Phelps v. Hormel Foods Corp.

• Citation: 244 F.Supp.3d 1312
• Decision Date: 24 March 2017
• Docket Number: CASE NO. 16–CV–62411–DIMITROULEAS
• Parties: Benjamin PHELPS, individually and on behalf of all others similarly situated, Plaintiff, v. HORMEL FOODS CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of Florida

244 F.Supp.3d 1312

Benjamin PHELPS, individually and on behalf of all others similarly situated, Plaintiff,

v.HORMEL FOODS CORPORATION, Defendant.

CASE NO. 16–CV–62411–DIMITROULEAS

United States District Court, S.D. Florida.

Signed March 24, 2017

Entered March 27, 2017

Phillip Timothy Howard, Howard & Associates, Tallahassee, FL, for Plaintiff.

Allen Paige Pegg, Hogan Lovells LLP, Miami, FL, E. Desmond Hogan, Miranda L. Berge, Hogan Lovells US LLP, Washington, DC, for Defendant.

ORDER GRANTING MOTION TO DISMISS

WILLIAM P. DIMITROULEAS, United States District Judge

THIS CAUSE is before the Court upon Defendant's Motion to Dismiss Plaintiff's Class Action Complaint [DE 17] ("Motion"). The Court has carefully considered the Motion, Plaintiff's Response [DE 20], Defendant's Reply [DE 23], and the record in this case, and is otherwise advised in the premises. For the reasons stated herein, the Court will grant the Motion.

I. BACKGROUND

In this action, Plaintiff Benjamin Phelps alleges that the "100% Natural" and "No Preservatives" claims on Defendant Hormel Foods Corporation's ("Hormel's") Natural Choice brand deli-style meat products ("Products") are false, misleading, and deceptive because they allegedly contain synthetic ingredients and/or preservatives. DE 1 ¶ 2. Specifically, Plaintiff contends that the Products contain cultured celery powder, baking powder, and genetically modified ingredients, including maltodextrin. Id. ¶¶ 2, 32, 33, 37. Plaintiff claims that he relied on the "100% Natural" label when he purchased four of the items in the Product line at a premium price. Id. ¶¶ 17–19, 23. Based on these allegations, Plaintiff asserts five counts: (1) violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"); (2) negligent misrepresentation; (3) misleading advertising in violation of Fla. Stat. § 817.41 ; (4) breach of express warranty; and (5) unjust enrichment. See id. ¶¶ 98–143. Plaintiff seeks damages, as well as declaratory and injunctive relief, on behalf of himself and a putative class of all persons in Florida—or alternatively, all persons in the United States—who, within the past four years, "purchased Hormel products, labeled ‘Hormel Natural Choice .’ " Id. ¶¶ 83–84.

In response, Defendant has moved to dismiss the Complaint on several grounds. See DE 17. First, Defendant argues that Plaintiff's claims are preempted by federal law because the challenged "100% Natural" and "No Preservatives" claims were specifically approved by the United States Department of Agriculture's ("USDA's") Food Safety Inspection Service ("FSIS") pursuant to the Federal Meat Inspection Act ("FMIA") and Poultry Products Inspection Act ("PPIA"). Id. at 7–12. Second, to the extent that Plaintiff's claims are not preempted, Defendant argues that they are precluded because USDA has primary jurisdiction. Id. at 12–14. Third, Defendant maintains that Plaintiff has failed to state a cognizable cause of action because FSIS's approval of the Products' labeling means that the labels are presumptively lawful and not false or misleading. Id. at 14–23. Finally, Defendant argues that Plaintiff lacks standing to sue for Products that he did not buy and to seek injunctive relief. Id. at 23–24.

II. LEGAL STANDARD

To adequately plead a claim for relief, Rule 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Under Rule 12(b)(6), a motion to dismiss should be granted only if the plaintiff is unable to articulate "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (abrogating Conley , 355 U.S. at 41, 78 S.Ct. 99 ). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ).

The Court need not take allegations as true if they are merely "threadbare recitals of a cause of action's elements, supported by mere conclusory statements." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. In sum, "a district court weighing a motion to dismiss asks ‘not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.’ " Twombly , 550 U.S. at 583, 588 n.8, 127 S.Ct. 1955 (quoting Scheuer v. Rhodes , 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Davis v. Scherer , 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984) ).

III. DISCUSSION

Although Defendant has asserted multiple bases for dismissal, the Court will focus its discussion on two independently sufficient grounds for dismissing the Complaint. First, Plaintiff's claims are expressly preempted by PPIA and FMIA. Second, Plaintiff's Compliant fails to state a claim upon which relief can be granted.

A. Preemption

Plaintiff's challenges to the "100% Natural" and "No Preservatives" claims on the Product labels are expressly preempted because they fall within the preemption clauses of PPIA and FMIA and FSIS has preapproved the claims on the challenged Product labels. A court's preemption analysis is guided by two principles: (1) a presumption exists against supplanting the historic police powers of the states by federal legislation unless that is Congress's clear and manifest purpose; and (2) Congress's purpose must serve as the ultimate touchstone. Meaunrit v. ConAgra Foods Inc. , No. C 09-02220 CRB, 2010 WL 2867393, at *5 (N.D. Cal. July 20, 2010) (citations omitted).

Congress enacted PPIA and FMIA, in part, to ensure the proper labeling of poultry and meat products. See 21 U.S.C. §§ 451, 602. Under PPIA and FMIA, "meat and poultry products cannot be sold if the product has labeling that is false or misleading." Kuenzig v. Kraft Foods, Inc. , No. 8:11-CV-838-T-24 TGW, 2011 WL 4031141, at *4 (M.D. Fla. Sept. 12, 2011), aff'd , 505 Fed.Appx. 937 (11th Cir. 2013) (citing 21 U.S.C. §§ 457(c), 607(d) ; 9 C.F.R. §§ 317.8(a), 381.129(a) ). These Acts delegate the regulation of meat and poultry products to USDA, which has promulgated extensive regulation governing the labeling and packaging of such products. See 9 C.F.R. §§ 300–500. Among these regulations is a requirement that manufacturers submit sketch labels to FSIS for approval before a final label bearing the terms "Natural" and "No Preservatives" may be used on any products distributed into the marketplace. 9 C.F.R. § 412.2. FSIS's approval process includes a determination of whether labels appear "false or misleading." See 21 U.S.C. § 457 ; see also ConAgra , 2010 WL 2867393, at *6.

Both PPIA and FMIA contain a preemption clause that states in relevant part: "Marking, labeling, packaging, or ingredient requirements ... in addition to, or different than, those made under this chapter may not be imposed by any State ...." 21 U.S.C. §§ 467e, 678. This clause sweeps broadly. See Nat'l Meat Ass'n v. Harris , 565 U.S. 452, 459, 132 S.Ct. 965, 181 L.Ed.2d 950 (2012) (discussing FMIA preemption clause); Ass'n des Eleveurs de Canards et D'Oies du Quebec v. Harris , 79 F.Supp.3d 1136, 1144 (C.D. Cal. 2015) (discussing PPIA preemption clause). "For the purposes of preemption, a ‘requirement’ is a rule of law that must be obeyed, whether it arises from common law principles enforceable in damages actions or in a statute." ConAgra , 2010 WL 2867393, at *5 (internal citations and quotation omitted). Thus, FSIS's preapproval of a label "must be given preemptive effect" over state-law claims that would effectively require the label to include different or additional markings. Barnes v. Campbell Soup Co. , No. C 12-05185 JSW, 2013 WL 5530017, at *5 (N.D. Cal. July 25, 2013) (citations omitted).

For example, in Kuenzig , the plaintiff brought claims under Florida law alleging that the "percent fat free" statements on the defendants' lunch meat products were "unfair, deceptive, and misleading." 2011 WL 4031141, at *1. The district court found that FSIS had preapproved the labels, and "[a]s such, any state law claim based on the contention that the labels are false or misleading [was] preempted, because such a claim would require Plaintiff to show that the information stated on the labels should have been presented differently (thus, imposing a different and/or additional labeling requirement than those found under the FMIA and the PPIA)." Id. at *6–7 (emphasis in original). The Eleventh Circuit affirmed per curium the dismissal on preemption ( and other) grounds. 505 Fed.Appx. at 939.

Here, as in Keunzig , Plaintiff's claims are expressly preempted by PPIA and FMIA. FSIS has preapproved all of the labels at issue, each of which contains the challenged "100% Natural" and "No Preservatives" claims. See DE 17–1 to 17–18.¹ By attempting to challenge the FSIS- approved claims as false, misleading, or deceptive, each of Plaintiff's claims improperly seeks to impose additional or different requirements on Defendant's labeling than those required by USDA.² Such challenges are in direct conflict with the sweeping preemption clauses in PPIA and FMIA, and Plaintiff's state-law claims therefore must be dismissed as expressly preempted by federal law.

Plaintiff's arguments against federal preemption are unpersuasive. First, Plaintiff argues that the state's concurrent jurisdiction over the regulation of food labeling precludes a finding of preemption. Congress did provide that states may, consistent with PPIA and FMIA requirements, exercise concurrent jurisdiction with USDA to prevent the distribution of poultry and meat products that have labeling that is false or misleading. See 21 U.S.C. §§ 467e, 678. However, "[t]he...