Leining v. Foster Poultry Farms, Inc.

• Decision Date: 23 February 2021
• Docket Number: B291600
• Citation: 275 Cal.Rptr.3d 682,61 Cal. App. 5th 203
• Court: California Court of Appeals
• Parties: Carol LEINING, Plaintiff and Appellant, v. FOSTER POULTRY FARMS, INC. et al., Defendants and Respondents.

61 Cal.App.5th 203

275 Cal.Rptr.3d 682

Carol LEINING, Plaintiff and Appellant,

v.FOSTER POULTRY FARMS, INC. et al., Defendants and Respondents.

B291600

Court of Appeal, Second District, Division 5, California.

Filed February 23, 2021

As Modified March 15, 2021

Drinker Biddle & Reath, Sheldon Eisenberg, Los Angeles, Ryan M. Salzman and Mark E. Haddad, for Plaintiff and Appellant.

Duane Morris, Michelle Pardo, Rebecca Bazan and Paul J. Killion, San Francisco, for Defendant and RespondentAmerican Humane Association.

Mayer Brown, Dale J. Giali, Los Angeles, Elizabeth Crepps and Donald M. Falk, Palo Alto, for Defendant and RespondentFoster Poultry Farms, Inc.

RUBIN, P. J.

The American Humane Association has created a farm animal welfare program, by which it certifies farm-based food producers who comply with its animal welfare standards.If a producer complies with American Humane's standards, the producer can use American Humane's "American Humane Certified" logo on its food, provided it also pays a licensing fee for use of American Humane's trademark.

Foster Poultry Farms, Inc. participates in the American Humane program and uses the American Humane Certified logo on all its chicken products sold in California.Foster Farms must obtain federal approval for the labels of its chicken products, and has obtained that approval for the labels which include American Humane's logo.

Foster Farms charges more for its chicken than other producers whose chicken does not bear the American Humane Certified logo.PlaintiffCarol Leining purchased some Foster Farms chicken, in reliance on the American Humane Certified logo on its label.She believed that the American Humane certification meant that the chicken had been humanely treated; but in this litigation, she alleges that the true facts are American Humane certification means nothing, and Foster Farms's chickens were treated inhumanely.

Leining brought suit against Foster Farms for its allegedly misleading labels and against American Humane for its allegedly negligent certification.After extensive litigation, both defendants were granted summary judgment.We affirm, on the basis that Leining has not pleaded a viable cause of action against either defendant.The claims against Foster Farms are barred by federal preemption, and the negligent certification claim against American Humane is not viable in the absence of physical injury.¹

FACTUAL AND PROCEDURAL BACKGROUND²

1.Allegations of the Complaint

American Humane is a non-profit organization.It operates a program called American Humane Certified, which it represents " ‘provide[s] verifiable assurance to customers and retailers that products carrying the American Humane Certified™ label have met rigorous, science-based animal welfare standards and that the animals in the program were humanely raised.’ "

Leining alleges as follows.Foster Farms paid American Humane for the use of its certification.The certification "creates a reasonable expectation among consumers that the chicken they are purchasing is produced under circumstances that would be understood to be humane."This impression is untrue and Foster Farms's chickens are instead treated in a manner that "falls well short of a reasonable consumer's expectation for humane treatment."In fact, American Humane certifies chicken produced under the industry's standard operating procedures, and the birds it certifies are treated no better than any other chicken farmed for food.Leining bought Foster Farms's chicken in reliance on the false representation, paying more than the price of other chicken which did not carry the American Humane Certified label.

2.Foster Farms's Use of the American Humane Certified Logo for the Sale of Its Chicken is Federally Approved

All poultry and poultry products sold in the United States are subject to the Poultry and Poultry Products Inspection Act (PPIA).( 21 U.S.C. §§ 451 et seq. )Implementing regulations require that no label may be used on poultry or a poultry product unless it has been pre-approved by the Food Safety and Inspection Service (FSIS).³( 9 C.F.R. 412.1, subd. (a).)

A label claim "regarding the raising of animals" is considered a special statement or claim which requires submission of a "sketch" label and approval of that sketch.( 9 C.F.R. 412.1, subds. (c) - (e).)Foster Farms submitted its labels for sketch approval; in order to support its use of the American Humane Certified logo, it submitted the certificates of approval it had received from American Humane.The FSIS approved the labels which included the American Humane Certified logo.

3.FSIS Labeling Guidelines

During the time Foster Farms was using the American Humane certification on its label, and well into this appeal, animal welfare advocates were challenging the standards used by FSIS in its approval of labels which claimed the humane treatment of animals used for food.⁴

In December 2019, the FSIS updated its Labeling Guideline on Documentation Needed to Substantiate Animal Raising Claims for Label Submission.(< https://www.fsis.usda.gov/wps/wcm/connect/6fe3cd56-6809-4239-b7a2-bccb82a30588/RaisingClaims.pdf?MOD=AJPERES> [as of Feb. 11, 2021], archived at < https://perma.cc/LR7E-QMMR>.)The guidelines do not include substantive requirements for a claim of humane animal treatment, but simply require that the label either describe what it means by humane, or, if it uses a third-party certification, contain the certifier's name, logo, and website.(Id. at pp. 10-11, 15.)

The FSIS responded, via the Federal Register, to a number of the comments it had received on its prior guideline, which had been published in 2016.( 84 FR 71359;see81 FR 68933.)Of particular relevance, the FSIS had received comments from animal welfare advocacy organizations and individuals who took the position that FSIS "currently approves claims based on standards that do not meet consumer expectations.To address these concerns, the comments ... stated that FSIS should only approve animal welfare and environmental stewardship claims that have been certified by an independent third-party certifying organization that has established standards that exceed the conventional industry standards defined by meat and poultry trade associations."( 84 FR 71362.)FSIS disagreed, explaining, "The issues raised in the comments ... show that consumers, producers, and certifying entities have different views on the specific animal production practices that should be associated with certain animal welfare or environmental stewardship claims.Thus, because animal welfare or environmental stewardship claims mean different things to different people, a claim that is defined by a specific third-party certifying organization's animal-raising standards cannot reflect the diverse views associated with these types of claims."( 84 FR 71362-71363.)

With respect to third-party certification, FSIS explained, "If the claim is certified by a third-party certifying organization, FSIS will approve the label bearing the claim if it includes the certifying entity's name, website address, and logo, when the organization has a logo, as described in the guideline.Under this approach, the labeling of a meat or poultry product that bears an animal welfare or environmental stewardship claim includes the information that consumers need to determine whether the animal-raising practices used to define a particular animal claim meets their expectations for the claim."( 84 FR 71363, fn. omitted.)

There is no dispute that FSIS approved Foster Farms's labels containing the American Humane logo.Leining does not allege that Foster Farms was ever out of compliance with the FSIS's governing guidelines.

4.Plaintiff's Initial Complaint

On July 13, 2015, Leining filed her class action complaint, initially naming only Foster Farms as a defendant.She alleged that Foster Farms's use of the American Humane Certified logo on its labels was deceptive and misleading because her "objectively reasonable" understanding of the certification was that the chickens used by Foster Farms "were afforded a comfortable existence and a quick and painless death."She would not have purchased the chicken had she known that Foster Farms's chickens "were not in fact treated humanely, or even significantly differently from most other chickens on the market."She alleged causes of action for unfair competition, negligent misrepresentation, breach of express warranty, and breach of the implied warranty of merchantability – all on the theory that the label itself was deceptive because the chicken was not produced under humane circumstances.

5.Foster Farms's Initial Demurrer

Foster Farms demurred.The demurrer is not part of the record on appeal, but we do have the court's ruling sustaining the demurrer with leave to amend.The trial court was concerned that Leining was attempting to appoint herself arbiter of what is, or is not, humane.It explained, "Leining's complaint has no legal basis.Leining cites no case in which a producer complied with third party standards but was found guilty of misrepresentation or breach of warranty because, in someone's opinion, the third-party standards were lax."However, the court believed Leining might be able to state a claim under a different theory, and drew the parties’ attention to Hanberry v. Hearst Corp.(1969)276 Cal.App.2d 680, 81 Cal.Rptr. 519( Hanberry ), a case which held that, under certain circumstances, a plaintiff physically injured by a product may be able to state a claim in negligent misrepresentation against a third party who had endorsed the product.

6.Leining's Operative Complaint

The operative complaint is Leining's first amended complaint.Leining re-alleged her causes of action against Foster Farms for unfair competition, negligent misrepresentation, breach of express warranty, and breach of the implied warranty of merchantability.She reasserted her original theory of relief supporting each of these causes...