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Quesada v. Herb Thyme Farms, Inc.: Why You Should Care and Where We Stand

VX | English

Quesada v. Herb Thyme Farms, Inc.: Why You Should Care and Where We Stand

Victoria X

When we buy a product that is labeled as “USDA 100% Organic,” we assume that it is in fact organic.  What if you find out that the “organic” product you have been paying a premium for for years is, in fact, not organic?  Can you claim damages from the producer for its deceptive labeling?  No, according to the California Court of Appeal on Dec. 23, 2013.  In Quesada v. Herb Thyme Farms, Inc., the only recourse you have against the scrupulous producer is to report to the USDA, which will then, upon finding of the producer’s violation, levies a civil penalty of no more than the meager amount of $10,000 and/or revoke the producer’s certification.  Despite of the availability of private remedies afforded by the stronger California consumer protection law, the court ruled that the federal Organic Foods Production Act (OFPA) preempts (i.e. invalidates) state consumer claims; the private remedies, therefore, cannot be enforced.

On October 07, 2015, the Supreme Court of California will review the Court of Appeal’s ruling.  We ask the Supreme Court to reverse the Court of Appeal’s ruling because OFPA does not manifest its intent to ban state consumer claims against the violation of parallel state laws.  The requirements of preemption, therefore, have not been satisfied.

Why you should care

The case has broader implications than your consumer right to seek damages from the fraudulent organic food producers.  Preemption based on a sweeping interpretation of OFPA would not only immunize deceptive food producers from state consumer claims, leaving consumers without redress, but also intrude upon state sovereignty.  The statutory construction will have an implication on interpretation of the scope of other federal consumer protection regulations, such as meat inspection and medical device approvals.  The ruling ought to be reversed to avoid frustrating our fundamental dual federal-state system and to reserve people’s say on consumer protection within their state that would promote, not hinder, the compliance with the federal standard. 

Here is the legal basis for our argument:

Introduction

The California Supreme Court is reviewing whether Quesada’s consumer claim under the California Organic Products Act of 2003 (COPA) (Food & Agricultural Code, section 46000 et seq.; Health & Safety Code, section 110810 et seq.) is preempted by the Organic Foods Production Act of 1990 (OFPA) (7 U.S.C section 6501 et seq.). The California Court of Appeal has erroneously found that federal law is intended to preempt state’s rights to provide additional remedial opportunities to persons affected by violations of federal standards that have been replicated in state law. We maintain that consumer claims predicated on COPA are not preempted because COPA imposes identical requirements as OFPA and OFPA manifests no clear intention of Congress to expressly or impliedly preclude traditional consumer protections afforded by the states. 

Facts

With rising incentives to sell organic products, Herb Thyme Farms, a federally-approved state organic producer in California, deceptively mislabeled packages containing a mixture of conventionally and organically grown herbs as “100% Organic” and “USDA Organic.” On behalf of trusting consumers, Michelle Quesada filed class and representative actions against Herb Thyme, which were incorrectly dismissed on appeal on the ground that OFPA preempts COPA.

The Law

Federal laws which govern matters that are traditionally within the police power of the states do not preempt additional remedies afforded under the parallel state laws so long as Congress provides no clear indication of its intention to preclude such remedies and the requirements of parallel state law do not conflict with the purpose of the federal law.  The doctrine of preemption, which originates with the Supremacy Clause of the United States Constitution (Article 6, Clause 2), holds that federal statutes are intended to supplant state statutes only where it is explicitly stated by Congress or where the court discerns that the legislature intended to implicitly preempt state law through interpretation of the impacts and intention of the law’s language. Explicit preemption is plainly stated in the language of a federal law and demands that through passage of the legislation any state or local laws that do not uphold the same minimum requirements are unconstitutional and replaced by the new federal standard. For areas of law which are viewed as a historic police authority of the state, explicitly stated preemption is required to nullify additional state enforcement mechanisms. Implicit preemption must meet one of three criteria that Congress intended for the federal law to be the sole regulatory standard surrounding a given issue without the need or desire for states to supplement it in any manner, that compliance with both state and federal laws is rendered an impossibility due to conflicting requirements, and where the state statute poses an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Courts should interpret such instances of implicit preemption with a firm commitment to upholding the inherent rights of states as the penultimate sovereigns of their territory by only preempting laws that truly conflict with the intentions of the nation’s legislative branch. While state laws must provide for identical standards as federal laws, states have the right to expand beyond the minimum standards applied by Congress to provide their residents with additional remedies and protections.

Where the law comes from

The court uniformly acknowledges the requirements of the doctrine of preemption, including the necessity for explicit preemption for questions of traditional state enforcement authority and the three criteria for determining implicit preemption (Farm Raised Salmon Cases, 42 Cal. 4th 1077; Cal.Rptr.3d 112; 175 P.3d 1170 (2008)). In Farm Raised Salmon, the court held that private actions under state laws that impose identical requirements regarding the disclosure of the use of artificial coloring is not preempted by the federal provision barring private enforcement of only the federal law.  As Congress clearly stated through s. 343-1 in its legislation (21 U.S.C. § 343-1), its intent was to allow states to establish their own identical laws and it “said absolutely nothing about proscribing the range of available remedies states might choose to provide for the violation of those laws, such as private actions,” the court held that private enforcements of federal requirements under state laws are not preempted.

In Medtronic v. Lohr, a woman’s pacemaker failed requiring emergency surgery. She subsequently sued the manufacturer of the device for negligent design. The court held that common law claims against the manufacturer alleging negligent design were not pre-empted by the federal law (Medtronic v. Lohr, 518 U.S. 470; 116 S. Ct. 2240; 135 L. Ed. 2d 700 (1996)). The court held that the federal statute, which precludes states from enacting any requirement which is “different from, or in addition to” any federal requirements without the approval from the FDA, does not deny a state the right to provide additional, traditional remedies for violations of federal standards, when those duties mirror federal requirements.  In determining whether common-law cause of action is a “requirement” which imposes duties “different from, or in addition to” the generic federal standards, the court focuses on the overall purpose of the statute instead of the plain language of the provision.  The court reasoned that because the purpose of the federal statute was to ensure safety and effectiveness of medical devices intended for human use, the broad reading of s.360(k) of the FDA to preempt all common-law claims was “implausible,” as such construction would have “the perverse effect of granting complete immunity from design defect liability to an entire industry,” which would run afoul of the statute’s purpose.  The court concluded that matter which the states have the historic primacy, the assumption is that the “States’ historic police powers cannot be superseded by a Federal Act unless that is Congress’ clear and manifest purpose.”  Medtronic failed to demonstrate Congress’ intent to preempt historic police power.

Discussion

No express preemption

Private enforcement under COPA is not expressly preempted as OFPA does not explicitly preclude remedies afforded by traditional state consumer protection laws; the silence on matters traditionally governed by the states implies non-preemption. Organic food certification is part of public health and safety that the state traditionally police as states historically maintain the responsibility and capacity “to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons" (Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 756, 85 L. Ed. 2d 728, 105 S. Ct. 2380 (1985)) and “[v]irtually every state in the nation permits one or more nongovernmental parties to enforce state . . . laws of general applicability prohibiting deceptive or unfair acts and practices in the marketplace.” (Annot., Right to Private Action Under State Consumer Protection Act—Preconditions to Action (2004) 117 A.L.R.5th 155.). Given the states’ traditional police power to provide for private remedy over matters of public health and safety, OFPA’s failure even to hint at its intention to preempt private remedy afforded by traditional state law is “spectacularly odd” (Medtronic v. Lohr, 518 U.S. 470; 116 S. Ct. 2240; 135 L. Ed. 2d 700 (1996)), especially when Congress is presumably aware of the availability of private remedies under state consumer protection laws. In fact, OFPA’s explicit override of pre-existing state organic certification programs while remaining silent over remedies afforded by traditional state consumer protection laws is evidence of implied non-preemption.  Without clear language prohibiting private action under state consumer protection laws, legislative power which historically resides with the states remains intact. OFPA failed to demonstrate an intention to proscribe the range of alternative remedies, which states might provide, limiting the scope of OFPA’s authority to the plain language of the statute.

No field preemption

 The doctrine of field preemption does not bar state consumer claims as Congress left plenty of room for the states to supplement its remedial framework with additional consumer protections. This inadequacy in the federal statutes demonstrates that Congress did not intend for OFPA to completely displace states from the field of organic food regulation.  OFPA permits each state “to implement a state organic certification program” (7 U.S.C. s. 6503) and “[to] provide for appropriate and adequate enforcement procedures, as determined by the Secretary to be necessary and consistent” with OFPA (7 U.S.C. s. 6506(a)(7)).  State organic certification program approved under OFPA may “contain additional guidelines governing the production or handling of products sold or labeled as organically produced in such State as required in section 2108” (7 U.S.C. s. 6506(d)).  OFPA allows states to implement a certification program that contains “more restrictive requirements governing certification” (7 U.S.C. s. 6507(b)), provided that it is approved by the Secretary.  Although the Secretary retains the oversight power to ensure states’ compliance with the national standard, the oversight power itself does not manifest Congress’ intention of a sweeping preemption of traditional state law remedies.  It would be incongruent with this doctrine if OFPA intended to permit states to enact paralleled and more restrictive laws on the one hand (7 U.S.C ss.6503 and 6507), but precluded states from providing enforcement for violation of those laws, which sole purpose is to fortify OFPA’s objective in providing a consistent organic standard.

The USDA’s administrative power to enforce noncompliance is not evidence of Congress’ intent to dominate cavalierly domains of enforcement traditionally occupied by the states, but rather an indication of the limited scope of USDA. Given the strong presumption against preemption, unless the court can "identify the domain expressly pre-empted" by the language of the statute (Medtronic v. Lohr, 518 U.S. 470; 116 S. Ct. 2240; 135 L. Ed. 2d 700 (1996)) , the scope and existence of preemption are limited to the explicit language of the statute. Based on the ample of room OFPA leaves for states to supplement the implementation and enforcement of the organic certification program and OFPA’s lack of express language precluding supplemented state remedies, it is reasonable to conclude that Congress intended to establish a floor, not a ceiling, for the implementation and enforcement of the organic certification program.

No conflict preemption

Private enforcement under COPA, which provides for identical requirements as OFPA, does not make the compliance with both federal and state law impossible nor does it pose an obstacle to the achievement of congressional objectives.  OFPA’s explicit permission for states to implement additional requirements and enforcement procedures indicates Congress’ intention to not pervasively dominate the field of public health and safety traditionally policed by the states.  Rather than impeding the compliance of OFPA as the respondent has alleged, traditional remedies afforded by state consumer protection laws that OFPA does not expressly preclude boost the compliance ofOFPA.

COPA imposes identical requirements

Like s. 343-1 in Farm Raised Salmon, OFPA permits each state to implement a state organic certification program (7 U.S.C. s. 6503).  Similar to the Sherman Law provision in Farm Raised Salmon which incorporates all of the food labeling regulations promulgated by the FDA (Health & Saf. Code, § 110100, subd. (a)) and which the court held as the basis of state laws imposing identical requirements, COPA contains a provision adopting identical federal requirement to the states: “All organic food or product regulations and any amendments to those regulations adopted pursuant to the federal Organic Foods Production Act of 1990 (7 U.S.C. Sec. 6501 et seq.)…shall be the organic food and product regulations of this state.” (Health & Saf. Code, § 46002 (a)).  All state organic certification programs, as a matter of fact, must be approved by the USDA in order to ensure its compliance to the national organic standard (7 U.S.C. s. 6507).  Since COPA provides for identical requirements as OFPA and in the absence of express language prohibiting state private remedies, the states are “free to provide for private remedies for violations of those requirements” (Farm Raised Salmon Cases, 42 Cal. 4th 1077; Cal.Rptr.3d 112; 175 P.3d 1170 (2008)).

Purpose of OFPA is not frustrated by the additional remedies under COPA

The purpose of OFPA is to establish a consistent national organic certification standard that can facilitate interstate commerce of organic food (7 U.S.C.S. § 6501). OFPA achieves this purpose by establishing a National Organic Standards Board and a detailed National List enlisting non-organic substances that can be approved for use in organic products (7 U.S.C.S. § 6517).  Given the level of detail provided by the USDA on the constitution of the national organic standard and USDA’s oversight power, it would be difficult for private enforcement to create “the inevitable divergence in applicable state laws” raised by the Court of Appeal (Quesada v. Herb Thyme Farms, Inc., 222 Cal. App. 4th 642, at p.11).  As the court in Aurora pointed out, preemption of state consumer protection law “may actually diminish consumer confidence that organic products meet consistent standards as consumers become aware that otherwise meritorious claims are being preempted because the certifying agent has not suspended the certification in spite of clear facts to the contrary.” (Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig. v. Aurora Organic Dairy (8th Cir. 2010) 621 F.3d 781 at p. 20).  “Similarly,” the court continued, “although broad factual preemption may increase organic production in the short term, consumers may well elect to avoid paying the premium for organic products upon realizing preemption grants organic producers a de facto license to violate state fraud, consumer protection, and false advertising laws with relative impunity, because the OFPA's only remedy for noncompliance is recourse to the USDA for revocation of certification and possibly for a civil penalty.” As in Medtronic, where the court held that the presence of a state damage remedy “merely provides another reason for manufacturers to comply with identical existing ‘requirements’ under federal law,” private remedy under COPA bolsters, rather than impedes, the compliance of the national organic standard.

The Court of Appeal erred in reasoning that the existence of a remedial scheme under OFPA indicates the clear congressional intent to provide “exclusive federal and state government prosecution” and therefore private remedies would conflict with OFPA’s purpose (Quesada (Michelle) v. Herb Thyme Farms, Inc., 222 Cal. App. 4th 642 at p. 2.)  It relied on Aurora, which asserted that because certification requirements and compliance are interrelated, all state claims that interfere with the certification program are preempted.  While OFPA may limit the enforcement of the OFPA through the remedial scheme, traditional state remedies cannot be preempted unless there is a clear manifestation of Congress’ intent to do so.   As the court in Medtronic explained, the general state common-law requirements are “not the kinds of requirements that Congress and the FDA feared would impede the ability of federal regulators to implement and enforce specific federal requirements.” (Medtronic v. Lohr, 518 U.S. 470; 116 S. Ct. 2240; 135 L. Ed. 2d 700 (1996) at p. 21).   “Requirements,” as the Medtronic court posited, “did not have nearly the pre-emptive scope nor the effect on potential remedies,” for such sweeping interpretation of Congress’ intention to preempt would produce “a serious intrusion into state sovereignty” and frustrate the dual state-federal regime that this country relies on.  (Medtronic v. Lohr, 518 U.S. 470; 116 S. Ct. 2240; 135 L. Ed. 2d 700 (1996) at p. 14.)  The mere existence of a federal remedial scheme does not prohibit states from providing additional avenues of redress.  Absent from the express language to exclude private remedies under state laws, the doctrine of preemption dictates that the remedies afforded by the state are not preempted.

Conclusion

The respondent does not overcome the presumption of non-preemption for legislative power that traditionally resides with the states.  As COPA imposes requirements parallel to OFPA’s requirements, and the additional remedies afforded by state laws do not frustrate OFPA’s purpose to establish a consistent national organic standard, OFPA cannot preempt private enforcement under COPA to the extent that OFPA does not expressly preclude such cause of action. 

The court should find no viable precedent denying states the inherent authority to provide additional courses of remedy for its residents for statutes which reinforce federal requirements as long as state statutes do not conflict with the federal legislation’s purpose, or pose an obstacle to the federal legislation’s implementation.  The sweeping interpretation of Congress’ intent deviated from the doctrine of preemption would seriously disturb the regime of dual state-federal regulation. The court should reverse the findings of the appellate court.