held oral argument on August 23, 2017. After oral argument, we solicited the views of the United States Department of Agriculture as amicus curiae on two questions related to the certification process and the USDA's regulations: (1) whether the certification process requires the certifying agent to review and approve the ingredients of the final product to be labeled organic, and (2) whether certification is co-extensive with statutory and regulatory compliance, that is, whether products made in accordance with a properly certified plan will necessarily comply with the OFPA. The USDA responded on October 6, 2017. Its amicus brief stated that certifying аgents review and approve both the process and the ingredients of the final product to be labeled organic, but generally do not inspect or certify batches of products. The USDA also explained that certification is intended to be coextensive with compliance, but that it may not be if a plan is improperly certified or if a producer or handler changes the plan after certification.
DISCUSSION
I. History of the Organic Foods Production Act
Because the outcome of this case depends in large part on the content and scope of the OFPA, we begin with some background on the statutory scheme. Enacted in 1990, the OFPA directs the Secretary of Agriculture to "establish an organic certification program for producers and handlers of agricultural products that have been produced using organic methods."
Consistent with this statutory mandate, the USDA established the National Organic Program ("NOP" or "Program") to implement the OFPA. Under the OFPA, a product may only be sold or labeled as organic if it was "produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent."
A producer or handler (such as Abbott)
To be sold or labeled as organic, a product generally must have been produced and handled without the use of synthetic chemicals.
Once the certifying agent has approved an organic plan, it performs an on-site inspection, during which it reviews all of the inputs and methоds of production. See
The statutory scheme also includes enforcement mechanisms: a person who knowingly sells or labels a product as organic in violation of the statute is subject to civil monetary penalties imposed by the USDA, see
II. Conflict Preemption
The district court granted Abbott's motion to dismiss based on conflict preemption. We review the district court's preemption analysis de novo . See
Under the Supremacy Clause, "the Laws of the United States" are the "supreme Law of the Land." U.S. Const. art. VI, cl. 2. Congress therefore has "the power to preempt state law" through federal legislation. Arizona v. United States ,
Conflict preemption, one form of implied preemption, refers to situations where compliance with both state and federal law is a physical impossibility, or, as relevant here, where the state law at issue "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Arizona ,
When addressing federal preemption questions, "we have long presumed that Congress does not cavalierly pre-empt state-law causes of action," Medtronic, Inc. v. Lohr ,
The presumption against federal law preempting state law is particularly strong when Congress legislates in a field traditionally occupied by states. See Wyeth ,
Abbott argues that the Act preempts Parents' claims bеcause there is a conflict between the federal law which authorizes Abbott to label its infant formula as organic pursuant to a certified organic plan and the state-law causes of action through which Parents seek to impose liability for that same label.
We are not the first Court of Appeals to address this issue. In Aurora ,
We agree with the district court and with Aurora , and therefore conclude that Parents' claims are preempted. There is simply no way to rule in Parents' favor without contradicting the certification decision, and, through it, the certification scheme that Congress enacted in the OFPA.
Parents make several arguments against this conclusion: first, that conflict-obstacle preemption does not apply because their state-law claims seek to vindicate
Parents' primary argument rests on a false premise-that their claim that Abbott's products violate fеderal law is distinct from a claim that Abbott falsely or wrongfully obtained its organic certification. We see no such distinction. Parents allege that although Abbott's product was certified as organic pursuant to the OFPA, the product is not actually organic under the Act. This position necessarily undermines Congress's purpose in enacting the OFPA, because it demands adjudication of a product's organic status separate and apart from the scheme Congress laid out in the law.
Unlike the state-law claims that survived in Aurora , these claims are indeed "state law challenges to the certification decision itself," rather than "state law challenges to the facts underlying certification." Aurora ,
Parents' argument boils down to: their claims are not preempted because they are meritorious, and therefore vindicate federal law, rather than undermining it. But, even if Parents' claims were meritorious, that is not how preemption analysis works. Because determining whether Parents have meritorious state-law claims requires the Court to look behind Abbott's certification granted pursuant to a federal scheme, those state-law claims are an obstacle to the federal scheme's objectives and are preempted.
Parents insist that Abbott cannot overcome the presumption against preemption here, where the statute's express-preemption provision and parts of its legislative history
"But the existence of an 'express preemption provisio[n] does not bar the ordinary working of conflict preemption principles' or impose a 'special burden' that would make it more difficult to establish the preemption of laws falling outside the clause." Arizona ,
The enforcement scheme that Congress actually provided, which allocates enforcement power to the federal agency and accredited agents, is further evidence that Congress did not want to permit individual consumers to challenge certification decisions made pursuant to the OFPA. Congress granted the agency authority to investigate certified handlers and prоducers and those seeking certification, and prohibited those handlers and producers from failing to provide or refusing to provide the agency with accurate information. Congress also gave the agency authority to suspend or revoke a producer or handler's organic certification, and to ban or fine-to the tune of $10,000 per violation-producers or handlers who knowingly violate the statute. The NOP can also suspend or ban certifying agents who falsely or negligently certify an operation. And Congress additionally created a remedial mechanism: any of these actions taken by the Secretary or certifying agent that "adversely affects" a person or is "inconsistent with the organic certification program," may be appealed to the agency, and eventually challenged in federal district court.
Parents point out that the remedial provision only applies to a wrongful denial of certification, not to a wrongful grant, and that even that remedy is only available tо the persons or entities who are adversely affected by the decision to deny certification (presumably producers and handlers, but not consumers). See
Parents decry their lack of remedy as a defect, but it seems to us that this is simply the manner that Congress chose to enforce the statute. Congress's stated purposes in enacting the OFPA were "to establish national standards governing the
In light of our conclusion that Parents' claims are preempted by federal law, we need not address Abbott's remaining arguments based on primary jurisdiction, failure to exhaust, or failure to state a claim.
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The judgment of the district court is affirmed.
Notes
Parents' first amended complaint initially refers to 26 allegedly impermissible ingredients, but later describes only 16 such ingredients. Parents' briefs before this Court cite the portion of the complaint that mentions 26 allegedly prohibited ingredients, but at other points their briefs refer to only 16. As explained further below, this difference is immaterial because Parents do not allege that Abbott added any ingredients to its infant formula except those listed on the label, see generally First Am. Compl. ¶ 35, and whether those ingredients are permitted by the Act is a question of law.
The OFPA refers to "producers" and "handlers." A "handler" is a "person engaged in the business of handling agricultural products," which means "receiv[ing,] ... process[ing], pаckage[ing], or stor[ing] such products." See
The remedy Parents seek underscores this inherent conflict. During oral argument before the district court on the motion for leave to file a second amended complaint, counsel for Parents stated that they wanted the Similac Organic formula labels to sаy that the product contains non-organic ingredients. See App. 107, 117. Such a remedy would clearly undermine the certification and labeling scheme Congress enacted in the OFPA.
At oral argument, Parents insisted that they had evidence that Abbott used ingredients in its organic-labeled infant formula that it did not disclose to the certifying agent, but, as noted above, Parents did not plead as much in their first two complaints, nor in their proposed second amended complaint. And before the district court, Parents conceded that Abbott's plan was properly certified and that the challenged ingredients all appeared on the product's ingredient list. See App. 95, 114-15, 117 ("We are not challenging the organic certification."), 123.
Most of what Parents cite as legislative history is not Congressional committee reports or statements, but the USDA's explanation of the proposed rule which eventually established the National Organic Program. Parents' only piece of actual legislative history is a single quotation from the report of the Senate Committee on Agriculture, Nutrition, and Forestry which accompanied the OFPA bill: "the Committee clearly intends to preserve the rights of States to develop standards particular to their needs that are additional and complementary to the Federal standards." The quotation appears to support Parents' argument, but it precedes an extensive discussion of how the statute will limit state action because the Committee "is most concerned that State action not disrupt interstate cоmmerce." See S. Rep. No. 101-357, at 4949 (1990). To the extent Parents' quoted sentence from the Senate Committee report supports their argument, the balance of the report does not.
We do not reach the issue of whether Parents' claims are preempted by the OFPA's express-preemption provision, as that provision's scope is separate from whether Parents' claims are implicitly preempted as an obstacle to Congress's scheme. See, e.g. , Bates v. Dow Agrosciences LLC ,