Quesada v. Herb Thyme Farms, Inc.

361 P.3d 868, 62 Cal. 4th 298, 195 Cal. Rptr. 3d 505, 2015 Cal. LEXIS 9481
CourtCalifornia Supreme Court
DecidedDecember 3, 2015
DocketS216305
StatusPublished
Cited by36 cases

This text of 361 P.3d 868 (Quesada v. Herb Thyme Farms, Inc.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quesada v. Herb Thyme Farms, Inc., 361 P.3d 868, 62 Cal. 4th 298, 195 Cal. Rptr. 3d 505, 2015 Cal. LEXIS 9481 (Cal. 2015).

Opinion

Opinion

WERDEGAR, J.

To buyers and sellers alike, “labels matter.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 328 [120 Cal.Rptr.3d 741, 246 P.3d 877].) They serve as markers for a host of tangible and intangible *303 qualities consumers may come to associate with a particular source or method of production. {Id. at pp. 328-329.) Misrepresentations in labeling undermine this signifying function, preventing consumers from correctly identifying the goods and services that carry the attributes they desire while also hampering honest producers’ attempts to differentiate their merchandise from the competition.

Among those labels Kwikset cited as making a difference to some consumers, and as potentially actionable under state unfair competition law if misused, was the designation of produce or other food as “organic.” (Kwikset Corp. v. Superior Court, supra, 51 Cal.4th at pp. 332-333.) Here we must decide whether such a state law claim is viable, or whether the federal regulatory regime for certifying organic growers preempts a state claim that a certified grower is intentionally mislabeling conventionally grown produce and selling it as organic.

We hold a state law claim that produce is being intentionally mislabeled as organic is not preempted. When Congress entered the field in 1990, it confined the areas of state law expressly preempted to matters related to certifying production as organic, leaving untouched enforcement against abuse of the label “organic.” Moreover, a central purpose behind adopting a clear national definition of organic production was to permit consumers to rely on organic labels and curtail fraud. Accordingly, state lawsuits alleging intentional organic mislabeling promote, rather than hinder, Congress’s purposes and objectives. Because the Court of Appeal concluded to the contrary, finding these state fraud claims impliedly preempted, we reverse its judgment.

Procedural and Factual Background

This case is a putative class action challenging an herb grower’s marketing of its herbs as organic. Because this appeal follows the granting of a motion for judgment on the pleadings (Code Civ. Proc., § 438), we accept as true the allegations of the complaint (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 166 [59 Cal.Rptr.3d 142, 158 P.3d 718]).

Defendant Herb Thyme Farms, Inc. (Herb Thyme), is a large herb-growing operation with multiple farms throughout California. Most of its farms use conventional growing methods, but one of its farms uses organic processes and has been properly certified by a registered certifying agent. When it comes time for distribution and marketing, however, Herb Thyme brings its conventionally grown and organic herbs to the same packing and labeling facility, processes them together, and sends blended conventional and organic herbs out under the same “Fresh Organic” label and packaging. As well, Herb Thyme packages and labels as organic some herbs that are entirely conventionally grown.

*304 Plaintiff Michelle Quesada is a consumer who purchased Herb Thyme herbs at a premium in the belief they were, in fact, 100 percent organic. Her suit, filed as a class and representative action, challenges as false advertising and unfair competition Herb Thyme’s practice of selling conventionally grown herbs under an organic label. The operative complaint, the second amended complaint, alleges violations of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.), unfair competition law (Bus. & Prof. Code, § 17200 et seq.), and false advertising law (Bus. & Prof. Code, § 17500 et seq.).

Herb Thyme sought judgment on the pleadings on federal preemption and primary jurisdiction grounds. The Organic Foods Production Act of 1990 (7 U.S.C. §§ 6501-6522; Organic Foods Act), Herb Thyme argued, vests the United States Department of Agriculture (USDA) with exclusive authority to regulate the labeling and marketing of organic products and both expressly and impliedly preempts state truth-in-advertising requirements. In the alternative, Herb Thyme asked the trial court to defer action under primary jurisdiction principles unless and until an administrative complaint had been pursued through the USDA. The trial court agreed with both express and implied preemption arguments and entered a defense judgment.

The Court of Appeal affirmed. It disagreed with the trial court’s finding of express preemption, reasoning that the express preemption provisions in the Organic Foods Act limited state organic certification programs but did not foreclose state false advertising suits. However, it agreed such suits were a potential obstacle to Congress’s purposes and objectives of establishing uniform national standards for organic production and labeling, and thus impliedly preempted.

We granted review to consider these preemption questions.

Discussion

I. State and Federal Regulation of Organic Products

The “first [use of] the word ‘organic’ to describe a method of farming in which the farmer strove for improved natural soil condition through the use of natural additions of manure and compost and the avoidance of chemical amendments” traces to the 1940s, perhaps not coincidentally the time when use of synthetic pesticides first became widespread. (Watnick, The Organic Foods Production Act, the Process/Product Distinction, and a Case for More End Product Regulation in the Organic Foods Market (2014) 32 UCLA J. Envtl. L. & Pol’y 40, 45 & fn. 20 (Watnick); see Pasquinelli, One False Move: The History of Organic Agriculture and Consequences of NonCompliance with the Governing Laws and Regulations (2010) 3 Golden *305 Gate U. Envtl. L.J. 365, 368 & fn. 13.) Sales of organic products remained a niche industry for another generation, but by the 1970s a broader market for organic food had begun to emerge. (Note, The Organic Foods Production Act of 1990 and Its Impending Regulations: A Big Zero for Organic Food? (1997) 52 Food & Drug L.J. 537, 538 (Note); Lathrop, Pre-empting Apples with Oranges: Federal Regulation of Organic Food Labeling (1991) 16 J. Corp. L. 885, 886 (Lathrop).)

This nascent unregulated market was not without its problems. For one, the absence of any uniform, agreed-upon standards created consumer confusion: “Even the most sophisticated organic consumer finds it difficult to know, with certainty, what the term ‘organic’ really means.” (Sen.Rep. No. 101-357, 2d Sess., p. 289 (1990), reprinted in 1990 U.S. Code Cong. & Admin. News, p. 4943.) For another, the combination of consumers willing to pay a premium for organic products and the absence of definite standards created incentives for sharp practices. (Id. at pp. 289-290, reprinted in 1990 U.S. Code Cong. & Admin. News, pp. 4943^-944; Note, supra, 52 Food & Drug L.J. at p.

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Bluebook (online)
361 P.3d 868, 62 Cal. 4th 298, 195 Cal. Rptr. 3d 505, 2015 Cal. LEXIS 9481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quesada-v-herb-thyme-farms-inc-cal-2015.