Thornton v. Tyson Foods, Inc.

• Decision Date: 11 March 2022
• Docket Number: No. 20-2124,20-2124
• Citation: 28 F.4th 1016
• Parties: Robin G. THORNTON; Michael Lucero, on behalf of themselves and other similarly situated, Plaintiffs - Appellants, v. TYSON FOODS, INC.; Cargill Meat Solutions, Corp. ; Jbs USA Food Company; National Beef Packing Company, LLC, Defendants - Appellees. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America; Public Justice, Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

28 F.4th 1016

Robin G. THORNTON; Michael Lucero, on behalf of themselves and other similarly situated, Plaintiffs - Appellants,

v. TYSON FOODS, INC.; Cargill Meat Solutions, Corp. ; Jbs USA Food Company; National Beef Packing Company, LLC, Defendants - Appellees.Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America; Public Justice, Amici Curiae.

No. 20-2124

United States Court of Appeals, Tenth Circuit.

FILED March 11, 2022

A. Blair Dunn of Western Agriculture, Resource And Business Advocates, LLP (Marshall J. Ray of Law Office of Marshall J. Ray, with him on the briefs), Albuquerque, New Mexico, for Plaintiffs-Appellants.

Aaron D. Van Oort (Tyler A. Young, Michael M. Sawers, and Martin J. Demoret, with him on the brief), of Faegre Drinker Biddle & Reath LLP, Minneapolis, Minnesota, and Des Moines, Iowa, for Defendants-Appellees.

Leah M. Nicholls, David S. Muraskin, Public Justice, P.C., Washington, D.C., for Amici Curiae.

Before TYMKOVICH, Chief Judge, LUCERO, Senior Circuit Judge, and MORITZ, Circuit Judge.

MORITZ, Circuit Judge.

Plaintiffs Robin Thornton and Michael Lucero allege that defendants Tyson Foods, Inc., Cargill Meat Solutions, Corp., JBS USA Food Company, and National Beef Packing Company, LLC, use deceptive and misleading labels on their beef products. In particular, plaintiffs contend that the "Product of the U.S.A." label on defendants’ beef products is misleading and deceptive in violation of New Mexico law because the beef products do not originate from cattle born and raised in the United States.

But the federal agency tasked with ensuring that meat labels are not misleading or deceptive preapproved the labels at issue here. And critically, the governing federal statutory scheme—the Federal Meat Inspection Act (FMIA), 21 U.S.C. §§ 601 – 695 —includes an express preemption provision that prohibits states from imposing any "labeling ... requirements in addition to, or different than" the federal requirements. 21 U.S.C. § 678. In seeking to establish that defendants’ federally approved labels are nevertheless misleading and deceptive under state law, plaintiffs aim to impose labeling requirements that are different than or in addition to the federal requirements. Accordingly, we conclude that plaintiffs’ deceptive-labeling claims are expressly preempted by federal law. We further agree with the district court that plaintiffs fail to state a claim for false advertising. We therefore affirm the district court's order dismissing plaintiffs’ complaints.

Background¹

Thornton is a consumer who purchased defendants’ beef from various retail stores. She filed a class-action complaint in state court against defendants, alleging that their labels deceived her and other similarly situated consumers into paying higher prices for beef based on the mistaken belief that it originated from cattle born and raised in this country. Lucero is a "producer of beef cattle with a multi[ ]generational history of ranching in New Mexico." R. vol. 1, 100. He filed a separate class-action complaint, alleging that he and other similarly situated ranchers are paid less for their domestic cattle as a result of defendants’ conduct.

According to both complaints, since 2015, defendants have imported live cattle from other countries, slaughtered and processed the cattle here, and labeled the resulting beef products as "Products of the USA." Defendants place the same "Product of the USA" label on already-slaughtered beef that they import into this country. Plaintiffs allege that these labeling practices are misleading, fraudulent, and deceptive under New Mexico law. Accordingly, they bring state-law claims for unjust enrichment and violation of the New Mexico Unfair Practices Act (UPA), §§ 57-12-1 to 57-12-26. Thornton additionally asserts a breach-of-express-warranty claim, and Lucero sought to amend his complaint to replace his UPA claim with a claim under the New Mexico Antitrust Act, §§ 57-1-1 to 57-1-19.

After removing both cases to federal court, defendants moved to dismiss.² The district court granted the motions and denied Lucero's motion to amend as futile, concluding that federal preemption barred all plaintiffs’ claims, including the claim that Lucero sought to add. The district court alternatively concluded that, for various reasons, plaintiffs failed to state a claim under any of their theories of liability, including failing to state a false-advertising claim. It also declined to abstain from exercising jurisdiction under the primary-jurisdiction doctrine. See TON Servs., Inc. v. Qwest Corp. , 493 F.3d 1225, 1238 (10th Cir. 2007) ("Even where a court has subject[-]matter jurisdiction over a claim, courts have discretion to refer an issue or issues to an administrative agency.").

Plaintiffs appeal each ruling. Our review is de novo. See Mowry v. United Parcel Serv. , 415 F.3d 1149, 1151–52 (10th Cir. 2005) (stating that we review dismissal orders and preemption issues de novo); Watson ex rel. Watson v. Beckel , 242 F.3d 1237, 1239 (10th Cir. 2001) (noting de novo review of "district court's refusal to grant leave to amend a complaint based on the court's conclusion that the amendment would be futile").

Analysis

I. Labeling Claims

Plaintiffs argue that the district court erred in dismissing their state-law labeling claims as preempted by federal law. The Supremacy Clause of the United States Constitution grants Congress the authority to preempt state law. U.S. Const. art. VI, ¶ 2 (providing that "the [l]aws of the United States ... shall be the supreme [l]aw of the [l]and; ... any[t]hing in the [c]onstitution or [l]aws of any state to the [c]ontrary notwithstanding"). There are different types of federal preemption, but this case involves only express preemption, which "occurs when Congress ‘define[s] explicitly the extent to which its enactments pre[ ]empt state law.’ " Emerson v. Kansas City S. Ry. Co. , 503 F.3d 1126, 1129 (10th Cir. 2007) (quoting Choate v. Champion Home Builders Co. , 222 F.3d 788, 792 (10th Cir. 2000) ). Specifically, this case turns on § 678, the express preemption provision of the FMIA. As relevant here, § 678 prohibits states from imposing any labeling requirements for meat products that are "in addition to, or different than" the requirements imposed by the FMIA.

But before turning to § 678, we first outline the broader federal statutory and regulatory framework. The FMIA "regulates a broad range of activities" related to meat processing, Nat'l Meat Ass'n v. Harris , 565 U.S. 452, 455, 132 S.Ct. 965, 181 L.Ed.2d 950 (2012), including "assuring that meat and meat food products ... are ... properly marked, labeled, and packaged," 21 U.S.C. § 602. Consistent with this stated purpose, the FMIA prohibits false or misleading labeling, allowing only labeling that is "not false or misleading and [that is] approved by the Secretary" of Agriculture or his or her delegate. Id. § 607(d); see also id. § 601(a) (defining "Secretary"). And the FMIA charges the Food Safety and Inspection Service (FSIS), an agency of the United States Department of Agriculture (USDA), "with ensuring ... that certain commercial meat products are not misbranded." United Source One, Inc. v. U.S. Dep't of Agric., Food Safety & Inspection Serv. , 865 F.3d 710, 711 (D.C. Cir. 2017) ; see also § 601(n)(1) (defining "misbranded" meat product in part as one with "labeling [that] is false or misleading in any particular").

To that end, the FSIS requires manufacturers to obtain preapproval of labels before using such labels on their products: "No final label may be used on any product unless the label has been submitted for approval to the FSIS ... and approved ...." 9 C.F.R. § 412.1(a) ; see also § 607(d) (allowing labels that "are not false or misleading and [that ] are approved by the Secretary " (emphasis added)). One of the standards governing this review is that labels may not "convey[ ] any false impression or give[ ] any false indication of origin." 9 C.F.R. § 317.8(a). And "to help manufacturers ... prepare product labels that are truthful and not misleading," the FSIS issues a Food Standards and Labeling Policy Book, which "is a composite of policy and day-to-day labeling decision[s], many of which do not appear in" the applicable regulations or inspection manuals. FSIS, Food Standards and Labeling Policy Book 2–3 (2005), https://www.fsis.usda.gov/sites/default/files/import/Labeling-Policy-Book.pdf [hereinafter Policy Book]. According to the Policy Book, a label "may bear the phrase ‘Product of the U.S.A.’ " if "[t]he product is processed in the U.S. (i.e., is of domestic origin)." Id. at 147. Under this view, as the FSIS explained in regulatory commentary, this label "applie[s] to products that, at a minimum, have been prepared in the United States" and does not "mean that the product is derived only from animals that were born, raised, slaughtered, and prepared in the United States." Product Labeling: Defining United States Cattle and United States Fresh Beef Products, 66 Fed. Reg. 41160, 41160–61 (advance notice of proposed rulemaking Aug. 7, 2001).³

Notably, this permissive interpretation of what qualifies as a "Product of the U.S.A." has not always been the governing standard; from 2008 to 2015, Congress took a more restrictive approach to country-of-origin labeling. Specifically, in 2008, Congress implemented a new law that established four categories for country-of-origin labeling: United States origin, multiple countries of origin, imported for immediate slaughter, and foreign country of origin. Food, Conservation, & Energy Act of 2008, Pub. L. No. 110-234, § 11002, 122 Stat. 923, 1351–54 (2008). But this new law generated several years of international-trade issues with Canada and Mexico, including two disputes before the World Trade Organization and more than $1 billion in retaliatory tariffs imposed against the United States. See generally Joel L. Greene, Cong. Rsch. Serv., RS22955, Country-of-Origin...