Metropolitan News-Enterprise

 

Wednesday, March 14, 2018

 

Page 1

 

Ninth Circuit:

Actions Over ‘Made in U.S.A.’ Label Were Properly Dismissed

Panel: Present California Statute, Allowing Claim Despite Some Ingredients From Other Countries, Must Be Applied Rather Than No-Exceptions Law in Effect When Products Were Bought

 

By a MetNews Staff Writer

 

Plaintiff Susan Fitzpatrick sued Tyson over its claim that “Grillers,” under the “Nudges” label, are “Made in USA” although some ingredients, such as tapioca, come from outside the United States.

 

The Ninth U.S. Circuit Court of Appeal yesterday affirmed the dismissal of a woman’s actions against two pet food manufacturers that represented their products as “Made in USA” when some of the ingredients came from other countries.

A three-judge panel rejected the contention of Susan Fitzpatrick that California law, in effect at the time she purchased the products, should be applied.

Fitzpatrick sued Tyson Foods, Inc., and Big Heart Pet Brands.

With respect to Tyson, she alleged—in what she intended as a $5 million class action—that she bought a dog treat, “Grillers,” marketed under the “Nudges” label, at various times in 2014 and 2015. Packages bore the words “MADE IN USA.”

Allegations of Complaint

According to Fitzpatrick’s complaint:

“The labels stating that Defendant’s pet food is made in the United States are false because Defendant’s pet food contains ingredients sourced from foreign country. For example, these products contain tapioca, as well as vitamin, mineral, and amino acid packs sourced outside the United States.”

The pleading added:

“The buying public’s preference for pet foods and treats that are made exclusively in the United States stems in part from the widely-publicized and widespread recall of pet foods in 2007, when hundreds, and perhaps thousands, of dogs died of renal failure after being fed pet foods containing gluten sourced from China that turned out to be adulterated with toxic chemicals.”

Pre-2016 Version

At the time she made her purchases, Business and Professions Code §17533.7 rendered it “unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or on its container there appears the words ‘Made in U.S.A.,’ ‘Made in America,’ ‘U.S.A.,’ or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.”

Her action against Tyson was brought on Jan. 11, 2016, on the basis of the statute as it read prior to Jan. 1 of that year. Under an amendment to the statute, products could be represented as made here if not more than five percent of the ingredients came from another nation, or if they comprised not more than 10 percent of the volume and were not available domestically.

U.S. District Judge John A. Mendez of the Eastern District of California on Sept. 27, 2016, dismissed the action, saying that although the amendment was not expressly retroactive, where a right is statutory and no rights have vested, repeal or amendment to a statute that renders previously proscribed conduct permissible is given application in present proceedings.

The plaintiff was granted leave to amend; she didn’t; the case was dismissed with prejudice on Oct. 4, 2016.

Fitzpatrick’s action against Big Heart, owned by jam-maker J.M. Smucker Company, was filed Jan. 1, 2016. It was dismissed with leave to amend on the same day as the action against Tyson, with Mendez specifying that it was for the same reasons; there was no amendment and it was dismissed it with prejudice also on Oct. 4.

Memorandum Opinion

The Ninth Circuit said yesterday:

“The district court properly determined that the current version of California Business and Professional Code § 17533.7 governs Fitzpatrick’s claims. Although the statute does not apply retroactively, in amending § 17533.7, the California legislature enacted a change in legislative policy, shifting from strict liability to allow certain previously prohibited conduct under certain exceptions, amounting to a statutory repeal.”

It added:

“Because Fitzpatrick had no vested rights in her claims before the current version of §17533.7 went into effect, her claims are governed by the current version of that statute.”

Causes of action under California’s consumer protections statutes were also correctly dismissed, the panel said, inasmuch as “the amended version of § 17533.7 expressly makes lawful the labeling of products that contain certain amounts of foreign-sourced ingredients as ‘Made in the USA.’ ”

The case is Fitzpatrick v. Tyson Foods, Inc., No. 16-17038.

 

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