New York Federal Court Rejects Preemption and Primary Jurisdiction Arguments in “All Natural” Case
In our February 12, 2014 post, entitled “Consumer Class Actions Trending From Attacking ‘All Natural’ to ‘Raw,’” we addressed whether claims challenging consumer product advertising as “all natural” were preempted in the absence of specific guidance from the FDA and the mixed results the argument has produced. In Ault v. J.M. Smucker Co. et al., 2014 WL 1998235 (S.D.N.Y. May 15, 2014), the Court denied a motion to dismiss based on preemption and primary jurisdiction where the plaintiff alleged that it was deceived into purchasing Smucker’s Crisco oil by “all natural” advertising where the product contained genetically modified organisms, or GMOs, because the FDA has not addressed the use of the term “all natural” in this context.
Smuckers argued that FDA policies regarding the use of the term “natural” preempt state law false advertising claims based on this language, even if those policies are informal. However, the Court found, “no federal specifications exist here.” Id. at *3. And “[e]ven if an informal FDA definition does exist, the term ‘natural’ ‘may be used in numerous contexts and may convey different meanings depending on that context” [citation,] [and] “that is one of the reasons the FDA has never adopted a formal definition.” Id. (citing Pelayo v. Nestle USA, Inc.,<"> No. CV 13–5213, 2013 WL 5764644, at *5 (C.D.Cal. Oct. 25, 2013)). In addition, “the FDA has declined to consider the specific issue here: whether and under what circumstances food products containing ingredients produced using genetically engineered ingredients may or may not be labeled ‘natural.’” Id. (citation and some internal quotation marks omitted). “As a result,” the Court found, “any general, informal FDA guidance is not controlling.” Id. (citing In re Frito–Lay N. Am., Inc. All Natural Litig., No. 12–md–2413,2013 WL 4647512, at *10 (E.D.N.Y. Aug. 29, 2013)).
The Court also rejected Smucker’s argument that the FDA’s decision not to impose a labeling requirement for foods with GMOs supports preemption, stating, “[i]n effect, Defendant interprets the FDA’s lack of action as approval for Defendant’s use of the phrase ‘All Natural’ to describe foods containing GMO [but] [i]n reality, the FDA has stayed silent because it ‘operates in a world of limited resources’ where it ‘must prioritize which issues to address.’” Id. (citation omitted.)
In addition, the Court found Smucker’s primary jurisdiction argument unavailing: “three federal district judges previously referred the question of whether foods containing GMOs may be labeled ‘natural’ to the FDA under the primary jurisdiction doctrine [and on] January 6, 2014, the FDA responded and explicitly declined to make such a determination.” Id. at *4 (citing January 6, 2014 FDA Letter). “The FDA’s refusal to consider the question demonstrates that ‘resort to the agency at this time would be unavailing,’ [citation] and therefore weighs against applying the primary jurisdiction doctrine.” Id.
This case signals that, until the FDA acts, preemption and primary jurisdiction arguments against “all natural” advertising of products with GMOs may be more and more challenging.