Astiana v. Hain Celestial Grp., Inc.

• Decision Date: 10 April 2015
• Docket Number: No. 12–17596.,12–17596.
• Citation: 783 F.3d 753
• Parties: Skye ASTIANA; Tamar Davis Larsen, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants, v. The HAIN CELESTIAL GROUP, INC., Delaware corporation; Jason Natural Products, INC., a California corporation, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

783 F.3d 753

Skye ASTIANA; Tamar Davis Larsen, on behalf of themselves and all others similarly situated, Plaintiffs–Appellants

v.The HAIN CELESTIAL GROUP, INC., Delaware corporation; Jason Natural Products, INC., a California corporation, Defendants–Appellees.

No. 12–17596.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 10, 2015.

Filed April 10, 2015.

Joseph N. Kravec, Jr. (argued) and Wyatt A. Lison, Feinstein Doyle Payne & Kravec, LLC, Pittsburgh, PA; Michael D. Braun, Braun Law Group, P.C., Los Angeles, CA; Janet Lindner Spielberg, Law Offices of Janet Lindner Spielberg, Los Angeles, CA, for Plaintiffs–Appellants.

James M. Schurz (argued) and Lisa A. Wongchenko, Morrison & Foerster LLP, San Francisco, CA, for Defendants–Appellees.

Appeal from the United States District Court for the Northern District of California, Phyllis J. Hamilton, Chief District Judge, Presiding. D.C. No. 4:11–cv–06342–PJH.

Before: SIDNEY R. THOMAS, Chief Judge and A. WALLACE TASHIMA and M. MARGARET McKEOWN, Circuit Judges.

OPINION

McKEOWN, Circuit Judge:

A product labeled “all natural” or “pure natural” likely evokes images of ground herbs and earth extracts rather than chemicals such as “Polysorbate 20” or “Hydroxycitronellal.” This class action alleges that false or misleading product labels duped consumers seeking natural cosmetics into purchasing products that were chock-full of artificial and synthetic ingredients. Although the underlying question of what constitutes a “natural” cosmetic poses a fascinating question, it is not the one we answer. Instead, this appeal requires us to decide whether federal preemption or the primary jurisdiction doctrine prevents the district court from deciding when a “natural” label on cosmetic products is false or misleading.

We conclude that the Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. (“FDCA”), does not expressly preempt California's state law causes of action that create consumer remedies for false or misleading cosmetics labels. Although the district court properly invoked the primary jurisdiction doctrine, it erred by dismissing the case rather than issuing a stay pending potential agency action by the Food and Drug Administration (“FDA”). On remand, the district court may consider whether events during the pendency of this appeal have changed the calculus on whether further FDA proceedings are necessary.

Background

The Hain Celestial Group and JÂSÖN Natural Products (collectively “Hain”) make moisturizing lotion, deodorant, shampoo, conditioner and other cosmetics products. Hain labels these products “All Natural,” “Pure Natural,” or “Pure, Natural & Organic.”

Skye Astiana, Tamar Davis Larsen, and Mary Littlehale (collectively “Astiana”) filed a putative nationwide class action claiming that they were deceived into purchasing Hain's cosmetics, which contain allegedly synthetic and artificial ingredients ranging from benzyl alcohol to airplane anti-freeze. Astiana claims she likely would not have purchased—and certainly would not have paid the going price for—Hain's cosmetics had she been aware of their synthetic and artificial contents. Astiana sought injunctive relief and damages under the federal Magnuson–Moss Warranty Act, California's unfair competition and false advertising laws, and common law theories of fraud and quasi-contract.

Hain filed two motions to dismiss the complaint. First, it moved to partially dismiss the suit under Federal Rule of Civil Procedure 12(b)(6). As relevant here, the district court dismissed the quasi-contract cause of action, noting that “while restitution is available as a remedy for plaintiffs' other causes of action, it is not a standalone cause of action in California and is nonsensical as pled in any event.”¹

In its second motion to dismiss, Hain asserted that Astiana's state law claims are preempted by the FDCA. In the alternative, Hain urged that the suit should be stayed or dismissed under the primary jurisdiction doctrine. The district court found the latter argument persuasive and dismissed Astiana's claims so the parties could seek expert guidance from the FDA.

Analysis

I. Preemption

Hain argues that the FDCA expressly preempts Astiana's state law claims. Although the district court did not address this argument, Hain asks us to do so, citing our authority to “affirm on any grounds supported by the record.” Franklin v. Terr, 201 F.3d 1098, 1100 n. 2 (9th Cir.2000). We accept this invitation because this purely legal question remains a threshold issue for resolution.

In analyzing express preemption, we “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947). The FDCA proscribes any cosmetics labeling that is “false or misleading in any particular.” 21 U.S.C. § 362(a). The more specific preemption language prohibits any state or local government from “establish [ing] or continu[ing] in effect any requirement for labeling or packaging of a cosmetic that is different from or in addition to, or that is otherwise not identical with” federal rules. 21 U.S.C. § 379s(a). Hain's argument that this language expressly preempts any state law claim that a cosmetic label is false or misleading does not square with Supreme Court precedent.

The preemption language of § 379s is virtually identical to the statutory text at issue in two Supreme Court cases: Medtronic, Inc. v. Lohr, 518 U.S. 470, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996), and Bates v. Dow Agrosciences LLC, 544 U.S. 431, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005). Like the statutes at issue in those cases, the FDCA bars states from imposing new or additional labeling “requirements,” but is silent with regards to states' ability to provide remedies for violations of federal law. In light of this similarity, we have little difficulty concluding that the FDCA does not preempt state laws that allow consumers to sue cosmetics manufacturers that label or package their products in violation of federal standards.

In Medtronic, the Supreme Court considered whether the FDCA's prohibition on state medical device safety “requirements” that are “different from, or in addition to” federal requirements preempted state law product liability claims. 518 U.S. at 481, 116 S.Ct. 2240 (quoting 21 U.S.C. § 360k(a) ). Looking to the text, the Court concluded that nothing in the statutory language “denies [a state] the right to provide a traditional damages remedy for violations of common-law duties when those duties parallel federal requirements.” Id. at 495, 116 S.Ct. 2240. Simply put, the availability of state law damages for violations of federal law “does not amount to [an] additional or different ‘requirement.’ ” Id.

The Court reached a similar conclusion in Bates. There, chemical manufacturers argued that the labeling requirements of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. § 136 et seq., preempted state law claims that their products failed to include adequate warnings. That statute mandates certain chemical labeling requirements and prohibits states from “impos[ing] or continu[ing] in effect any requirements for labeling or packaging in addition to or different from” federal requirements. 7 U.S.C. § 136v(b). The Court determined that this language is not an absolute bar to state law failure to warn claims, reasoning that FIFRA “does not ... pre-empt any state rules that are fully consistent with federal requirements.” Bates, 544 U.S. at 452, 125 S.Ct. 1788. To the extent state law might be construed more broadly than federal law, the solution is not to prohibit state law suits altogether, but to “instruct the jury on the relevant [federal] standards, as well as any regulations that add content to those standards.” Id. at 454, 125 S.Ct. 1788.

Hain attempts to escape the dictates of the Supreme Court by arguing that Astiana's suit would create a “novel state labeling requirement” under California's Sherman Act, Health & Safety Code § 111730. This approach does not save the preemption argument. Astiana is not asking Hain to modify or enhance any aspect of its cosmetics labels that are required by federal law. Rather, she claims deception as a result of advertising statements that contradicted the true ingredients listed on the FDA-mandated label. See Williams v. Gerber Prods. Co., 552 F.3d 934, 939 (9th Cir.2008) 7(“We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception.”). FDA regulations do not require Hain to label its products as “All Natural” or “Pure Natural.” If Astiana's suit ultimately requires Hain to remove these allegedly misleading advertising statements from its product labels, such a result does not run afoul of the FDCA, which prohibits “requirement[s]” that are “different from,” “in addition to,” or “not identical with” federal rules.

Hain also argues that the complaint's reference to the FDA's informal food labeling policy represents an attempt to create a state regulatory regime where no corresponding federal rules exist. This characterization does not ring true. Astiana referenced these regulations to demonstrate that Hain knew or should have known its products contained ingredients that would likely be considered synthetic and artificial. Notably, the complaint referenced Hain's correspondence with a non-profit organization for the same purpose.

Hain finally points out that the FDA has never issued regulations regarding the use of “natural” on cosmetics labels. That is true, but Hain then argues that the FDA's failure to issue specific regulations on the subject is tantamount to a conscious decision by the agency to permit any use of this term a manufacturer sees fit. This...