Aleta Lilly v. Conagra Foods, Inc.

Filing

FILED OPINION (BARRY G. SILVERMAN, ANDREW D. HURWITZ and C. ROGER VINSON) REVERSED AND REMANDED. Judge: BGS Authoring, Judge: ADH , Judge: CRV Dissenting. Lilly s pending motion for judicial notice is denied as moot.FILED AND ENTERED JUDGMENT. [8984590]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ALETA LILLY, on behalf of herself
and all others similarly situated,
Plaintiff-Appellant,
v.

No. 12-55921
D.C. No.
2:12-cv-00225RGK-SH

CONAGRA FOODS, INC., a Delaware
corporation,
Defendant-Appellee.

OPINION

Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
Argued and Submitted
February 6, 2014—Pasadena, California
Filed February 20, 2014
Before: Barry G. Silverman and Andrew D. Hurwitz,
Circuit Judges, and C. Roger Vinson, Senior District
Judge.*
Opinion by Judge Silverman;
Dissent by Judge Vinson
*

The Honorable C. Roger Vinson, Senior District Judge for the U.S.
District Court for the Northern District of Florida, sitting by designation.

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LILLY V. CONAGRA FOODS
SUMMARY**

Federal Preemption
The panel reversed the district court’s dismissal, based on
federal preemption, of plaintiff’s putative class action raising
California state law claims and challenging the labeling of
sunflower seed packages.
The panel held that the sodium content of the edible
coating added to sunflower seed shells must, under federal
law, be included in the nutritional information disclosed on a
package of sunflower seeds. The panel further held that
because plaintiff’s state-law claims, if successful, would
impose no greater burden than those imposed by federal law,
plaintiff’s state law claims were not preempted.
District Judge Vinson dissented, and would hold that the
district court correctly concluded that plaintiff’s attempt to
require the manufacturer to use different labeling was
expressly preempted by the federal Nutrition Labeling and
Education Act, and the manufacturer had fully complied with
the applicable Food and Drug Administration regulation.

**

This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

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LILLY V. CONAGRA FOODS

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COUNSEL
Rosemary M. Rivas (argued) and Danielle A. Stoumbos,
Finkelstein Thompson, LLP, San Francisco, California, for
Plaintiff-Appellant.
Patrick E. Brookhouser, Jr. (argued), Lauren R. Goodman,
and Noah Priluck, McGrath North Mullin & Kratz, PC LLO,
Omaha, Nebraska, for Defendant-Appellee.

OPINION
SILVERMAN, Circuit Judge:
Some days we are called upon to consider such profound
issues as eleventh-hour death penalty appeals, catastrophic
threats to the environment, intense and existential questions
of civil and human rights, and the most complicated,
controversial problems in civil, criminal and administrative
law. Today we consider the coating on sunflower seeds.
In her putative class action complaint, the plaintiff alleges
that the tasty coating placed on sunflower seed shells is
intended to be ingested – and is ingested – before the inedible
shell is spat out and the kernel eaten; that is what is expected
before expectoration. Therefore, the sodium content in a
“serving” of sunflower seeds, as stated on the package, must
include the sodium contained in the edible coating.
Taking those allegations as true for the purposes of a
motion to dismiss, we hold today that the sodium content of
the edible coating added to sunflower seed shells must, under
federal law, be included in the nutritional information

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LILLY V. CONAGRA FOODS

disclosed on a package of sunflower seeds. Because
plaintiff’s state-law claims, if successful, would impose no
greater burden than those imposed by federal law, her state
law claims are not preempted. We reverse the granting of the
defendant’s motion to dismiss.
FACTUAL BACKGROUND
ConAgra Foods, Inc. sells several varieties of sunflower
seeds under its “David” brand, including some in which the
shells of the seeds are coated with salts, seasonings, and/or
flavorings. Lilly sued ConAgra as a representative of a class
of consumers who purchase these seeds. Lilly’s central
allegation was that ConAgra’s nutrition labeling violates
California law by misrepresenting the sodium content of the
sunflower seeds by focusing exclusively on the kernels.
More specifically, Lilly alleged that the listing of sodium in
the Nutrition Facts Panel of these seeds either does not
disclose the sodium content of “the sunflower seeds and the
shell in the Nutrition Facts at all” or does not state the “salt
content of the sunflower kernels and shells in equal
prominence as it does the salt content of the sunflower
kernels.”
Lilly alleged that “ConAgra’s Sunflower Seeds’ packages
expressly state that the intended manner for consuming the
Sunflower Seeds is to place the entire shell and the kernel in
the mouth.” The complaint quoted the directions on the
packaging itself: “[C]rack the shell with your teeth, eat the
seed and spit the shell. Experienced seeders pop a handful of
seeds in their mouth and store them in one cheek, then
transfer a seed over to the other side with their tongue, crack
it, then eat the seed and split [sic] the shell.” Lilly alleged
that consumers following these instructions “ingest some, if

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not all, of the sodium from the sunflower seeds’ shell which
is not reflected in the Nutrition Facts of the Products.” Lilly
alleged that minimizing or altogether ignoring the sodium
content on the shells in the label is misleading and that
ConAgra had a duty to disclose the sodium content of both
the “Sunflower Seeds’ kernel and shell.”
Lilly asserted causes of action under three California
statutes: the Consumer Legal Remedies Act (Cal. Civ. Code
§ 1750 et seq.), the False Advertising Laws (Cal. Bus. & Prof.
Code § 17500 et seq.), and the Unfair Competition Law (Cal.
Bus. & Prof. Code § 17200 et seq.). ConAgra moved to
dismiss the complaint, arguing that federal law expressly
preempted these state law claims as they would impose food
labeling requirements different from those required by federal
law. The district court agreed, ruling that Lilly sought “to
impose an additional sodium labeling requirement that [was]
not identical to the” Nutrition Labeling and Education Act
(21 U.S.C. § 343) and thus her “state law claims [were]
expressly preempted.” Lilly timely appealed.
DISCUSSION
We have jurisdiction to review this appeal under
28 U.S.C. § 1291. We review an order granting a motion to
dismiss de novo. Cousins v. Lockyer, 568 F.3d 1063, 1067
(9th Cir. 2009). “All well-pleaded allegations of material fact
in the complaint are accepted as true and are construed in the
light most favorable to the non-moving party.” Faulkner v.
ADT Sec. Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013)
(citations omitted). We also review questions of statutory
interpretation and preemption de novo. Aguayo v. U.S. Bank,
653 F.3d 912, 917 (9th Cir. 2011).

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The statutory and regulatory framework undergirding this
case is straightforward. The Federal Food, Drug, and
Cosmetic Act of 1938, 21 U.S.C. §§ 301 et seq., governs the
labeling of food, drugs, cosmetic products and medical
devices. Congress amended the FDCA in 1990 by enacting
the Nutrition Labeling and Education Act, which established
uniform food labeling requirements, including the familiar
and ubiquitous Nutrition Facts Panel found on most food
packages. NLEA requires that a food’s label include the
amount of sodium “in each serving size or other unit of
measure.” 21 U.S.C. § 343(q)(1)(D). NLEA also provides
that no state may “directly or indirectly establish . . . any
requirement for the labeling of food that is not identical” to
the federal requirements. 21 U.S.C. § 343-1(a)(5). The
phrase “not identical to” means “that the State requirement
directly or indirectly imposes obligations or contains
provisions concerning the composition or labeling of food
[that] . . . [a]re not imposed by or contained in the applicable
[federal regulation] . . . or [d]iffer from those specifically
imposed by or contained in the applicable [federal
regulation].” 21 C.F.R. § 100.1(c)(4).
The United States Food and Drug Administration has
promulgated various regulations that are relevant to how a
serving of sodium is to be calculated. First, the regulations
require that the “[n]utrition information relating to food shall
be provided for all products intended for human
consumption.”
21 C.F.R. § 101.9(a). Second, the
“declaration of nutrient and food component content shall be
on the basis of the food as packaged or purchased.”
21 C.F.R. § 10 1.9(b)(9). Lastly, and most importantly for
our purposes, the amount of sodium in the food is “based on
only the edible portion of food, and not bone, seed, shell, or
other inedible components.” 21 C.F.R. § 101.12(a)(6).

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In ConAgra’s view, Lilly’s lawsuit is an attempt to force
ConAgra into including the sodium content of an inedible
portion of the food – the shell of the sunflower seed. Because
the FDA regulations state that manufacturers need not include
the amount of sodium on “inedible components,” ConAgra
asserts that Lilly’s suit is expressly preempted by federal law.
See 21 U.S.C. § 343-1(a)(5) (no state may “directly or
indirectly establish . . . any requirement for the labeling of
food that is not identical” to the federal requirements);
Williamson v. Mazda Motor of Am., Inc., __ U.S. __ , 131
S. Ct. 1131, 1136 (2011) (federal law preempts any state law
that “‘stands as an obstacle to the accomplishment and
execution of [its] full purposes and objectives’”) (quoting
Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).
But ConAgra’s argument simply ignores the fact that
while the shells themselves are inedible, the coatings put on
top of the shells most certainly are not inedible. To the
contrary, the coatings impart flavor and are indisputably
intended to be ingested as part of the sunflower seed eating
experience. Indeed, these coatings come in flavors such as
“Ranch” and “Nacho Cheese” precisely because they are to
be consumed before the shell is discarded. The shell is not
edible, but the coating is and is intended to be. Federal law
requires that the sodium listings include the “edible
portion”of a food. For that reason, the portion of the edible
coating on the shell must be accounted for in the calculation
of the sodium content. The asserted state law requirements
that Lilly seeks to impose here are thus no different from
federal law and not preempted.
ConAgra argues in the alternative that dismissal of the
complaint was appropriate because no reasonable consumer
would be deceived by its labeling. More specifically,

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ConAgra argues that since the Nutrition Facts Panel on the
sunflower seeds references only the kernels, any reasonable
consumer would understand that the sodium listing did not
include the amount on the shells.
The district court never reached this issue, and as we have
noted before, “‘whether a business practice is deceptive will
usually be a question of fact not appropriate for decision on
[a motion to dismiss].’” Davis v. HSBC Bank Nev., N.A.,
691 F.3d 1152, 1162 (9th Cir. 2012) (quoting Williams v.
Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008)). This
is the situation here. There may be any number of factspecific reasons for why ConAgra’s sodium-content labeling
does not violate the California statutes invoked by Lilly. But
these issues must await summary judgment or trial. The
question before us at this point is whether Lilly’s action is
facially preempted by federal law. It is not.
REVERSED and REMANDED.1

VINSON, District Judge, dissenting:
“A regulation should be construed to give effect to the
natural and plain meaning of its words.” Crown Pacific v.
Occupational Safety & Health Review Comm’n, 197 F.3d
1036, 1038–39 (9th Cir. 1999) (quotation marks and citation
omitted). The critical regulation here naturally and plainly
states that the amount of sodium for food labeling purposes
is “based on only the edible portion of food, and not bone,

1

Lilly’s pending motion for judicial notice is denied as moot.

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seed, shell, or other inedible components.” 21 C.F.R.
§ 101.12(a)(6) (emphasis supplied). It is undisputed that the
sunflower seed shells at issue in this case are inedible. Thus,
it seems apparent to me that the District Court correctly
concluded that Lilly’s attempt to require ConAgra to use
different labeling in California is expressly preempted by the
NLEA, and ConAgra has fully complied with the applicable
FDA regulation. Food companies have the option of
including clarifying statements about the inedible portions —
and some have — but they are not required to do so.
Although we might prefer a regulation that includes the
shell’s absorbed salt and to draw a distinction between an
edible “coating” and an inedible shell, we are nonetheless
bound to apply this unambiguous regulation objectively as it
has been written. In my view, it is not currently written to
allow such a nuanced distinction. The FDA could, of course,
have drafted the regulation in any detail that it wanted (and it
could still do so now), making distinctions such as the one
favored by the majority today.1 Because courts are not —
and should not be — in the regulation-writing business, I
believe we should leave that task to the FDA in the first
instance.
Therefore, I respectfully dissent.

1

Despite our wishes otherwise, there are no page or word limits on
federal regulations. In its rulemaking proceeding and in the exercise of its
regulatory discretion, the FDA could have easily provided that the amount
of sodium for food labeling purposes is “based on only the edible portion
of food, and not bone, seed, shell, or other inedible components, but salt
added to the inedible components and intended for consumption must be
included.” However, it did not.