Organic Consumers Ass'n v. Honest Co.
| Decision Date | 12 June 2018 |
| Docket Number | B280836 |
| Court | California Court of Appeals Court of Appeals |
| Parties | ORGANIC CONSUMERS ASSOCIATION, Plaintiff and Appellant, v. THE HONEST COMPANY, INC., Defendant and Respondent. |
ORGANIC CONSUMERS ASSOCIATION, Plaintiff and Appellant,
v.
THE HONEST COMPANY, INC., Defendant and Respondent.
B280836
COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO
June 12, 2018
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. SC125655)
APPEAL from a judgment of the Superior Court of Los Angeles County. Elihu M. Berle, Judge. Affirmed.
The Golan Firm, Yvette Golan; Terrell Marshall Law Group, Beth Ellen Terrell; The Richman Law Group and Jaimie Mak for Plaintiff and Appellant.
Cooley, William P. Donovan, Jr., Christina S. Davis; and Darcie A. Tilly for Defendant and Respondent.
Page 2
Plaintiff and appellant Organic Consumers Association (Association) filed a complaint asserting a single cause of action under the California Organic Products Act of 2003 (COPA) (Health & Saf. Code, § 110810 et seq.), seeking to prevent defendant and respondent The Honest Company, Inc. (Honest) from labeling its premium infant formula as "organic." The complaint alleges that the formula contains synthetic ingredients that are not allowed in organic products under federal law, specifically, the Organic Food Production Act of 1990 (OFPA) (7 U.S.C. § 6501 et seq.), and therefore the "organic" label is a misrepresentation that violates the COPA. Honest demurred to the complaint on several grounds, including that the action is a direct challenge to the federal organic certification process and is therefore preempted by federal law. The trial court agreed and dismissed the action after Association failed to amend its complaint.
We conclude Association's state law claim that Honest is labeling infant formula as organic when it is not in fact organic stands as an obstacle to the stated congressional objectives of the OFPA and is preempted. We therefore affirm.
Association, a self-described nonprofit "focused exclusively on promoting the views and interests of the nation's millions of organic and socially responsible consumers," filed a complaint in the Los Angeles Superior Court, alleging in a single cause of action that Honest was "falsely representing" its premium infant formula as "'Organic.'" According to Association, of the 40 ingredients in the formula, 11 "are synthetic substances that are not allowed in organic products" under the OFPA and its regulations.
Page 3
Under the COPA, "no product shall be sold as organic . . . unless it is produced according to regulations promulgated by the NOP [National Organic Program], and consists entirely of products manufactured only from raw or processed agricultural products," except that it may include ingredients "produced in a manner consistent with, or which are on the national list adopted by the United States Secretary of Agriculture . . . ." (Health & Saf. Code, § 110820, subd. (b).) The COPA provides that "any person may bring an action in superior court" for injunctive relief for violation of any provision of the COPA. (Health & Saf. Code, § 111910, subd. (a).) Association brought its action "on behalf of the general public, and on behalf of its members." In addition to injunctive relief, the Association sought attorney fees and civil penalties.
Honest demurred to the complaint on five grounds: (1) the single state law claim is preempted by federal law because the formula is certified as "organic" by a certifying agent of the United States Department of Agriculture (USDA); (2) judicial abstention is appropriate given the alternative federal relief and the burden of enforcing the requested injunction; (3) dismissal is proper under the doctrine of primary jurisdiction because the USDA is in the process of formal rulemaking about the ingredients allowable in organic infant formula; (4) Association failed to exhaust its administrative remedies under federal law by failing to challenge the formula's organic certification before the USDA; and (5) Association fails to state a claim under state law because the formula's certification by the USDA agent is evidence that the challenged ingredients are permitted under federal law.
Page 4
The trial court sustained Honest's demurrer, finding Association's claim was preempted by federal law. The court found that Association's challenge to the use of the term organic "cannot be described in any way other than a direct challenge to the USDA accrediting, certifying agent decision itself." The court concluded that allowing outside parties, like consumers, to interfere with or second-guess the federal certification process via state law would pose an obstacle to accomplishing the stated congressional objectives of the OFPA. The court granted Association leave to amend the complaint to plead any possible allegations of misconduct by Honest in obtaining or using its certification. Association did not file an amended complaint. A judgment of dismissal was entered. This appeal followed.
I. Standard of Review
We review de novo a trial court's order sustaining a demurrer, exercising our independent judgment as to whether a cause of action has been stated as a matter of law. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300.) We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and we also consider matters which may be judicially noticed. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) "'"It is the rule that when a plaintiff is given the opportunity to amend his complaint and elects not to do so, strict construction of the complaint is required and it must be presumed that the plaintiff has stated as strong a case as he can." [Citations.]'" (Estate of Pryor (2009) 177 Cal.App.4th 1466, 1470.)
Page 5
II. Legislative Overview
To eliminate the patchwork of various state's organic regulations, Congress enacted the OFPA with the express purposes "(1) to establish national standards governing the marketing of certain agricultural products as organically produced products; [¶] (2) to assure consumers that organically produced products meet a consistent standard; and [¶] (3) to facilitate interstate commerce in fresh and processed food that is organically produced." (7 U.S.C. § 6501.) To accomplish these objectives, Congress directed the USDA to create a national organic certification program, which is known as the "National Organic Program" (NOP). (7 U.S.C. § 6503(a); National Organic Program, 65 Fed.Regs. 80548, 80682 (Dec. 21, 2000) (codified at 7 C.F.R. at pt. 205 (2017).) Under NOP regulations, a product may only be sold as "organic" if it contains "not less than 95 percent organically produced raw or processed agricultural products," and the remaining 5 percent may consist of synthetic ingredients only if those ingredients are on the "National List." (7 C.F.R. § 205.301(b) (2017).) The National List contains a comprehensive "itemization, by specific use or application" of permitted synthetic ingredients. (7 U.S.C. § 6517(b); 7 C.F.R. §§ 205.600-205.607 (2017)(the National List).)
All products labeled as "organic" must be certified by the USDA. (7 U.S.C. § 6503(a); 7 C.F.R. §§ 205.201, 205.404 (2017).) Certifying agents are public and private entities with "expertise in organic farming and handling techniques." (7 U.S.C. § 6514(b).) For a company's operation to be certified to sell a product as "organic," the company must develop an Organic System Plan (Plan), which is a detailed description of how an operation will achieve, document, and sustain compliance with
Page 6
the OFPA and the NOP. (7 U.S.C. § 6513; 7 C.F.R. § 205.201 (2017); 65 Fed.Reg. 80558 (Dec. 21, 2000).) The Plan must also include a list of each substance to be used with details about its composition and source. (7 C.F.R. § 205.201(a)(2) (2017).) Certifying agents must conduct on-site inspections to determine that the Plan submitted "accurately reflects the practices used or to be used by the applicant," and that "prohibited substances have not been and are not being applied to the operation." (7 C.F.R. § 205.403(c)(2), (3) (2017).) Certification is granted only if the certifying agent determines that "all procedures and activities of the applicant's operation are in compliance" with the OFPA and its regulations. (7 C.F.R. § 205.404(a) (2017).) Noncompliance with the OFPA and its implementing regulations can result in suspension or revocation of a certificate and civil penalties. (7 U.S.C. 6519; 7 C.F.R. §§ 205.660-205.663 (2017).) There is no private right of action under the OFPA.
The OFPA does permit state regulation of organic food products, including more restrictive regulations, but only if the state requirements are consistent with and further the purposes of the OFPA, and have been approved by the USDA. (7 U.S.C. § 6507.) California was the first state to have its organic program approved. The COPA incorporates by reference the federal regulations under the OFPA, and recognizes the primacy of federal law. (See, e.g., Food & Agr. Code, §§ 46001, 46002, subd. (a).)
III. Federal Preemption
As recognized by the California Supreme Court, the Supremacy Clause of the United States Constitution "makes federal law paramount." (Quesada v. Herb Thyme Farms, Inc. (2015) 62 Cal.4th 298, 307 (Quesada); U.S. Const., art. VI, § 2, cl.
Page 7
2.) "Similarly, federal agencies, acting pursuant to authorization from Congress, can issue regulations that override state requirements." (Quesada, supra, at p. 308.) The California Supreme Court has "identified several species of preemption," noting that "Congress may expressly preempt state law through an explicit preemption clause, or courts may...
To continue reading
Request your trial