Tuesday, April 23, 2013

A Honey of a Litigation – Part 2

            It has been about two months since we first posted about the swell of class action litigation over honey.  Your homework at that time was to watch The Bee Movie while we watched the honey litigation.  We did our part.  Which is how we found Perea v. Walgreen Co., 2013 U.S. Dist. LEXIS 53404 (C.D. Cal. Apr. 11, 2013). 
            This is the same court that decided Overton v. CVS Caremark Corp., 2012 U.S. Dist. LEXIS 185697 (C.D. Cal. Dec. 11, 2012) which we discussed in our last post.  And for the most part, Perea looks a lot like Overton.  Plaintiffs are still complaining that under California law, honey can’t be labeled as honey if the pollen has been removed.  Perea, 2013 U.S. Dist. LEXIS 53404 at *4-5, *22-23.  The NLEA (the federal Nutrition Labeling and Education Act) still contains an express preemption provision, such that when federal and state food labeling laws conflict, federal law controls.  21 U.S.C. § 343-1(a)(3).  And federal law still provides that honey must be labeled with its “common or usual name” – i.e. honey.  See 21 U.S.C. § 343(i).  Put that altogether and you have a clear cut case of preemption. The Perea court (like Overton) agreed:
Plaintiff's claim must fail because [California’s honey labeling law] creates a requirement for the labeling of "honey" that is not identical to [federal law]. Section 343(i)(1) of the NLEA requires the [defendant’s] Product to be labeled "honey" (the "common or usual name" for the food).  [California law] prohibits the [defendant’s] Product from being sold when "labeled, marked, or designated" as "honey." Therefore, federal law preempts Plaintiff's claim. . . . 
Perea, at *28. 
            Faced with the precedent of Overton, as well as two other California decisions tossing out plaintiffs’ honey claims as preempted (see prior post), it is not surprising that plaintiffs in Perea tried a different strategy.  That’s the normal course of litigation – keep trying doors until you find one that opens or you run out of doors.  For example, in Ross v. Sioux Honey Ass’n Cooperative, 2013 U.S. Dist. LEXIS 6181 (N.D. Cal. Jan. 14, 2013), plaintiffs tried Door #2 by adding a contention that not only could defendant not call its product honey, but defendant had a duty “to disclose the fact that all pollen had been removed.”  Ross, 2013 U.S. Dist. LEXIS 6181 at *5.  The court found that door was locked as well (again, see prior post).    
            This time, plaintiffs attempted to re-characterize their claims in order to try to “sidestep the growing body of case law holding that labeling claims regarding pollen-removed honey are preempted.”  Perea, 2013 U.S. Dist. LEXIS 53404 at *11.  Plaintiffs claimed that they were not trying to enforce California law “as a labeling standard” or seeking for defendant’s honey “to be labeled differently.”  Id. at *10.  Rather, plaintiffs claimed they wanted the sale of product enjoined, “regardless of how it is labeled, because it is unlawful and violates California’s requirement that honey not have pollen removed.”  Id.  But Door #3 had a deadbolt on it too – no private right of action. 
When a State adopts a statute or regulation, it does not automatically create a private right to sue for damages resulting from violations of the statute. Such a private right of action exists only if the language of the statute or its legislative history clearly indicates the Legislature intended to create such a right to sue for damages. . . . California has vested enforcement of the honey statutes in "[t]he director and the commissioners of each county of the state, their deputies and inspectors[.]" Cal. Food & Agric. Code § 29441. . . . It is clear from this statutory scheme that there is no private right of action to enforce [the honey statutes].

Id. at *30-31 (citations and quotation marks omitted).  You know we like any decision that refuses to find a private right of action. 
            Moreover, the court saw through plaintiffs’ pretext of dressing up their claims as something other than labeling claims.  First, plaintiffs’ allegations are that they relied on the label and they wouldn’t have purchased the product if the label had indicated the pollen had been removed.  So, plaintiffs’ claims are “inextricable from the labeling.”  Id. at *12.  Second, California’s honey law establishes a “labeling requirement” because it “only applies to products “marked, labeled, or designated” as honey.  Id. (emphasis added).  And finally, “although Plaintiff maintains that her claim has nothing to do with labeling, she must resort to a labeling case to argue that she has standing to bring her claim.”  Id. at *13 (emphasis added).  See id. at *15 (plaintiff has standing when she relies on labeling and would not have purchased product but for content of label).  You can’t tether your allegations to the labeling and then jettison it when it becomes inconvenient.  Maybe the Perea decision – reinforcing that you can’t hide from precedent by trying to disguise your claims -- will help keep a few more doors locked to honey plaintiffs. 
            While Perea was technically dismissed without prejudice and plaintiffs given a short time to file an amended complaint, the court noted its doubt that the deficiencies could be cured.  Id. at *34 n.10.  The court also noted that it had likewise dismissed Overton without prejudice back in December and that the case was voluntarily dismissed in February.  Id. at *5 n.3, *34 n.10.     So, the score moves to 5 and 1 in favor of defendants in the honey litigation.  We’ll keep our eyes open to see if plaintiffs try their hands at Door #4. 

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