Shavonda Hawkins, on behalf of herself and all others similarly situated, Plaintiff-Appellant,
v.
The Kroger Company, Defendant-Appellee.
Argued
and Submitted December 7, 2017 Pasadena, California
Appeal
from the United States District Court for the Southern
District of California D.C. No. 3:15-cv-02320-JM-BLM Jeffrey
T. Miller, Senior District Judge, Presiding
Gregory S. Weston (argued) and David Elliot, The Weston Firm,
San Diego, California, for Plaintiff-Appellant.
Jacob
M. Harper (argued) and Nicole S. Phillis, Davis Wright
Tremaine LLP, Los Angeles, California, for
Defendant-Appellee.
Before: Marsha S. Berzon and Jacqueline H. Nguyen, Circuit
Judges, and Frederic Block, [*] District Judge.
SUMMARY[**]
Preemption
/ Standing / Product Labels
The
panel reversed the district court's Fed.R.Civ.P. 12(b)(6)
dismissal of plaintiff's putative consumer class action
alleging that The Kroger Company sold Kroger Bread Crumbs
that included misleading labels in violation of California
law.
Plaintiff
alleged that she purchased the bread crumbs by relying on
information contained on the face of the label that the
product contained "0g Trans Fat per serving."
Plaintiff further alleged that contrary to the claim on the
label, the bread crumbs "contained artificial trans
fats, and caused heart disease, diabetes, cancer, and
death."
Concerning
plaintiff's claim under California law of reliance on
misleading labels, the panel held that plaintiff had standing
because she adequately alleged that she relied on the
label's misrepresentations and would not have purchased
the product without those misrepresentations. The panel also
held that the label statement "0g Trans Fat per
serving" was not preempted by federal regulations.
Specifically, the panel noted that the federal Food and Drug
Administration ("FDA") regulations at issue
involved two categories: rules contained in 21 C.F.R. §
101.9 governing what must be stated within the Nutrition
Facts Panel; and rules governing "nutrient content
claims." The panel applied the holding in Reid v.
Johnson & Johnson, 780 F.3d 952, 960 (9th Cir. 2015)
(holding that the statement "No Trans Fat" was not
allowed outside the Nutrition Facts Panel since the product
did contain trans fat, notwithstanding that the Panel
reported it contained 0g trans fat), and held that a consumer
reading the label in this case could be misled, similarly,
into believing that the product was free of trans fat. The
panel further held that the federal regulations also
bolstered their conclusion in this case. The panel concluded
that because the FDA regulations did not authorize the
contested statement, plaintiff's labeling claims were not
preempted.
Concerning
plaintiff's "use claims" under California law -
that it was illegal to include trans fat in products since it
was not for human consumption and an unlawful food additive -
the panel held that plaintiff had statutory standing for the
same reason she had statutory standing to bring her labeling
claims. The panel further held that the issue of whether the
claim was federally preempted by a Food and Drug
Administration 2015 Final Determination on the subject was
not addressed by the district court and not fully briefed on
appeal. The panel declined to exercise its discretion to
consider the issue, and remanded to the district court to
decide in the first instance to what extent, if at all, the
state law use claims were federally preempted.
OPINION
BLOCK,
DISTRICT JUDGE
Trans
fat has become increasingly recognized as a dangerous
substance and a leading cause of numerous serious ailments,
including heart disease and diabetes. Food and Drug
Administration ("FDA") regulations govern the
information reported within a food product's Nutrition
Facts Panel on the product's label.[1] As for trans fat,
FDA regulations provided, at all relevant times, that if the
product contained "less than 0.5 gram" trans fat,
as it did in this case, it was required to tell the consumer
on the Nutrition Facts Panel that it contained 0 grams trans
fat, even though it contained this dangerous food additive.
We are
asked to determine, inter alia, whether these FDA
trans fat regulations governing the contents of the Nutrition
Facts Panel preempt California's unfair competition laws
proscribing false or misleading advertising elsewhere on a
food product's label. We hold that they do not;
accordingly, the plaintiff can challenge the legitimacy of
defendant's product advertising on the face of the label
that it contains "0g Trans Fat per serving." In
doing so, we take the occasion to reinforce and apply our
holding in Reid v. Johnson & Johnson that
"a requirement to state certain facts in the nutrition
label is not a license to make that statement
elsewhere on the product." 780 F.3d 952, 960 (9th
Cir. 2015) (emphasis added).
I
Hawkins'
complaint alleges the following:[2] The Kroger Company
("Kroger") sells Kroger Bread Crumbs
("KBCs") in stores in California, including the
supermarket chain Ralph's. Hawkins regularly purchased
KBCs at several Ralph's locations between 2000 and 2015.
In making the purchases, she relied on the information
contained on the face of the label that the product contained
"0g Trans Fat per serving." In August 2015, she
discovered that, contrary to the claim on the label, KBCs
"contained artificial trans fat, and caused heart
disease, diabetes, cancer, and death."[3]
In
October 2015, Hawkins brought a putative class action against
Kroger seeking to represent a class of consumers who were
misled by the label ("the labeling claims") and had
used the dangerous product ("the use claims"). The
complaint alleged violations of the California Unfair
Competition Law ("UCL"), Cal. Bus. & Prof. Code
§ 17200 et seq., False Advertising Law
("FAL"), Cal. Bus. & Prof. Code § 17500
et seq., Consumer Legal Remedies Act
("CLRA"), Cal. Civ. Code § 1750 et
seq., and common law claims for breach of implied
warranty of merchantability and breach of express warranty.
It sought damages, pre-judgment and post-judgment interest,
injunctive[4] and declaratory relief, attorneys'
fees, and costs.
The
district court granted Kroger's Rule 12(b)(6) motion to
dismiss, with prejudice, holding that Hawkins lacked standing
to bring these claims, and, alternatively, that the labeling
claims were preempted by federal law.
The
district court reasoned that plaintiff lacked standing to
bring her labeling claims because it believed that she did
not allege that she read the "0g Trans Fat per
serving" label on the face of the label and therefore
could not establish reliance or injury. It alternatively held
that the labeling claims were preempted.[5] The district
court dismissed Hawkins's use claims for lack of standing
because her alleged injuries were too speculative. The
district court did not address whether the use claims would
be preempted.
Because
we disagree with all of the district court's holdings, we
reverse and remand for further proceedings.
II
"We
review de novo a district court's order granting a motion
to dismiss on preemption grounds, for lack of standing, or
for failure to state a claim upon which relief can be
granted." Reid, 780 F.3d at 958.
A.
Labeling Claims
1.
...