A federal appeals court has cleared the way for parents to move ahead with a class action lawsuit seeking a payday from the makers of Sprout baby food pouches under a California food labeling law, even though that state law all but copies and pastes the food labeling rules contained in a federal law that doesn't allow such private lawsuits.
On June 28, a divided three-judge panel of the U.S. Ninth Circuit Court of Appeals overturned the ruling of a San Francisco federal judge who had tossed the lawsuit after finding the legal action under California law wrongly represented an attempt to sidestep the federal law.
The case centered on a class action lawsuit that had been first filed in 2022 in the U.S. District Court for the Northern District of California in San Francisco against Florida-based Sprout Foods Inc.
U.S. Ninth Circuit Court of Appeals Judge Mary Schroeder
| U.S. Ninth Circuit Court of Appeals
The lawsuit accused Sprout of allegedly wrongly including nutritional info about its pureed baby food on the outside of its squirt pouches. According to court documents, the products allegedly improperly boasted various nutrient content, such as a pouch that proclaims the product contained "3g of Protein, 5g of Fiber and 300mg Omega-3 from Chia ALA."
According to the lawsuit, such nutritional claims are barred by federal and California state laws, purportedly out of concern that adult nutritional targets may not necessarily translate to foods intended to be consumed by babies.
The appellate decision, for instance, notes the Food and Drug Administration wished to prevent baby food makers from using claims about low fat, cholesterol and sodium content, as well as high fiber, to persuade parents to purchase their products believing they are healthier options for their young children.
The court documents indicate the FDA lacked evidence to decide how to set such nutritional standards for babies, and therefore prohibited "nutrient content claims on food products intended for babies under two."
"The agency was clearly concerned that such labeling could lead consumers to believe that a product was good for babies when the agency had no basis for such conclusions," the judges noted.
However, the lawsuit was not brought under federal rules spelled out in the federal Food Drug and Cosmetic Act (FDCA.) That law does not include a provision allowing the law's rules to be enforced through private lawsuits, known formally as a "right of private action."
Rather, the lawsuit was brought under California's state version of the FDCA, known as the Sherman Law. That law incorporates the same rules as the FDCA. The federal law doesn't prevent states from adopting their own labeling standards. However, it requires that those standards cannot exceed those enacted by Congress and set by the FDA.
But while the California law mirrors those federal rules, it also allows for lawsuits to enforce those standards.
In response to the lawsuit, attorneys for Sprout asked Northern California District Judge Richard Seeborg to toss the action, arguing the state of California can't essentially copy-and-paste the federal standards, and then allow plaintiffs to use those standards to sue, when the federal law doesn't allow such actions.
They said the federal government didn't intend for states to be able to open a back door for potentially costly class action lawsuits, when the federal lawmakers expressly decided not to allow them.
Seeborg agreed and tossed the action.
On appeal, however, two out of three judges who heard the case for the U.S. Ninth Circuit Court of Appeals said Seeborg's decision was wrong.
The 2-1 appellate decision was authored by Judge Mary M. Schroeder. Judge Roopali H. Desai concurred in the ruling.
Judge Daniel P. Collins dissented.
The majority noted several federal courts, including the Ninth Circuit, have previously ruled that such lawsuits aren't blocked merely because they copied the FDCA. They said neither Sprout nor Judge Collins, in dissent, can show why Congress would allow states to pass laws and not include language preempting such lawsuits, while simultaneously intending for the law to block such lawsuits.
"In contending that enforcement of the Sherman Law is preempted, Sprout can do no more than point to the federal origin and content of the state’s labeling standards," Schroeder said. "Sprout ignores that Congress permitted identical state laws and offers no explanation for why Congress would want states to enact laws that its citizens cannot enforce."
They noted the California Supreme Court has similarly ruled that the federal law doesn't bar private lawsuits under the state Sherman Law.
The majority said Sprout and Collins "would fashion a rule found in none of the cases but that it contends follows from them: to avoid preemption, the state law's substance must be identical to the federal standards but derive from a source 'independent' of the federal law," Schroeder wrote for the majority.
"... Statutory causes of action to enforce identical state standards that Congress permitted must also survive implied preemption."
The majority also decided to resurrect the lawsuit's unjust enrichment claim against Sprout, because the Sherman Act claim now also allows for them to demand money damages.
The majority, however, agreed with Sprout that the company's labeling practices didn't amount to fraud, and so dismissed the fraud claim.
In dissent, Collins said the majority was wrong to let the lawsuit move forward. Because the federal law expressly prohibits private lawsuits under federal labeling rules, Collins said the law also carries with it an implied preemption against letting such lawsuits advance under identical state law claims, instead.
"... We have repeatedly held that FDCA ... impliedly preempts state-law causes of action that have no independent substance apart from an explicit parasitic reliance on the FDCA's provisions," Collins wrote.
He said the answer to the question of "Why would Congress 'permit states to enact particular legislation and then deny enforcement by their citizens? ... has an obvious answer."
"By mirroring the FDCA itself ... the 'identical' state law could likewise provide for enforcement by state authorities and could perhaps allow those authorities, in such a public suit in state court, to obtain additional remedies (monetary or otherwise) that are not afforded by the FDCA," Collins said.
"... Had it wanted to do so, Congress could have added private enforcement authority to the new food-labeling provisions, but it did not. However, under the majority's reading, simply by enacting a single sentence that indiscriminately incorporates into state law all of the food-labeling regulations adopted under the (federal law), California has succeeded in adding precisely the private enforcement remedy that Congress deliberately withheld when it enacted (the federal law,)" Collins wrote.
Plaintiffs, including named plaintiffs Gillian Davidson and Samuel Davidson, are represented by attorneys Seth A. Safier and Matthew T. McCrary, of the firm of Gutride Safier LLP, of San Francisco and Boulder, Colorado.
Safier did not reply to a request for comment about the decision.
Sprout has been represented by attorneys Elizabeth V. McNulty, Joshua D. Cools, Chad R. Fears and Hayley E. LaMorte, of the firm of Evans Fears & Shuttert LLP, of Newport Beach and Las Vegas.
Sprout did not reply to emails sent by The Record seeking comment on the decision.