In a much anticipated ruling (opinion found here), yesterday the Third Circuit revived a consumer class action against the maker of Snapple, holding that FDA did not preempt a review under state law of whether Snapple’s claims that its drinks are “all natural” was misleading because they (used to) contain corn syrup.
The New Jersey trial court dismissed the case (opinion found here) because of implied preemption or that “FDA regulations so thoroughly occupy the field of beverage labeling at issue in this case that it would be unreasonable to infer that Congress intended states to supplement this area.” The law of field preemption took multiple hits after the dismissal, including the Third Circuit’s decision on Fellner v. Tri-Union Seafoods allowing a class action regarding failure to warn over mercury in tuna, the Supreme Court’s Wyeth v. Levine decision involving field preemption in failure-to-warn cases involving pharmaceuticals, and Obama’s May memo urging restraint by feds in preempting state law. The panel first noted there was a strong presumption against preemption that Snapple had to overcome and that states had been regulating in the area of food and beverage labeling and branding long before the FDA ever got into the game. The Court did not expressly decide whether the Nutrition Labeling and Education Act (NLEA) expressly preempted the state claim challenge, concluding the issue was not properly before it. It did note, however, that the NLEA “regulated only what a company must place on a label, [Plaintiff’s] claims go to what a company cannot put on a label for the purposes of commercial marketing, an important distinction.” It next concluded that there was no implied preemption or field preemption at issue because Congress had not clearly and manifestly concluded that this is an area that leaves no room for state law and they were “reluctant to find field preemption predicated solely on the comprehensiveness of federal regulations.” Finally, the court did not find implied conflict preemption based on the FDA’s policy statement regarding “natural” or based on its opinion letter that high fructose corn syrup could be termed “natural,” concluding that these determinations were not the result of “formal, deliberative process.” The weight the trial court gives to this evidence on remand as the case moves forward will be of considerable interest to all food and beverage marketers.
The class rep initially alleged the tagline “Made from the Best Stuff on Earth” was false and misleading as well, but amended the complaint to remove these allegations. It is almost as refreshing as a glass of Snapple Pink Lemonade that she recognized puffery when she saw it!
