MICHELLE QUESADA, Plaintiff and Appellant, v. HERB THYME FARMS, INC., Defendant and Respondent.
No. S216305
Supreme Court of California
Dec. 3, 2015
298
Kiesel Boucher Larson, Law Office of Raymond P. Boucher, Boucher, Raymond P. Boucher, Maria L. Weitz; Whatley Kallas, Edith M. Kallas, Alan M. Mansfield; Public Justice, Leslie A. Brueckner; Kiesel + Larson, Helen Zukin; Johnson & Johnson and Neville Johnson for Plaintiff and Appellant.
Lexington Law Group, Mark N. Todzo and Howard Hirsch for Center for Food Safety and Organic Consumers Association as Amici Curiae on behalf of Plaintiff and Appellant.
Public Citizen Litigation Group, Adina H. Rosenbaum; Chavez & Gertler and Mark A. Chavez for Public Citizen, Inc., as Amici Curiae on behalf of Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Nicklas A. Akers, Assistant Attorney General, Michele Van Gelderen and Steven De Salvo, Deputy Attorneys General, for State of California as Amicus Curiae on behalf of Plaintiff and Appellant.
Greenberg Traurig, Mark D. Kemple, Karin L. Bohmholdt and Angela L. Diesch for Defendant and Respondent.
U.S. Chamber Litigation Center, Inc., Kate Comerford Todd, Tyler R. Green; Morrison & Foerster, Ruth N. Borenstein and William L. Stern for Chamber of Commerce of the United States of America as Amicus Curiae on behalf of Defendant and Respondent.
OPINION
WERDEGAR, J.—To buyers and sellers alike, “labels matter.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 328 [120 Cal.Rptr.3d 741, 246 P.3d 877].) They serve as markers for a host of tangible and intangible
Among those labels Kwikset cited as making a difference to some consumers, and as potentially actionable under state unfair competition law if misused, was the designation of produce or other food as “organic.” (Kwikset Corp. v. Superior Court, supra, 51 Cal.4th at pp. 332–333.) Here we must decide whether such a state law claim is viable, or whether the federal regulatory regime for certifying organic growers preempts a state claim that a certified grower is intentionally mislabeling conventionally grown produce and selling it as organic.
We hold a state law claim that produce is being intentionally mislabeled as organic is not preempted. When Congress entered the field in 1990, it confined the areas of state law expressly preempted to matters related to certifying production as organic, leaving untouched enforcement against abuse of the label “organic.” Moreover, a central purpose behind adopting a clear national definition of organic production was to permit consumers to rely on organic labels and curtail fraud. Accordingly, state lawsuits alleging intentional organic mislabeling promote, rather than hinder, Congress‘s purposes and objectives. Because the Court of Appeal concluded to the contrary, finding these state fraud claims impliedly preempted, we reverse its judgment.
PROCEDURAL AND FACTUAL BACKGROUND
This case is a putative class action challenging an herb grower‘s marketing of its herbs as organic. Because this appeal follows the granting of a motion for judgment on the pleadings (
Defendant Herb Thyme Farms, Inc. (Herb Thyme), is a large herb-growing operation with multiple farms throughout California. Most of its farms use conventional growing methods, but one of its farms uses organic processes and has been properly certified by a registered certifying agent. When it comes time for distribution and marketing, however, Herb Thyme brings its conventionally grown and organic herbs to the same packing and labeling facility, processes them together, and sends blended conventional and organic herbs out under the same “Fresh Organic” label and packaging. As well, Herb Thyme packages and labels as organic some herbs that are entirely conventionally grown.
Herb Thyme sought judgment on the pleadings on federal preemption and primary jurisdiction grounds. The Organic Foods Production Act of 1990 (
The Court of Appeal affirmed. It disagreed with the trial court‘s finding of express preemption, reasoning that the express preemption provisions in the Organic Foods Act limited state organic certification programs but did not foreclose state false advertising suits. However, it agreed such suits were a potential obstacle to Congress‘s purposes and objectives of establishing uniform national standards for organic production and labeling, and thus impliedly preempted.
We granted review to consider these preemption questions.
DISCUSSION
I. State and Federal Regulation of Organic Products
The “first [use of] the word ‘organic’ to describe a method of farming in which the farmer strove for improved natural soil condition through the use of natural additions of manure and compost and the avoidance of chemical amendments” traces to the 1940s, perhaps not coincidentally the time when use of synthetic pesticides first became widespread. (Watnick, The Organic Foods Production Act, the Process/Product Distinction, and a Case for More End Product Regulation in the Organic Foods Market (2014) 32 UCLA J. Envtl. L. & Pol‘y 40, 45 & fn. 20 (Watnick); see Pasquinelli, One False Move: The History of Organic Agriculture and Consequences of Non-Compliance with the Governing Laws and Regulations (2010) 3 Golden
This nascent unregulated market was not without its problems. For one, the absence of any uniform, agreed-upon standards created consumer confusion: “Even the most sophisticated organic consumer finds it difficult to know, with certainty, what the term ‘organic’ really means.” (Sen.Rep. No. 101-357, 2d Sess., p. 289 (1990), reprinted in 1990 U.S. Code Cong. & Admin. News, p. 4943.) For another, the combination of consumers willing to pay a premium for organic products and the absence of definite standards created incentives for sharp practices. (Id. at pp. 289–290, reprinted in 1990 U.S. Code Cong. & Admin. News, pp. 4943–4944; Note, supra, 52 Food & Drug L.J. at p. 539 [“Because no regulations existed, unscrupulous producers could proffer almost any organic claim to render their food more marketable.“]; Lathrop, supra, 16 J. Corp. L. at pp. 890–891.)
The several states stepped in first. Oregon enacted a first-of-its-kind state organic certification law in 1973. (
Frustratingly, however, no two state laws were the same. (Sen.Rep. No. 101-357, 2d Sess., supra, p. 289, reprinted in 1990 U.S. Code Cong. & Admin. News, p. 4943.) This multiplicity of certification procedures and standards presented ongoing difficulties for both consumers and the marketplace. (Ibid. [“While State action represents a positive step forward for the organic foods industry, the differing State laws have also [led] to consumer confusion and troubled interstate commerce.“].) Seeking uniformity, the organic producer community lobbied for federal regulation. (Id. at p. 290, reprinted in 1990 U.S. Code Cong. & Admin. News, p. 4944; Franzen, Will GATT Take a Bite Out of the Organic Food Production Act of 1990? (1998) 7 Minn. J. Global Trade 399, 401.)
After some delay, the USDA in 2000 issued its final rule adopting implementing regulations, with the regulations to take effect in 2002. (65 Fed.Reg. 80548 (Dec. 21, 2000).) The final rule establishes detailed production and handling requirements for any product being sold as organic. (
Thereafter, California became the first state to have its own organic program approved. (See
With respect to enforcement, the federal Organic Foods Act imposes civil penalties for labeling or selling products as organic when the act has not been complied with. (
We must decide whether this regulatory framework leaves room for claims under state laws of general application targeting fraud and misrepresentation.
II. Preemption
A. General Principles
“The supremacy clause of the United States Constitution establishes a constitutional choice-of-law rule, makes federal law paramount, and vests
We have identified several species of preemption. Congress may expressly preempt state law through an explicit preemption clause, or courts may imply preemption under the field, conflict, or obstacle preemption doctrines. (Brown v. Mortensen (2011) 51 Cal.4th 1052, 1059 [126 Cal.Rptr.3d 428, 253 P.3d 522]; In re Jose C. (2009) 45 Cal.4th 534, 550 [87 Cal.Rptr.3d 674, 198 P.3d 1087]; Viva! Internat. Voice for Animals v. Adidas Promotional Retail Operations, Inc., supra, 41 Cal.4th at pp. 935–936.) Two of these are at issue here: express preemption and obstacle preemption. The burden is on Herb Thyme, the party asserting preemption, to demonstrate either applies. (Viva!, supra, 41 Cal.4th at p. 936; Bronco Wine Co. v. Jolly (2004) 33 Cal.4th 943, 956 [17 Cal.Rptr.3d 180, 95 P.3d 422].)
B. Express Preemption
Herb Thyme contends the Organic Foods Act expressly preempts suit under general state consumer laws because it comprehensively displaces state remedies and enforcement procedures. We conclude, as the Court of Appeal did, that the act‘s express preemptive effect is substantially narrower and does not extend to the claims here.
We begin with the statutory text, necessarily the source of the best evidence concerning the breadth of Congress‘s preemptive intent. (Brown v. Mortensen, supra, 51 Cal.4th at pp. 1059–1060.) “[O]ur task is to ‘identify the domain expressly pre-empted.’ ” (Id. at p. 1062.)
The Organic Foods Act‘s provisions explicitly displace state law in two regards. First, they set aside existing state standards for what it means to
Second, the Organic Foods Act federalizes certification, the process by which growers may seek to demonstrate their production methods comply with the uniform federal standard. At the time of enactment, growers faced a patchwork of differing regulations, with dozens of entities offering certification and state requirements varying widely from jurisdiction to jurisdiction. (65 Fed.Reg. 80548, 80664 (Dec. 21, 2000).) Under the Organic Foods Act, the USDA is directed to establish a federal certification program. (
These provisions establish federal exclusivity in the affected domains. Whether production processes qualify as organic is to be measured “only in accordance with” the provisions of the Organic Foods Act. (
In contrast, no similar language of exclusivity is included in the provisions of the Organic Foods Act governing sanctions for misuse of the organic label. The act provides for, inter alia, potential civil fines of up to $10,000 and ineligibility for certification for a period of five years. (
Notably, the Organic Foods Act permits states to adopt more stringent standards governing organic production. (
Consistent with this view of the text, those courts to consider the reach of the Organic Foods Act have found no express preemption of state consumer protection lawsuits. In In re Aurora Dairy Corp. Organic Milk Marketing (8th Cir. 2010) 621 F.3d 781, the Eighth Circuit considered and rejected the argument that the act expressly preempted state mislabeling claims. It recognized the limited nature of express preemption under the act, which extends to state standards and certification programs not approved by the USDA but no further. In contrast, “Congress did not expressly preempt state tort claims, consumer protection statutes, or common law claims.” (Id. at p. 792.) Federal trial courts have arrived at the same conclusion. (See Jones v. ConAgra Foods, Inc. (N.D.Cal. 2012) 912 F.Supp.2d 889, 894–895 [claim under California
Herb Thyme relies on one additional district court case, All One God Faith, Inc. v. Hain Celestial Group, Inc. (N.D.Cal., Aug. 8, 2012, No. C 09-3517 SI) 2012 U.S.Dist. Lexis 111553, to support its argument, but that decision is inapposite. The case involved a federal Lanham Act (
Noting the Organic Foods Act preempts existing state organic certification programs and requires future certification programs to be submitted for federal approval (
However, by its terms,
Accordingly, like the Court of Appeal and every previous court to consider the question, we conclude the Organic Foods Act does not expressly preempt general state consumer fraud statutes.
C. Obstacle Preemption
As an alternative to express preemption, Herb Thyme argues the state claims pleaded here interfere with congressional goals and should be barred. Far from posing an obstacle, we conclude claims such as these affirmatively further the purposes of the act. Accordingly, they are not impliedly preempted.
Obstacle preemption permits courts to strike state law that stands as “an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” (Hines v. Davidowitz (1941) 312 U.S. 52, 67 [85 L.Ed. 581, 61 S.Ct. 399]; accord, Viva! Internat. Voice for Animals v. Adidas Promotional Retail Operations, Inc., supra, 41 Cal.4th at p. 936.) It requires proof Congress had particular purposes and objectives in mind, a demonstration that leaving state law in place would compromise those objectives, and reason to discount the possibility the Congress that enacted the legislation was aware of the background tapestry of state law and content to let that law remain as it was. Ultimately, ” ‘what constitutes a “sufficient obstacle [for a finding of implied preemption] is a matter of judgment, to be informed by examining the federal statute as a whole and identifying its purpose and intended effects.” ’ ” (Bronco Wine Co. v. Jolly, supra, 33 Cal.4th at p. 992, italics omitted, quoting Crosby v. National Foreign Trade Council (2000) 530 U.S. 363, 373 [147 L.Ed.2d 352, 120 S.Ct. 2288].)
Historically, the United States Supreme Court and this court have conducted the search for congressional intent through the lens of a presumption against preemption. (E.g., Wyeth v. Levine, supra, 555 U.S. at p. 565; Bates v. Dow Agrosciences LLC (2005) 544 U.S. 431, 449 [161 L.Ed.2d 687, 125 S.Ct. 1788]; Brown v. Mortensen, supra, 51 Cal.4th at pp. 1060, 1064.) The presumption is founded on “respect for the States as ‘independent sovereigns in our federal system’ “; that respect requires courts “to assume that ‘Congress does not cavalierly pre-empt state-law causes of action.’ ” (Wyeth, supra, 555 U.S. at p. 565, fn. 3.) The strength of the presumption is heightened in areas where the subject matter has been the long-standing subject of state regulation in the first instance; where federal law touches ” ‘a field that “has been traditionally occupied by the States,” ’ ” the party seeking to show preemption “bear[s] the considerable burden of overcoming ‘the starting presumption that Congress does not intend to supplant state law.’ ” (De Buono v. NYSA-ILA Medical and Clinical Services Fund (1997) 520 U.S. 806, 814 [138 L.Ed.2d 21, 117 S.Ct. 1747]; see CSX Transp., Inc. v. Easterwood (1993) 507 U.S. 658, 663–664 [123 L.Ed.2d 387, 113 S.Ct. 1732] [“In the interest of avoiding unintended encroachment on the authority of the States, however, a court interpreting a federal statute pertaining to a subject traditionally governed by state law will be reluctant to find pre-emption.“].) A rebuttal of the presumption requires a demonstration that preemption was the ” ’ “clear and manifest purpose of Congress.” ’ ” (Wyeth, at p. 565.)
The regulation of food labeling to protect the public is quintessentially a matter of long-standing local concern. The first state legislation designed to address fraud and adulteration in food sales was enacted in 1785. (Bones, State and Federal Organic Food Certification Laws: Coming of Age?, supra, 68 N.D. L.Rev. at p. 409.) California began regulating food mislabeling in the 1860s, just a few years after statehood. (See Stats. 1862, ch. 365, § 5, pp. 484–485 [“It is hereby forbidden, and declared a misdemeanor, to sell any article, to be used as food or drink by persons, under a false name, with intent to deceive the purchaser as to the real nature of the article.“]); Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1088 [72 Cal.Rptr.3d 112, 175 P.3d 1170].) In response to widespread mislabeling, misbranding, and adulteration by food suppliers, by the late 19th century “many if not most states exercised their traditional police powers to regulate generally the marketing of impure or deceptively labeled foods and beverages.” (Bronco Wine Co. v. Jolly, supra, 33 Cal.4th at p. 960; see id. at pp. 959–961.)6
Given this long-standing state oversight, the federal government has assumed a more peripheral role and routinely left undisturbed local policy judgments about how best to protect consumers. “If there be any subject over which it would seem the States ought to have plenary control, and the power to legislate in respect to which it ought not to be supposed was intended to be
Consequently, the presumption against preemption “applies with particular force” where state consumer protection laws regulating deceptive food labeling are at issue. (Farm Raised Salmon Cases, supra, 42 Cal.4th at p. 1088; see Bronco Wine Co. v. Jolly, supra, 33 Cal.4th at p. 974 [given the states’ “extensive and dominant” exercise of police power to regulate food labeling, “a strong presumption against preemption applies“]; General Motors Corp. v. Abrams (2d Cir. 1990) 897 F.2d 34, 41–42 [“compelling evidence of an intention to preempt is required” where consumer protection is concerned].) The expectation Congress would have said something expressly if it had intended to override the states’ long-standing regulatory primacy is at its apex here. (See Farm Raised Salmon Cases, supra, 42 Cal.4th at p. 1091.)
In recent years, the continuing vitality of the nearly 70-year-old presumption against preemption has come into question. Four Supreme Court justices have called for its abandonment. (CTS Corp. v. Waldburger (2014) 573 U.S. 1, 18–19 [189 L.Ed.2d 62, 79–80, 134 S.Ct. 2175, 2189] (conc. opn. of Scalia, J., joined by Roberts, C. J., Thomas & Alito, JJ.); PLIVA, Inc. v. Mensing (2011) 564 U.S. 604, 621–622 [180 L.Ed.2d 580, 594–595, 131 S.Ct. 2567, 2579–2580] (plur. opn. of Thomas, J., joined by Roberts, C. J., Scalia & Alito, JJ.); Altria Group, Inc. v. Good (2008) 555 U.S. 70, 98–103 [172 L.Ed.2d 398, 129 S.Ct. 538] (dis. opn. of Thomas, J., joined by Roberts, C. J., Scalia & Alito, JJ.).) However, this view has yet to command a majority. Nor is it clear those justices arguing for presumptionless preemption analysis would apply that approach to obstacle preemption. CTS Corp. and Altria Group were express preemption cases, while PLIVA was a conflict preemption case. The separate opinions in the two express preemption cases limited their call for a repeal of the presumption to cases interpreting express preemption clauses (CTS Corp., supra, 573 U.S. at p. 18 (conc. opn. of Scalia, J., joined by Roberts, C. J., Thomas & Alito, JJ.); Altria Group, supra, 555 U.S. at p. 102 (dis. opn. of Thomas, J., joined by Roberts, C. J., Scalia & Alito, JJ.)), while the conflict preemption case offered a theory of interpretation arguably applicable only to cases where compliance with state and federal law would be impossible (PLIVA, at pp. 621–622). In contrast, both Chief Justice Roberts
For now, Rice v. Santa Fe Elevator Corp. (1947) 331 U.S. 218, 230 [91 L.Ed. 1447, 67 S.Ct. 1146], the original source of the presumption, and the countless cases that have followed it remain the law. Justices Kennedy, Ginsburg, Breyer, Sotomayor and Kagan still endorse and apply a presumption. (CTS Corp. v. Waldburger, supra, 573 U.S. at p. 9 [189 L.Ed.2d at p. 79, 134 S.Ct. at pp. 2188–2189] (plur. opn. of Kennedy, J., joined by Sotomayor & Kagan, JJ.); PLIVA, Inc. v. Mensing, supra, 564 U.S. at pp. 639–643 [180 L.Ed.2d at pp. 605–607, 131 S.Ct. at pp. 2590–2592] (dis. opn. of Sotomayor, J., joined by Ginsburg, Breyer & Kagan, JJ.); see Arizona v. Inter Tribal Council of Ariz., Inc. (2013) 570 U.S. 1 [186 L.Ed.2d 239, 257–259, 133 S.Ct. 2247, 2260–2261] (conc. opn. of Kennedy, J.) [questioning whether a “presumption” is the best way to characterize the appropriate canon of construction, while espousing the view that “a court must not lightly infer a congressional directive to negate the States’ otherwise proper exercise of their sovereign power“].)
Accordingly, in this obstacle preemption case, we continue to conduct our analysis from the starting point of a presumption that displacement of state regulation in areas of traditional state concern was not intended absent clear and manifest evidence of a contrary congressional intent. With this presumption in mind, we consider the evident purposes and objectives of the Organic Foods Act.
When it adopted the act, Congress identified a series of related problems on both the demand and supply sides that were hampering development of a healthy organic market. On the demand side, the absence of consistent national standards for organic production had led to “consumer confusion” in
Against this background, the first section of the Organic Foods Act expressly articulates Congress‘s intentions. “It is the purpose of this chapter—(1) to establish national standards governing the marketing of certain agricultural products as organically produced products; (2) to assure consumers that organically produced products meet a consistent standard; and (3) to facilitate interstate commerce in fresh and processed food that is organically produced.” (
By all appearances, permitting state consumer fraud actions would advance, not impair, these goals. Substitution fraud, intentionally marketing products as organic that have been grown conventionally, undermines the assurances the USDA organic label is intended to provide. Conversely, the prosecution of such fraud, whether by public prosecutors where resources and
We may consider as well statements by the USDA, which Congress charged with adopting regulations to implement the Organic Foods Act. (
When the USDA issued its final rule adopting implementing regulations, it emphasized that the uniform federal standards for organic certification were designed to supplement and enhance, rather than foreclose, state law consumer remedies for deception. The final rule commentary recognized “consumer fraud involving organic food does occur,” and recited multiple instances where state civil and criminal remedies for such fraud had been pursued. (65 Fed.Reg. 80548, 80668 (Dec. 21, 2000).) However, the legal framework necessary for effective fraud deterrence was often lacking: “[O]nly about half of the States have any organic legislation, and few of those States have laws with enough teeth to permit prosecution of organic fraud. In States without similar laws, the costs associated with remedies via the tort system may be high.” (65 Fed.Reg. 80548, 80668.) Part of the problem was the absence of a clearly defined and accepted meaning for
The especially strong presumption against preemption in this precise area reinforces this conclusion. Congress was surely aware of both the extensive history of state regulation of food labeling and the widespread state regulation of general deception in the marketplace. (See Farm Raised Salmon Cases, supra, 42 Cal.4th at pp. 1088, 1091.) Yet it made note of, and expressly set aside, only those state laws establishing either standards for the meaning of “organic” or standards for certification. (
Moreover, because the Organic Foods Act contains no private right of action, implied preemption would render organic labeling uniquely immune from suits for deception because of legislation Congress passed, in part, to prevent food from being “deliberately mislabeled as ‘organic.’ ” (Sen.Rep. No. 101-357, 2d Sess., supra, p. 290, reprinted in 1990 U.S. Code Cong. & Admin. News, p. 4944.) Congressional intent is the touchstone of preemption analysis, including implied preemption analysis. To infer from legislation motivated by an explicit concern over the proliferation of fraud in organic sales that Congress intended to eliminate existing fraud remedies would be
The only published appellate decision to consider the scope of implied preemption under the Organic Foods Act, In re Aurora Dairy Corp. Organic Milk Marketing, supra, 621 F.3d 781 (Aurora Dairy), is instructive. In Aurora Dairy, the Eighth Circuit held preempted only state consumer protection claims asserting the defendant dairy should not have been permitted to sell milk as USDA organic because its production methods were not actually consistent with federal regulations—that is, claims making a frontal assault on the validity of the organic producer‘s government certification. These claims were preempted because they conflicted with the exclusive role of federally certified agents in certifying a producer‘s methods as organic. (Id. at pp. 796–797.) Preempted as well were claims against the federally sanctioned agent alleging that it erred either in initially granting certification or in not thereafter revoking certification. (Id. at pp. 787, 795–796.)
But Aurora Dairy expressly distinguished as not preempted state law claims that merely challenged the truth of facts relating to certification. (Aurora Dairy, supra, 621 F.3d at p. 797.) For example, the plaintiffs contested representations that milk was being produced without antibiotics or pesticides and that the defendants’ cows received humane treatment. (Id. at p. 790.) Though evidence of inhumane treatment might have precluded a certifying agent from granting certification, this potential overlap did not require preemption. Aurora Dairy rejected the producer‘s argument that “because the class plaintiffs’ claims are based upon allegations that Aurora, despite its certification, knowingly failed to comply with provisions of the [Organic Foods Act] and [implementing regulations] upon which certification is based, those claims must be dismissed, because certification means that Aurora complied with the statute and regulations.” (Id. at pp. 797–798.) Certification decisions inevitably rested upon only sampled inspections of a producer‘s operations; allowing proof of dairy misrepresentations, unlike direct challenges to certification, would not require a court to decide whether a certifying agent had erred based on what the agent had seen. (Id. at p. 798.) Considering the structure and evident purposes of the Organic Foods Act, the Eighth Circuit concluded suits challenging representations relevant to certification posed no obstacle and need not be preempted. (Id. at pp. 798–799.)
Given the operative complaint, however, we have no occasion to determine whether such a claim would be preempted, nor whether we agree with the Eighth Circuit concerning the area of implied preemption it identifies. (Cf. Segedie v. Hain Celestial Group, Inc., supra, 2015 U.S.Dist. Lexis 60739 at pp. *12–*19 [disagreeing with Aurora Dairy and rejecting obstacle preemption even for claims that challenge whether products made by certified production methods are truly organic].) Unlike the complaint at issue in Aurora Dairy, the complaint here accepts as valid Herb Thyme‘s certification and compliance with federal regulations on its certified organic farm. Quesada concedes Herb Thyme can and does grow organic herbs, which it is entitled to package and sell using a USDA Organic label.
The gravamen of these claims is different. Herb Thyme has both certified organic and conventional growing operations. Underlying each cause of action is the allegation that Herb Thyme not only sells its organic herbs under an organic label, but also knowingly and intentionally sells some conventional herbs under an organic label and at an organic premium price. Thus, according to the operative complaint, Herb Thyme sometimes intentionally mixes its conventional herbs in with organic herbs. On other occasions, it fills orders for organic herbs entirely with conventional herbs. According to the complaint, this fraud is willful: “At all relevant times herein Defendants were aware that Herb Thyme‘s ‘Fresh Organic’ herb products were not 100% organic herb products“; “Herb Thyme deliberately promoted and continues to promote its conventionally grown fresh herb products to consumers in a false and misleading manner” in order to garner the premium prices organic products command; a USDA organic label is included on packaging “with the
Whether or not the improper certification claims preempted in Aurora Dairy would pose an obstacle to congressional purposes and objectives, the claims just recited do not. Congress enacted national standards to boost consumer confidence in the assurances an organic label carries, protect fair competition, and promote the growth of the interstate market for organic goods. (
Herb Thyme further contends permitting this suit to proceed would interfere with the exclusive role granted the USDA, state Department of Agriculture, and certifying agents to ensure compliance with national standards. But while the Organic Foods Act surely gives these entities a leading role in monitoring grower behavior, nothing in the text of the act or its evident purposes suggests Congress intended that role to be exclusive. As discussed in the context of express preemption, the enforcement framework established by the act does not use the language of exclusivity. (Ante, at p. 310.) The Court of Appeal noted the omission of a federal private right of action as a basis for inferring exclusivity, but the United States Supreme Court and this court have often explained that such an omission does not demonstrate Congress was opposed to enforcement under state law, and indeed sometimes may support the contrary inference, that preemption of state law claims was not intended. (Medtronic, Inc. v. Lohr, supra, 518 U.S. at p. 487 (plur. opn. of Stevens, J.) [the omission of a federal private right of action makes less plausible the inference that Congress intended the preemption of state
More generally, the overarching legislative scheme is difficult to reconcile with Herb Thyme‘s contention that Congress intended only “one expert umpire” to have a say. The regulatory regime the Organic Foods Act establishes is unlike that under, for instance, the Federal Food, Drug, and Cosmetic Act, where a single federal agency centrally regulates the dissemination of pharmaceuticals and tightly controls the exact wording of the disclosures that go with them. (
Herb Thyme expresses concern that absent preemption of Quesada‘s false advertising and unfair competition claims, whether its produce is organic would be evaluated by a lay jury applying a nebulous “reasonable consumer” standard. However, these claims are decided by a judge, not a jury. (Hodge v. Superior Court (2006) 145 Cal.App.4th 278, 284–285 [51 Cal.Rptr.3d 519]; People v. Witzerman (1972) 29 Cal.App.3d 169, 176–177 [105 Cal.Rptr. 284].) Moreover, given the express preemption of state standards for what qualifies as organic, a judge necessarily would decide whether Herb Thyme‘s produce is organic using the standards of the Organic Foods Act and its implementing regulations, as fully incorporated into state law. (See
Finally, Herb Thyme argues private suits like this one interfere with its federally established entitlement to label and sell its herbs as organic and conflict with federal control over who may, and may not, use the USDA organic label. However, certification is not a grant of a right to use an organic label on all one‘s products; neither certified nor uncertified growers are permitted to label as organic that which has not been produced in accordance with an approved organic plan. (
In sum: the complaint here alleges Herb Thyme has engaged in fraud by intentionally labeling conventionally grown herbs as organic, thereby pocketing the additional premiums organic produce commands. The purposes and objectives underlying the Organic Foods Act do not suggest such suits are an obstacle; to the contrary, a core reason for the act was to create a clear standard for what production methods qualify as organic so that fraud could be more effectively stamped out and consumer confidence and fair market conditions promoted. Nor does anything in the text or background of the act and its regulations indicate Congress intended remedial exclusivity
III. Primary Jurisdiction
In the alternative, Herb Thyme asks us to affirm on primary jurisdiction grounds. (See generally Nader v. Allegheny Airlines (1976) 426 U.S. 290, 303–304 [48 L.Ed.2d 643, 96 S.Ct. 1978]; Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 390 [6 Cal.Rptr.2d 487, 826 P.2d 730].) The trial court declined to rule formally on this argument, and the Court of Appeal did not address it. Consequently, although Quesada sought review as to both preemption and primary jurisdiction, we limited the issues when granting review and explicitly confined ourselves to the only matter developed below, federal preemption. We decline to address the applicability or inapplicability of the primary jurisdiction doctrine to this case, leaving it to the lower courts in the first instance in the event Herb Thyme chooses to pursue the argument.
DISPOSITION
We reverse the Court of Appeal‘s judgment and remand for further proceedings not inconsistent with this opinion.
Cantil-Sakauye, C. J., Chin, J., Corrigan, J., Liu, J., Cuéllar, J., and Kruger, J., concurred.