Organic Consumers Ass'n v. Hain Celestial Grp., Inc.

• Decision Date: 03 January 2018
• Docket Number: Case No. 1:16–cv–00925 (TNM)
• Parties: ORGANIC CONSUMERS ASSOCIATION, Plaintiff, v. HAIN CELESTIAL GROUP, INC., Defendant.
• Court: U.S. District Court — District of Columbia

285 F.Supp.3d 100

ORGANIC CONSUMERS ASSOCIATION, Plaintiff,

v.HAIN CELESTIAL GROUP, INC., Defendant.

Case No. 1:16–cv–00925 (TNM)

United States District Court, District of Columbia.

Signed January 3, 2018

Kim E. Richman, Richman Law Group, Brooklyn, NY, Tracy Diana Rezvani, Rezvani Law Firm, P.C., Rockville, MD, Yvette Golan, The Golan Firm, Washington, DC, Richard M. Volin, Volin Employment Law, PLLC, Falls Church, VA, for Plaintiff.

Alan E. Rothman, Lori B. Leskin, Richard A. De Sevo, Arnold & Porter Kaye Scholer LLP, New York, NY, Cara J. Spencer, Office of the Attorney General for the District of Columbia, Sarah E. Warlick, Arnold & Porter LLP, Robert J. Wagman, Jr., Bracewell LLP, for Defendant.

MEMORANDUM OPINION

TREVOR N. MCFADDEN, United States District Judge

The Organic Consumers Association ("Plaintiff") brings this action under the District of Columbia Consumer Protection Procedures Act ("CPPA"), seeking to prevent Defendant Hain Celestial Group, Inc. ("Hain Celestial") from labeling its "Earth's Best" infant and toddler formula products as "organic," at least when those products are in the District of Columbia. The complaint's only count alleges that the products contain synthetic ingredients that are not permitted under the federal Organic Food Production Act of 1990 ("OFPA"), and thus the "organic" label is a misrepresentation that violates the CPPA. Hain Celestial moves to dismiss, contending, inter alia , that private enforcement of organic labeling via state law is preempted by the OFPA. For the reasons that follow, I conclude that Plaintiff's claim is federally preempted, and grant the motion to dismiss.

I. BACKGROUND

Plaintiff filed a single-count complaint in D.C. Superior Court, alleging that Hain Celestial's infant and toddler formulas under the "Earth's Best" brand (the "Challenged Products") contain "[a]t least 29 ingredients" (the "Challenged Ingredients") not permitted under the OFPA. Compl. 4. According to Plaintiff, these ingredients are "nonagricultural substances," some of which pose health risks to the public, and all of which are illegal in "organic" infant formula because they are not permitted under the OFPA and its regulations. Compl. 4, 12–23. Plaintiff seeks a declaration that Defendant's conduct in marketing the Challenged Products violates the CPPA, an order enjoining the conduct and requiring "corrective advertising and revised labeling," costs and disbursements (including attorneys' fees), and punitive damages. Compl. 27–28.

Hain Celestial removed to federal court on the basis of diversity and federal question jurisdiction, and Plaintiff did not contest the removal. Hain Celestial moves to dismiss the complaint in its entirety.¹

I. LEGAL STANDARDS

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "A claim crosses from conceivable to plausible when it contains factual allegations that, if proved, would ‘allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ " Banneker Ventures, LLC v. Graham , 798 F.3d 1119, 1129 (D.C. Cir. 2015) (alteration omitted) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In undertaking this inquiry, the court will "accept all the well-pleaded factual allegations of the complaint as true and draw all reasonable inferences from those allegations in the plaintiff's favor." Id. However, we do not assume the truth of legal conclusions. Id.

II. ANALYSIS

A. Standing

Because jurisdiction is a threshold question, I begin by considering whether Plaintiff has standing.² Defendant contends that Plaintiff has failed to adequately plead a concrete "injury-in-fact," part of the " ‘irreducible constitutional minimum’ of Article III standing. Shaw v. Marriott Int'l, Inc. , 605 F.3d 1039, 1042 (D.C. Cir. 2010) (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ); Def.'s Mot. Dismiss 10–15. But the complaint alleges, inter alia , that because it exists to promote the interests of organic consumers, Plaintiff funds programs aimed at informing organic consumers about the dangers of synthetic and genetically-modified ingredients, appealing directly to manufacturers like Hain Celestial, and advocating for stricter organic standards with government actors. Compl. 8, ¶¶ 30–31 (citing Compl. Ex. 12). The Challenged Products embody what Plaintiff opposes, creating a "need to ‘counteract’ the [Defendant's] assertedly illegal practices," Fair Employment Council of Greater Washington, Inc. v. BMC Mktg. Corp. , 28 F.3d 1268, 1276 (D.C. Cir. 1994) (quoting Havens Realty Corp. v. Coleman , 455 U.S. 363, 379, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982) ), and requiring still more programmatic efforts. Compl. Ex. 12 (educational and political efforts, naming Earth's Best infant formula a "worst offender"); Compl. 8 ("efforts to persuade ... Earth's Best").

Based on these well-pleaded facts, I conclude that Plaintiff has sufficiently alleged injury-in-fact. When the defendant's alleged violation has "perceptibly impaired" the plaintiff's programs, "there can be no question that the organization has suffered injury in fact." Fair Employment Council , 28 F.3d at 1276 (D.C. Cir. 1994) (quoting Havens , 455 U.S. at 379, 102 S.Ct. 1114 ) (The defendant's "discriminatory actions have interfered with [ ] efforts and programs and have also required [plaintiff] to expend resources to counteract [the] alleged discrimination")); Spann v. Colonial Vill., Inc. , 899 F.2d 24, 27–29 (D.C. Cir. 1990) ("[A]n organization establishes Article III injury if it alleges that purportedly illegal action increases the resources the group must devote to programs independent of its suit challenging the action"). And since Plaintiff satisfies Article III's "irreducible minimum," Lujan , 504 U.S. at 560, 112 S.Ct. 2130, it has little trouble demonstrating standing under the CPPA, which broadly confers standing on "a consumer," "a nonprofit organization ... on behalf of itself or any of its members," and even "a public interest organization ... on behalf of ... a consumer or a class of consumers," if the organization has a "sufficient nexus to the interests involved." D.C. Code §§ 28–3905(k)(1)(A), (C), (D) ; id. § 28–3901(a) (defining "consumer" in the noun form to include a nonprofit organization or public interest organization that "does or would purchase ... goods or services" "in order to test or evaluate qualities pertaining to use for personal, household, or family purposes"); Compl. 7–9, ¶ 33.

Satisfied with jurisdiction, I proceed to consider Defendant's federal preemption claim.

B. Federal Preemption

The Supremacy Clause of the U.S. Constitution provides that federal law "shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. art. VI, cl. 2. "In applying this Clause, courts have identified three ways in which a federal statute or regulation can pre-empt state law: by express pre-emption, by ‘field’ pre-emption ... and by implied or conflict preemption, which applies when a state law conflicts with a federal statute or regulation." Geier v. Am. Honda Motor Co. , 166 F.3d 1236, 1237 (D.C. Cir. 1999) (citations omitted).³ "[I]mplied conflict pre-emption [exists] where it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Freightliner Corp. v. Myrick , 514 U.S. 280, 287, 115 S.Ct. 1483, 131 L.Ed.2d 385 (1995) (quoted in Geier , 166 F.3d at 1242 ). Defendant's preemption arguments largely fall into the obstacle preemption category.

In undertaking a traditional preemption analysis, courts apply two presumptions. "First, because the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action." Medtronic, Inc. v. Lohr , 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). This is so "particularly [when] Congress has legislated ... in a field which the States have traditionally occupied," where "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." Id. (quotation marks and citations omitted). Second, "the purpose of Congress is the ultimate touchstone." Id. (alteration and citations omitted). Intent can "primarily" be discerned through the statute's language, but "the reviewing court's reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law" is also relevant. Id. at 486, 116 S.Ct. 2240 ; Altria Grp., Inc. v. Good , 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008) ("Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose."). "State law is not preempted ... unless that was the clear and manifest purpose of Congress." Washington Serv. Contractors Coal. v. D.C., 54 F.3d 811, 815 (D.C. Cir. 1995) (citations and quotation marks omitted).

Defendant argues that permitting suits under state law for violations of the OFPA would conflict with the statute's purpose by creating a patchwork of conflicting rulings about the permissible use of the term "organic," and undermining the certifying agent, who is tasked by statute with certifying organic production operations only if they are fully compliant with the law. Def.'s Mot. Dismiss 15–20; 7 U.S.C. § 6503(d). Defendant also contends that the OFPA does not provide for private...