Allen v. ConAgra Foods, Inc.

• Court: District Court, N.D. California
• Decided: August 12, 2020
• Docket: 3:13-cv-01279
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ERIN ALLEN, et al., Case No. 3:13-cv-01279-WHO

8 Plaintiffs, ORDER GRANTING CONAGRA’S MOTION FOR SUMMARY 9 v. JUDGMENT

10 CONAGRA FOODS, INC., Re: Dkt. Nos. 295, 296, 297, 298, 299, 301, Defendant. 303, 312, 313, 320 11

12 13 The plaintiff classes seek to hold defendant Conagra Brands, Inc., f/k/a ConAgra Foods 14 Inc. liable under state law for the allegedly false and misleading label of Parkay Spray, which they 15 say uses artificially small serving sizes in order to disguise the true fat and calorie content. Now 16 before me are motions for summary judgment and motions to exclude expert testimony. I will 17 grant Conagra’s motion for summary judgment because there are no material disputes of fact 18 preventing a judgment that the plaintiffs’ claims are preempted. On this record, it is not possible 19 to conclude that Parkay Spray belongs in the butter, margarine, oil, and shortening reference 20 amount category under the federal regulations rather than the spray-type fat and oil category. As a 21 result, there is only one conclusion: the plaintiffs seek to impose state law requirements that are 22 not identical to the federal requirements. Their claims are preempted as a matter of law. 23 BACKGROUND 24 This case has a long and complicated history. For purposes of this order, it is sufficient to 25 outline briefly the parties’ respective positions on the issue of preemption. Conagra has argued 26 vehemently since this case’s inception that Parkay Spray is a spray-type fat and oil under the 27 federal regulations, while the plaintiffs have maintained that it is a butter substitute that belongs in 1 denied in part Conagra’s motion to dismiss Allen’s second amended class complaint. See Order 2 on Conagra’s Motion to Dismiss the Second Amended Complaint [Dkt. No. 231]. I determined 3 that the plaintiffs avoided preemption at that stage because they had properly alleged that Parkay 4 Spray was a substitute butter. I noted that Conagra could continue to raise the issue of preemption 5 as the case continued. 6 I certified several classes on July 22, 2019 but denied the plaintiffs’ motion to certify a 7 nationwide class. Dkt. No. 267. That decision impacted the jurisdictional analysis in my Order on 8 Conagra’s Motion to Dismiss, and on October 15, 2019, I reconsidered that Order, dismissed the 9 claims brought by the non-California named plaintiffs, and decertified the classes they 10 represented. Dkt. No. 280. That left only Allen, pursuing the following claims on behalf of the 11 following classes: (1) an individual state class of California consumers asserting claims for: (i) 12 fraud by concealment; (ii) breach of express warranty; (iii) intentional misrepresentation; (iv) 13 violation of California’s False Advertising Law; and (v) violation of the Consumers Legal 14 Remedies Act; (2) a subclass of California and Hawaii consumers asserting claims for: (i) 15 violation of California’s Unfair Competition Law and (ii) violation of Hawaii’s Unfair and 16 Deceptive Acts or Trade Practices Act1; (3) a quasi-contract/unjust enrichment claim brought by 17 Allen in her individual capacity. 18 On June 17, 2020, Conagra moved for summary judgment on numerous grounds, including 19 preemption.2 Motion for Summary Judgment (“MSJ”) [Dkt. No. 295]. I heard argument on July 20 22, 2020. Dkt. No. 325. 21 LEGAL STANDARD 22 Summary judgment on a claim or defense is appropriate “if the movant shows that there is 23 no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 24 law.” Fed. R. Civ. P. 56(a). In order to prevail, a party moving for summary judgment must show 25 the absence of a genuine issue of material fact with respect to an essential element of the 26 1 The plaintiffs pursue only injunctive relief on behalf of Hawaiian consumers. 27 1 nonmoving party’s claim, or to a defense on which the non-moving party will bear the burden of 2 persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has 3 made this showing, the burden then shifts to the party opposing summary judgment to identify 4 “specific facts showing there is a genuine issue for trial.” Id. The party opposing summary 5 judgment must present affirmative evidence from which a jury could return a verdict in that 6 party’s favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986). 7 On summary judgment, the court draws all reasonable factual inferences in favor of the 8 non-movant. Id. at 255. In deciding the motion, “[c]redibility determinations, the weighing of the 9 evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a 10 judge.” Id. However, conclusory and speculative testimony does not raise genuine issues of fact 11 and is insufficient to defeat summary judgment. See Thornhill Publ’g Co., Inc. v. GTE Corp., 594 12 F.2d 730, 738 (9th Cir. 1979). 13 DISCUSSION 14 I. SUMMARY JUDGMENT 15 The plaintiffs’ claims fail because there is no triable issue of material fact on the question 16 of preemption. The record contains insufficient support for the plaintiffs’ contention that Parkay 17 Spray is a butter or margarine substitute such that it belongs in the butter, margarine, oil, and 18 shortening category under the federal regulations. In fact, the plaintiffs’ own expert report 19 outlines the numerous numerous characteristics that distinguish Parkay Spray from butter and 20 margarine. Accordingly, the plaintiffs seek to impose food labeling requirements that are not 21 identical to federal law. 22 A. The Statutory Scheme 23 Federal law expressly preempts efforts to “directly or indirectly” impose state law 24 requirements that are “not identical to”—in other words, requirements that are differing from or 25 additional to—the federal nutrition labeling requirements provided for by the Nutrition Labeling 26 and Education Act (“NLEA”), which includes requirements related to serving sizes and nutrient 27 content claims. 21 U.S.C. § 343-1(a); 21 C.F.R. § 100.1(c)(4). The regulations include 1 customarily consumed per eating occasion.” Id. § 101.12(a)(1), 101.12(b). “The reference 2 amount is based on the major intended use of the food (e.g., milk as a beverage and not as an 3 addition to cereal).” Id. § 101.12(a)(7). In addition, “The reference amount for an imitation or 4 substitute food or altered food, such as a ‘low calorie’ version, shall be the same as for the food for 5 which it is offered as a substitute.” Id. § 101.12(d). 6 Two of these reference amount categories are at issue in this case. Conagra argues that 7 Parkay Spray belongs in the “Fats and Oils: Spray types” category with a reference amount of 8 0.25 grams, while the plaintiffs argue that it belongs in the “Fats and Oils: Butter, margarine, oil, 9 shortening” category with a reference amount of one tablespoon. See id. at § 101.12(b). “A 10 ‘substitute ‘food is one that may be used interchangeably with another food that it resembles, i.e., 11 that it is organoleptically, physically, and functionally (including shelf life) similar to, and that it is 12 not nutritionally inferior to unless it is labeled as an ‘imitation.’” 21 C.F.R. § 101.13(d). “As an 13 example, the FDA states that the food ‘no salt added’ canned corn resembles and for which it 14 substitutes is canned corn, not frozen corn.” Rahman v. Mott’s Ltd. Liab. Ps’hip, No. 13-cv-3482- 15 SI, 2014 U.S. Dist. LEXIS 11767, at *17-18 n.4 (N.D. Cal. Jan. 29, 2014) (citing 58 Fed. Reg. 16 3202, 2325 (Jan. 6, 1993)). 17 B. There is No Triable Issue with Respect to Preemption 18 Conagra renews its preemption arguments at the summary judgment stage, pointing 19 (among other things) to the absence of evidence supporting the conclusion that Parkay Spray is a 20 butter substitute. The plaintiffs counter that Parkay Spray must belong in the butter/margarine 21 category because (i) Conagra intends Parkay Spray to be used as a buttery topping, (ii) Conagra 22 markets Parkay Spray as an alternative to butter for foods like corn and bread, and (iii) consumers 23 in fact use Parkay Spray as a topping. As I detail below, on the record before me it is not possible 24 to conclude that Parkay Spray belongs in the butter, margarine, oil, shortening category. 25 According to the plaintiffs’ own expert Annette W. Hottenstein, numerous characteristics 26 distinguish Parkay Spray from butter and margarine. Declaration and Expert Report of Annette 27 W. Hottenstein (“Hottenstein Decl.”) [Dkt. No. 300-2]. On a scale of 0 (liquid oil) to 10 (solid fat 1 “10.” Id. Table 1. Parkay Spray has a significantly lower fat content than butter and margarine. 2 Id. Table 2. While Parkay Spray is dispensed through a pump, that would “probably not” be 3 possible for butter or margarine unless either “was very warm.” Deposition of Annette 4 Hottenstein (“Hottenstein Depo.”) [Dkt. No. 300-2] 242:2–6. Finally, Hottenstein gave Parkay 5 Spray a “9” with respect to intensity of hue, while butter and margarine both received a “2,” and 6 she described the hue as an “[i]ntense deep yellow color” by contrast with butter and margarine’s 7 “pale yellow color.” Hottenstein Decl. Table 1. 8 Further, according to Hottenstein Parkay Spray is unsuitable for use in food preparation, 9 which was the “major intended use” the FDA contemplated for butter, margarine, oil, and 10 shortening when it set their reference amount. When describing its adoption of the one-tablespoon 11 reference amount, the FDA described the butter, margarine, oil, and shortening grouping as 12 follows: Although butter and margarine are also used as spread, all four types 13 of fats and oils are used interchangeably in food preparation. Therefore, a uniform serving size for all four types of fats and oils 14 would be reasonable and would allow nutritional comparisons of different types of fats and oils. 15 16 56 Fed. Reg. 60394, 60407 (Nov. 27, 1991). According to the plaintiffs’ expert report, Parkay 17 Spray’s high-water content makes it a “relatively poor choice” for greasing baking pans. 18 Hottenstein Decl. ¶ 33. Parkay Spray is “unsuitable for baking” because using it would add too 19 much water to a recipe and not enough fat. Id. ¶ 34. Further, Parkay Spray is “a poor choice for 20 sautéing” foods because of its high water content and its milk solid ingredients. Id. ¶ 29; see 21 Hottenstein Depo. 240:11–20 (answering “In theory, yes” when asked whether butter was more 22 versatile than Parkay Spray, including in its ability to be a base for sauces). Finally, plaintiffs’ 23 expert ascribed a saltiness of “9” to Parkay Spray by contrast with a “3” for margarine and a “0” 24 for butter. Hottenstein Decl. Table 1. 25 Further, Hottenstein’s other comparisons between Parkay Spray and buttery spreads are 26 unpersuasive. The plaintiffs provide no justification for their substitutes-once-removed theory; in 27 other words, there is no authority to support their suggestion that, notwithstanding all of the 1 RACC because it is a substitute for a substitute for butter and margarine. On this record, there is 2 no doubt that butter and Parkay Spray cannot be “used interchangeably.” See 21 C.F.R. § 3 101.13(d). 4 Contrary to the plaintiffs’ argument, Conagra need not prove that Parkay Spray is a 5 cooking spray like Pam in order to win on preemption. The category at issue is not a “cooking 6 spray” category; it is a “Fats and Oils: Spray type” category. The plaintiffs’ repeated attempts to 7 equate the two miss the mark. Even assuming that cooking sprays are the exemplar product from 8 the spray-type category, Conagra need not prove that Parkay Spray is equivalent to a cooking 9 spray for preemption to bar the plaintiffs’ claims. Instead, the question before me now is whether 10 the plaintiffs’ claims seek to enforce state law requirements that are not identical to the federal 11 requirements. 12 The plaintiffs’ arguments about the unfairness of this result are not well taken. Neither 13 Conagra’s witness testimony nor its marketing strategies create a triable issue with regard to 14 preemption, nor do consumer complaints. These arguments are untethered to the federal guidance 15 on categorizing products for labeling purposes and the preemption analysis. Whether or not the 16 plaintiffs would ultimately be able to prove that the Parkay Spray label misleads or deceives 17 consumers in violation of California and Hawaii consumer protection laws, the federal regulations 18 set the standard for food labeling.3 19 On this record, it is not possible to conclude that Parkay Spray is a “substitute” that can be 20 “used interchangeably” with butter or margarine such that it belongs in the butter, margarine, oil, 21 and shortening category and is mislabeled under federal law. Accordingly, the plaintiffs’ claims 22 seek to enforce state law requirements that are “not identical to” federal food labeling 23 requirements. They are preempted. 24 Because Conagra is entitled to summary judgment, I need not address the remaining 25

26 3 Further, evidence suggests that the FDA has been made aware of the precise consumer concerns that the plaintiffs raise and declined to amend the spray type category. In 2016, the FDA 27 addressed comments complaining that “tiny serving sizes” allow cooking sprays “to make certain 1 substantive motions. The plaintiffs’ motion for partial summary judgment, Conagra’s motion to 2 decertify, and Conagra’s motion to exclude testimony of Hottenstein are DENIED. Dkt. Nos. 296, 3 297, 299. 4 II. SEALING 5 The Ninth Circuit applies a “compelling reasons” standard for sealing documents where 6 the “motion at issue is more than tangentially related to the underlying cause of action.” Auto 7 Safety v. Chrysler Group, 809 F. 3d 1092, 1099 (9th Cir. 2016). This district’s local rules require 8 that sealing requests be “narrowly tailored to seek sealing only of sealable material.” Civ. L. R. 9 79-5(b). Conagra requests sealing of various categories of information submitted with the pending 10 motions, including: (i) proprietary pricing and sales data, as well as some confidential financial 11 data (ii) marketing studies and business strategies, (iii) information about Conagra’s confidential 12 internal policies and procedures, (iv) personal consumer inquiries and private identifying 13 information. 14 I will deny the motions to seal without prejudice to Conagra filing a new motion that 15 accords with the following guidance. First, Conagra should make a greater effort to narrowly 16 tailor its redactions; requests to seal entire pages of deposition testimony and expert reports are 17 overbroad. See, e.g., Dkt. No. 301-12. Second, I will not seal the contents of consumer inquiries 18 and complaints to Conagra, although personally identifying information is sealable. See Dkt. No. 19 322-1; see also Dkt. Nos. 299, 319, 320-4 (including references to consumer feedback that are not 20 appropriate for sealing).4 Third, there are clearly not compelling reasons to seal some of the 21 information included in Conagra’s requests. By way of example, Dkt. No. 320-5 is a two-page 22 excerpt of a deposition transcript wherein Conagra’s Person Most Knowledgeable Chris 23 Chatzidakis describes the contents of the Parkay Spray label. Fourth, I will not seal any business 24 documents that are more than ten years old, no matter how confidential and proprietary they were 25 at the time of their creation. Fifth, Conagra must narrowly tailor its requests related to the way in 26 which its witnesses view Parkay Spray and consumers of Parkay Spray. While detailed research 27 1 data on its consumers is sealable, general testimony describing how the company markets the 2 product in light of its knowledge of consumers is not. See Dkt. No. 322-1. Any requests falling in 3 this category must be limited and supported by detailed and compelling justifications. 4 Any renewed motion shall be filed within 30 days. In it, Conagra should explicitly list 5 docket entries that it no longer seeks to maintain under seal. For example, the plaintiffs filed 50 6 exhibits under seal at Dkt. No. 301, and Conagra justifies sealing only with request to Exhibits 5, 7 12, 14, 16, 36, 41, and 42. See Dkt. No. 313. Further, Conagra should explicitly list any docket 8 entries that should be unsealed in their entirety as a result of the guidance I have provided in this 9 Order. There is no need to resubmit the briefs, declarations, or exhibits themselves until I have 10 reviewed Conagra’s narrowed requests. 11 With its renewed motion, Conagra should submit a proposed order in compliance with 12 Civil Local Rule 79-5(d)(1)(B). The table in the proposed order should include columns with (i) 13 the docket entry, page number, and lines associated with each request, (ii) a short, general 14 description of the contents, and (iii) the asserted justification for sealing with a citation to the 15 appropriate declaration. The proposed order should also include a list of docket entries to be 16 unsealed, as described in the preceding paragraph. Finally, the proposed order should provide a 17 list of docket entries that require resubmission in light of the narrowed redactions requested. 18 CONCLUSION 19 For the reasons set forth above, Conagra’s motion for summary judgment is GRANTED. 20 Dkt. No. 295. Judgment shall be entered accordingly. Conagra’s motion to decertify, Conagra’s 21 motion to exclude, and the plaintiffs’ motion for partial summary judgment are DENIED. Dkt. 22 Nos. 296, 297, 299. 23 All pending motions to seal are DENIED WITHOUT PREJUDICE. Any renewed motion 24 to seal shall be filed within 30 days and shall strictly comply with the guidance set forth above. 25 Finally, the plaintiffs’ request regarding Dkt. No. 299-1, which they inadvertently filed without 26 redactions, is GRANTED. Dkt. No. 303. Dkt. No. 299-1 will be permanently restricted and is not 27 1 considered part of the docket. 2 IT IS SO ORDERED. 3 Dated: August 12, 2020 4 . 5 liam H. Orrick 6 United States District Judge 4 8 9 10 11 12

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