Metropolitan News-Enterprise

 

Tuesday, August 14, 2018

 

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Ninth Circuit:

Pre-June 18 Lawsuits Based on Now-Banned Additive Barred

Affirms Dismissal of Action Over Use of Partially Hydrogenated Oil in Sandwiches

 

By a MetNews Staff Writer

 

A woman who says she consumed as many as 100 Fast Bites-brand microwavable sandwiches between 2008 and 2015, when she sued the manufacturer of the product after learning that the Food and Drug Administration had declared that an ingredient in it was no longer “generally recognized as safe,” has lost her bid in the Ninth U.S. Court of Appeals for reinstatement of her dismissed action.

A three-judge panel held Friday that because the FDA gave food-makers until June 18, 2018 to remove partially hydrogenated oil from their products, Shavonda Hawkins’s putative class action against AdvancePierre Foods. Inc., maker of Fast Bites sandwiches, could not be maintained under California’s Unfair Competition Law based on unlawfulness.

As to Hawkins’s cause of action, under state law, based on breach of the implied warranty of merchantability, a three-judge panel said:

“Her allegation that she ‘is a busy person and cannot reasonably inspect’ ingredients in the food she purchases does not excuse her failure to examine the labels on the Fast Bites she purchased.”

California law was applied in an action, under diversity jurisdiction, against an Ohio company.

 

Ad for a product in a line of microwavable sandwiches produced by defendant AdvancePierre.

 

Background of Litigation

The FDA’s determination came on June 17, 2015, following a two-year study of partially hydrogenated oil (“PHO”). Hawkins on Oct. 14, 2015, filed her action in the U.S. District Court for the Southern District of California, alleging:

“Now that its toxic properties are known, few food companies continue to use PHO. Defendant, however, has decided not to follow its more responsible peers and cease using PHO, instead unfairly placing its profits over public health.”

She declared that she has suffered bodily harm because “there is ‘no safe level’ of PHO or artificial trans-fat intake.”

The significance of the determination that PHOs are no longer “generally recognized as safe”(“GRAS”) is that, under the Food, Drug & Cosmetic Act, no food may be introduced into interstate commerce that is “adulterated,” which includes any “food additive,” unless it has a “GRAS” status or consent of the FDA has been sought and granted.

In a 2016 rider to the Consolidated Appropriations Act, it was provided that no PHO “shall be deemed unsafe...and no food that is introduced or delivered for introduction into interstate commerce that bears or contains a partially hydrogenated oil shall be deemed adulterated...by virtue of bearing or containing a partially hydrogenated oil until” June 18, 2018.

District Court Rulings

That proclamation, District Court Judge John A. Houston of the Southern District of California said in dismissing Hawkins’s action with prejudice on Nov. 8, 2016, represented “a clear step by Congress to preclude parties, like Plaintiff, from bringing suit against food manufacturers based on use of PHO before the compliance date.”

He wrote that Hawkins’s “current action is one of the frivolous suits that Congress meant to preclude until 2018.”

Houston also found federal law to be preemptive based on the FDA’s action, explaining:

“All of Plaintiffs state claims are premised on Defendant’s use of PHO in its microwavable sandwiches. As Defendant aptly explains, Plaintiffs claims are an attempt to make it ‘immediately unlawful’ under California law to market or sell any food product that contains PHO….However, the FDA considered and rejected recommendations that the Final Determination should be effective immediately….Instead, the FDA selected a compliance date three years in the future so affected parties could petition for and receive approval from the FDA to use PHO in their products, or exhaust current inventory of food products that may contain PHO and create new products sans PHO.”

Houston continued:

“By providing advance notice of the compliance date, the FDA hoped to minimize market disruptions….Here, allowing Plaintiff’s remaining state claims to go forward would contravene the FDA’s regulatory scheme on the current use of PHO in food products and directly impede the goals and objectives of that scheme. It would seriously disrupt the market by causing food manufacturers to immediately throw out all existing products containing PHO without affording manufacturers time to reformulate the products, find alternative ingredients to PHO, and manufacture the revamped products. These are consequences that the FDA explicitly sought to avoid.”

Oral Argument

Whether the FDA’s action and the 2016 congressional utterance precluded liability based on federal preemption was a focus of oral argument in the case, which took place April 12 in Pasadena before Circuit Judges Milan Smith and Mary Schroeder, joined by District Court Judge Edward M. Chen of the Northern District of California, sitting by designation.

San Diego attorney Gregory S. Weston, arguing for Hawkins, said the federal government has, on no occasion, evinced a desire to block state or local entities from precluding uses of PHOs. He contended the FDA “was fully aware” when it acted in 2015, of such efforts, pointing, by way of example, to a Cleveland, Ohio ordinance barring use of PHOs in restaurants and California’s own ban on serving unlabeled food products to school students containing such oils.

California consumer protection laws may thus be applied to a case involving use of PHOs, Weston asserted.

Andrew Cox, of the Cleveland firm of Thompson Hine LLP, insisted that there is a “small spot” where states may bar PHOs, but that if California were broadly to ban PHO in products sold within the state, “that would be a direct conflict with federal law.”

In light of the Consolidated Appropriations Act, he submitted, Hawkins’s “case theory is rejected.”

Issues Cast Aside

Friday’s Ninth Circuit decision does not mention that act, and skirts the matter of federal preemption, saying that the court will “assume without deciding that Hawkins’s claims are not preempted by federal law.”

Hawkins’s claim under California’s Unfair Competition Law, it says, requires a showing of an “unlawful, unfair or fraudulent business act or practice.” The opinion notes that a “claim under the ‘unlawful’ prong requires a predicate violation of another law,” and underscores that “federal law did not prohibit PHOs prior to June 18, 2018.”

The opinion notes that “Hawkins’s complaint also cited a provision of California’s Sherman Act that adopted federal law,” referring to the Cartwright Act, and said that “AdvancePierre’s use of PHOs did not violate this provision because it did not violate federal law.”

There was, it continued, no showing of “unfairness,” as that term is viewed under California law.

AdvancePierre on June 6, 2017 became a wholly owned subsidiary of Tyson Foods, Inc.

The case is Hawkins v. AdvancePierre Foods, No. 16-56697.

Hawkins has also sued Kellogg Company, in connection with use of PHO in its product Mother’s Cookies (April 2, and Kroger, based on PGHO in its flour,

Pending before the Ninth Circuit is Hawkins’s appeal from dismissal of her action against the Cincinnati-based Kroger. She alleges that Kroger-brand breadcrumbs were represented as containing “0g Trans Fat” when they actually did contain low levels of PHO.

Hawkins has also sued Kellogg Company, in connection with use of PHO in its product Mother’s Cookies, but dismissed its appeal on April 2.

 

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