Tamas v. Safeway, Inc.

• Decision Date: 23 February 2015
• Docket Number: G050114
• Citation: 185 Cal.Rptr.3d 53,235 Cal.App.4th 294
• Court: California Court of Appeals Court of Appeals
• Parties: Ashley TAMAS, Plaintiff and Appellant, v. SAFEWAY, INC. et al., Defendants and Respondents.

235 Cal.App.4th 294

185 Cal.Rptr.3d 53

Ashley TAMAS, Plaintiff and Appellant

v.SAFEWAY, INC. et al., Defendants and Respondents.

G050114

Court of Appeal, Fourth District, Division 3, California.

Filed February 23, 2015

Rehearing Denied March 17, 2015

Ridout Lyon + Ottoson, Christopher P. Ridout, Caleb LH Marker ; Zimmerman Reed and Bradley C. Buhrow for Plaintiff and Appellant.

Fulbright & Jaworski, Los Angeles, Jeffrey B. Margulies, William L. Troutman and Margot M. Fourqurean for Defendants and Respondents.

OPINION

RYLAARSDAM, ACTING P.J.

Ashley Tamas appeals from the judgment entered in favor of defendants Safeway, Inc. and Lucerne Foods, Inc. (collectively Safeway), after the trial court sustained a demurrer to Tamas's proposed class action complaint without leave to amend. In her complaint, Tamas alleged Safeway was culpable for misbranding its Lucerne brand of Greek yogurt as “yogurt” because the food's ingredients included “milk protein concentrate” (MPC), which is not included on the list of allowable optional ingredients for “yogurt” under the applicable regulation promulgated by the federal Food and Drug Administration (FDA). The trial court disagreed, concluding that MPC was an allowable ingredient in yogurt, as the restrictive regulation relied upon by Tamas had been stayed, and the FDA had informally agreed to allow the use of MPC in yogurt until the stay was resolved.

We affirm. The regulation relied upon by Tamas to preclude the use of MPC in yogurt is one that she admits was stayed by the FDA shortly after it was enacted, in response to concerns the rule was unduly restrictive. The glacial pace at which the FDA has moved in attempting to resolve those concerns and redraft a new formal regulation did not, as Tamas seems to suggest, operate as a stealth reenactment of the stayed rule.

FACTS

Tamas filed her complaint in April 2012, on behalf of herself and a class of similarly situated consumers who have purchased “Lucerne Greek yogurt” from Safeway stores, believing it was “classic Greek yogurt” which achieves its thicker consistency and high protein content as a result of straining. She alleged Safeway had misbranded its “Lucerne Greek yogurt” as yogurt, because the product's listed ingredients include MPC, which was used as an artificial thickener, and to increase its protein content, but is not an ingredient permitted in any product labeled as “yogurt.”

Specifically, Tamas alleged the FDA has promulgated a regulation specifying the “Standard of Identity” (SOI) for yogurt. This SOI sets forth the definition of “yogurt” and follows it with a restrictive list of the ingredients that may be included within any product labeled as “yogurt.” She also alleged that pursuant to the federal Nutrition Labeling and Education Act of 1990 (Pub.L. No. ,101-535 (Nov. 8, 1990) 104 Stat. 2353), the states are preempted from adopting their own standards for food labeling that are inconsistent with the federal SOI. Thus, California has adopted the federal SOI for yogurt as California's own pursuant to the Sherman Food, Drug, and Cosmetic Law (Health & Saf. Code, § 109875, et seq. )As set forth in Tamas's complaint, the SOI for yogurt describes yogurt as being made by “culturing one or more of the optional diary [sic] ingredients [cream, milk, partially skimmed milk, or skim milk, used alone or in combination]” and allows the addition of “[o]ne or more of the other optional ingredients specified in paragraphs (b) [ (referring to allowable vitamins) ] and (d) of [21 C.F.R. § 131.200 (2014) ].”

Tamas notes that paragraph (d), in turn, specifies the “other optional ingredients” which may be included in yogurt, including “[c]oncentrated skim milk, nonfat dry milk, buttermilk, whey, lactose, lactalbumins, lactoglobulins, or whey modified by partial or complete removal of lactose and/or minerals, to increase the nonfat solids content of the food.” As Tamas alleges, MPC is not included on that list. (21 C.F.R. § 131.200(d)(1) (2014) (all further regulatory references are to this title of the Code of Federal Regulations.))

Tamas also acknowledges that subparagraph (d)(1) of the yogurt SOI, which lists the foregoing “other optional ingredients” that may be included in the product, has been stayed since 1982. She alleges, however, that the effect of that stay was to further restrict the ingredients allowed in yogurt, such that even those ingredients listed in the stayed subparagraph (which would otherwise be allowed) are prohibited.

Thus, under Tamas' construction of the SOI for yogurt, MPC is not currently a permitted ingredient in any food labeled as “yogurt.” Consequently, she alleges Safeway misbranded its “Lucerne Greek yogurt” as yogurt, and based on that allegation she stated causes of action for violation of the Consumers Legal Remedies Act (Civ. Code, § 1750, et seq. ) and violation of the unfair competition law (Bus. & Prof. Code, § 17200, et seq. ). Tamas prayed for a court order declaring that Safeway had misbranded its “Lucerne Greek yogurt” product as “yogurt,” an injunction prohibiting Safeway from continuing to sell their product as “yogurt,” and an award of restitution.

Safeway demurred to the complaint. It acknowledged using MPC in its “Lucerne Greek yogurt,” but denied that doing so was prohibited by the partially stayed SOI. Specifically Safeway disputed Tamas's contention that the FDA's 1982 stay of the “other optional ingredients” provision of the yogurt SOI operated as a further restriction on the ingredients allowed in yogurt. Instead, Safeway contended that the stay of part 131.200 (d)(1) (2014) operated to lift that restriction on “other optional ingredients,” leaving it free to include MPC as an ingredient and still call its product “yogurt.”

In support of its demurrer, Safeway asked the court to take judicial notice of various federal regulations, FDA rulings contained in the federal register, and a memorandum summarizing questions and answers from a 2004 “Regional Milk Seminar, an Advanced Milk Processing Course and a Special Problems in Milk Protection Course” available on the FDA Web site.

The court granted that request in its entirety.

Tamas opposed the demurrer and asked the court to take judicial notice of various documents as well. The court granted this request in part, and denied it in part.

After considering the arguments, as well as the documents of which it took judicial notice, the court sustained the demurrer without leave to amend.

DISCUSSION

1. Standard of Review

On review of a judgment following an order sustaining a demurrer without leave to amend, “we examine the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory, such facts being assumed true for this purpose.” (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415, [106 Cal.Rptr.2d 271, 21 P.3d 1189].) “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591, [96 Cal.Rptr. 601, 487 P.2d 1241].) “Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” (Pich v. Lightbourne (2013) 221 Cal.App.4th 480, 490, .)

2. The Federal SOI for Yogurt

The SOI for yogurt, which became effective in 1981 (46 Fed.Reg. 9939, (Jan. 30, 1981) ), is contained in part 131.200 (2014). It describes yogurt as “the food produced by culturing one or more of the optional dairy ingredients specified in paragraph (c) of this section with a characterizing bacterial culture that contains the lactic acid-producing bacteria, Lactobacillus bulgaricus and Streptococcus thermophilus.” It also allows “[o]ne or more of the other optional ingredients specified in paragraphs (b) and (d) of this section [to] be added.” (§ 131.200(a) (2014).)

The “dairy ingredients” that can be cultured to make yogurt are “[c]ream, milk, partially skimmed milk, or skim milk, used alone or in combination.” (§ 131.200(c) (2014), italics omitted.) These allowable cultured ingredients listed in paragraph (c) of the SOI are sometimes referred to as the “basic milk ingredients” of the yogurt. (74 Fed.Reg. 2443, 2453, (Jan. 15, 2009).)

Paragraph (b) of the SOI allows the addition of vitamins A and D. And the “[o]ther optional ingredients” that can be used in yogurt, listed in paragraph (d) of the regulation include “(1) Concentrated skim milk, nonfat dry milk, buttermilk, whey, lactose, lactalbumins, lactoglobulins, or whey modified by partial or complete removal of lactose and/or minerals, to increase the nonfat solids content of the food.... [¶] (2) Nutritive carbohydrate sweeteners.... [¶] (3) Flavoring ingredients. [¶] (4) Color additives. [¶] (5) Stabilizers.” (§ 131.200(d)(1) (2014), italics omitted.)

3. The FDA's Stay of the “Other Optional” Dairy Ingredient Provision of the SOI

The FDA's enactment of the yogurt SOI followed its 1977 publication of a proposedSOI, which was somewhat less restrictive. (42 Fed.Reg. 29919, (June 10, 1977).) Under the proposed rule, the “other optional” dairy ingredients which could be added to the basic cultured dairy ingredients to make yogurt included “[c]oncentrated skim milk, nonfat dry milk, or other milk-derived ingredients. ” (Id. at p. 29924, italics added & omitted.) However, some of the public comments about the proposed rule included objections...