United States: California Sherman Law Regulations Of Labeling Not Pre-Empted

Nathan A Adams IV is a Partner in Holland & Knight's Tallahassee office

In In re Trader Joe's Tuna Litigation, No. 2:16-cv-01371, 2017 WL 4442918 (C.D. Cal. Oct. 3, 2017), plaintiffs sued under California's Sherman Law and New York's General Business Laws after they concluded that Trader Joe's tuna cans are allegedly underfilled and underweight. The court determined that the plaintiffs' claims are not impliedly pre-empted by the Federal Food, Drug and Cosmetic Act because the California Sherman Law regulations prohibiting the misbranding of food run parallel to, but independent of, its requirements. The court ruled otherwise as it relates to New York law. The court declined to apply the primary jurisdiction or equitable abstention doctrine and wait for the U.S. Food and Drug Administration (FDA) to act because of the FDA's delay and because the plaintiffs' claims do not involve consideration of complex economic policy. The defendant next argued that the plaintiff's claims should be dismissed because they fail to allege that a reasonable consumer would be deceived, but the court ruled this is not the standard under the "unlawful prong" of the California law, as compared to the "fraudulent and unfair prongs"; rather, the plaintiff sufficiently pleaded 1) a predicate violation and 2) accompanying economic injury caused by that violation. For the fraudulent and unfair prongs, the court determined that, inter alia, a reasonable consumer would expect that the tuna she purchases complies with labeling requirements that are meant to inform consumers of the amount of tuna and water or oil in the can. The plaintiffs failed to provide reasonable pre-suit notice of their breach of express warranty claims and their negligent misrepresentation claim was barred by the economic loss rule, but their unjust enrichment and breach of implied warranty of merchantability claims survived.

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