Brown et al v. The Hain Celestial Group, Inc.

Filing 58

Order by Magistrate Judge Laurel Beeler denying 27 Motion to Dismiss.(lblc1, COURT STAFF) (Filed on 8/1/2012)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 Northern District of California 10 San Francisco Division ROSMINAH BROWN, et al., 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 No. C 11-03082 LB Plaintiffs, ORDER DENYING MOTION TO DISMISS v. 13 THE HAIN CELESTIAL GROUP, INC., [ECF No. 27] 14 15 Defendant. _____________________________________/ 16 17 I. INTRODUCTION Plaintiff Rosminah Brown,1 on behalf of herself and all similarly-situated individuals (defined as 18 those who purchased products from Defendant The Hain Celestial Group, Inc. during the four-year 19 period defined in the complaint) alleges that Defendant manufactures, distributes and/or sells 20 cosmetic products (also referred to as personal care products) that are marketed, labeled and sold as 21 “organic” in violation of section 110838 or 110839 of the California Health & Safety Code (part of 22 the California Organic Products Act of 2003 or “COPA”), section 17200 of the California Business 23 & Professions Code (California’s Unfair Competition Law or “UCL”), section 1750 of the 24 California Civil Code (the California Legal Remedies Act or “CLRA”), and section 2313 of the 25 26 27 28 1 On April 26, 2012, the court granted the parties’ stipulation to dismiss Plaintiff Center for Environmental Health. C 11-03082 LB ORDER 1 California Commercial Code. Complaint, ECF No. 1 at 11, ¶ 4 and 13, ¶¶ 14-15.2 Defendant now 2 moves to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(h)(3), arguing that 3 all of the claims rely on an alleged violation of California state law – that the single product 4 purchased by the Plaintiff did not contain 70% organic agricultural content as purportedly required 5 by section 11038(a) of the California Health & Safety Code – and that such a provision is expressly 6 preempted by the federal Organic Foods Production of 1990 (“OFPA”). Motion to Dismiss, ECF 7 No. 27 at 6-7. 8 9 The court denies Defendant’s motion because the state law claims at issue are not expressly preempted by OFPA and there are no obvious conflicts from the information presented. 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 II. BACKGROUND A. Factual Allegations and Procedural History On May 11, 2011, Plaintiff filed a putative class action complaint in the Superior Court of the 13 State of California, County of Alameda, against Defendant. Complaint, ECF No. 1 at 9. The 14 complaint alleges that Defendant manufactures and sells cosmetic products sold under the JASON 15 and Avalon Organics brands in California. Id. at 10, ¶ 1. Plaintiff alleges that Defendant has 16 marketed and labeled those products as “organic” products based on the JASON brand’s tagline of 17 “Pure, Natural & Organic” and the use of the word “organics” in the “Avalon Organics” brand 18 name. Id. Plaintiff alleges that such uses of the word “organic” are misleading because the products 19 do not meet state law requirements under COPA. Id. at 10-11, ¶¶ 1, 3-4. Plaintiff alleges that 20 Defendant used the terms “organic”and “organics” as described above in recognition of the fact that 21 consumers will pay more for organic products. Id. at 10, ¶ 2. 22 More specifically, Plaintiff alleges that she purchased a single Hain Celestial product, JASON 23 Ester-C Super-C cleanser Gentle Face Wash, in approximately September 2009. Id. at 11-12, ¶ 5. 24 Plaintiff alleges that she believed that the face wash “was either completely or at least mostly 25 organic” based on the appearance of the word “organic” in the “Pure, Natural & Organic” tagline 26 27 28 2 Citations are to the Electronic Case File (“ECF”) with pin cites to the electronic page number at the top of the document, not the pages at the bottom. C 11-03082 LB ORDER 2 1 appearing on the product’s front label. Id. Plaintiff alleges that the product contains less than 70% 2 organic ingredients in violation of COPA. Id. at 10-11, ¶¶ 1, 3-4. Plaintiff alleges that out of the 19 3 ingredients listed in small print on the back of the bottle, only one is certified organic. Id. at 14, 4 ¶ 17. Plaintiff alleges that the sole “certified organic” ingredient, Aloe Barbadensis (Aloe Vera) 5 Leaf Gel, is not the most prominent of the nineteen ingredients, ranking ninth on the ingredient list 6 in terms of its predominance in the product. Id. 7 Plaintiff asserts violations of section 110838 or 110839 of the California Health & Safety Code 8 (part of the California Organic Products Act of 2003 or “COPA”), section 17200 of the California 9 Business & Professions Code (California’s Unfair Competition Law), section 1750 of the California Civil Code (the California Legal Remedies Act), and section 2313 of the California Commercial 11 Code. Id. at 11, ¶ 4 and 13, ¶¶ 14-15. 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 Defendant removed the action on June 22, 2011. Notice of Removal, ECF No. 1 at 1. On March 13 2, 2012, Defendant filed the instant motion to dismiss. ECF No. 27 at 1. Defendant and Plaintiff 14 filed requests for judicial notice with each of their papers. See ECF Nos. 28, 33, and 35. 15 Additionally, Plaintiff seeks leave to file a supplemental request for judicial notice. ECF No. 36 at 16 1. Defendant opposes this request, arguing that Plaintiff did not comply with the local rules and that 17 the supplemental request is actually a disguised sur-reply. ECF No. 37 at 2. On July 12, 2012, 18 Defendant submitted its own Statement of Supplemental Authority. ECF No. 53. Plaintiff objects to 19 Defendant’s request, arguing that Defendant did not comply with the local rules and that the 20 supplemental authority is irrelevant. ECF No. 55 at 2. Defendant submitted a response to Plaintiff’s 21 Opposition, in part acknowledging its failure to comply with the Civil Local Rules. ECF No. 56. 22 The court may take judicial notice of matters of public record without converting a motion to 23 dismiss into a motion for summary judgment. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th 24 Cir. 2001). Because all of the documents are public records or are capable of accurate and ready 25 determination by resort to sources whose accuracy cannot be reasonably questioned, the court may 26 properly take judicial notice of the undisputable facts contained in them. See Hotel Employees & 27 Rest. Employees Local 2 v. Vista Inn Mgmt. Co., 393 F. Supp. 2d 972, 978 (N.D. Cal. 2005); Fed. R. 28 Evid. 201(b). The court grants the unopposed requests for judicial notice filed at ECF Nos. 28, 33 C 11-03082 LB ORDER 3 1 and 35. Because the court did not rely on the material in Plaintiff’s supplemental request for judicial 2 notice and the request improperly included counter-arguments to Defendant’s reply, the court denies 3 Plaintiff’s request. Similarly, because the court did not rely on the material in Defendant’s statement 4 of supplemental authority and the statement was submitted after the noticed hearing took place in 5 violation of Civil L.R. 7-3(d), the court denies Defendant’s request. 6 B. Regulatory History 7 8 9 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 1. The Organic Foods Products Act and the NOP’s Production and Labeling Standards for Agricultural Products The purpose of the OFPA is: (1) to establish national standards governing the marketing of certain agricultural products as organically produced products; (2) to assure consumers that organically produced products meet a consistent standard; and (3) to facilitate interstate commerce in fresh and processed food that is organically produced. 13 14 7 U.S.C. § 6501. OFPA directed the United States Department of Agriculture (“USDA”) to 15 establish the national standards governing agricultural products marketed as organically produced. 16 Id. at § 6503. The USDA published its final rule implementing OFPA in 2000, creating the National 17 Organic Program (“NOP”). See 65 Fed. Reg. at 80,548 (Dec. 21, 2000) (codified as 7 C.F.R. § 205) 18 (“the Final Rule”). The NOP includes standards for producing and handling organic agricultural 19 products. See, e.g., 7 C.F.R. § 205.201. Also, the regulations govern the use of the term “organic” 20 in the labeling and marketing of such agricultural products. See 7 C.F.R. § 205.300. The statute 21 requires that agricultural products labeled as organic be certified as meeting the requirements of the 22 regulations by an agent accredited by the USDA, and forbids the labeling as organic of products that 23 have not been certified as such. 7 U.S.C. §§ 6514(a), 6515, 6519. Another court in this district 24 found that “[t]he NOP provisions governing the production, marketing, and labeling of ‘organic’ 25 products are complex, detailed, and specific.” All One God Faith, Inc. v. Hain Celestial Group, Inc., 26 No. C 09–03517 JF (HRL), 2011 WL 4433817, at *2 (N.D. Cal. Sept. 22, 2011). 27 28 C 11-03082 LB ORDER 4 1 2. Enforcement of Organic Product Standards 2 OFPA generally is the exclusive federal mechanism for evaluating whether agricultural products 3 may be labeled and marketed as “organic” and for challenging decisions made by the USDA 4 pursuant to that mechanism. Id. As the court in All One God Faith found, there is no private right 5 of action to enforce OFPA or its implementing regulations. 2011 WL 4433817, at *3 (citing 7 6 U.S.C. § 6519). 7 The Final Rule provides that “[t]he NOP is ultimately responsible for the oversight and 8 enforcement of the program, including . . . cases of fraudulent or misleading labeling.” 65 Fed. Reg. 9 at 80,557. The USDA has indicated that it accepts all consumer and business complaints regarding 10 alleged misuse of the word “organic” but has rejected private enforcement actions. Id. at 80,627. 3. Application of OFPA to Personal Care Products 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 OFPA defines the term “agricultural product” as “any agricultural commodity or product, 13 whether raw or processed, including any commodity or product derived from livestock that is 14 marketed in the United States for human or livestock consumption.” 7 U.S.C. § 6502(1). The 15 statute also provides that “no person may affix a label to, or provide other market information 16 concerning, an agricultural product if such label or information implies, directly or indirectly, that 17 such product is produced and handled using organic methods, except in accordance with this 18 chapter.” Id. at § 6505(a)(1)(B). 19 At the end of 2000, during deliberations on the regulations, commenters “asked that the NOP 20 include in the final rule certification standards for cosmetics, body care products, and dietary 21 supplements.” 65 Fed. Reg. at 80,557. The USDA concluded, however, that “[t]he ultimate labeling 22 of cosmetics, body care products, and dietary supplements . . . is outside the scope of these 23 regulations.” Id. 24 As Judge Fogel detailed in All One God Faith, the USDA’s position has changed over time. In 25 May 2002, the USDA issued a “Policy Statement on National Organic Program Scope,” explaining 26 that cosmetic products were eligible for certification under the NOP because they might contain 27 agricultural products. 2011 WL 4433817, at *4. Two years later, in April 2004, the USDA changed 28 its position and stated that producers of personal care and cosmetic products could not seek even C 11-03082 LB ORDER 5 1 voluntary participation in the NOP. Id. In a guidance statement, the USDA stated that OFPA does 2 not extend to personal care products “over which USDA has no regulatory authority.” Id. (quoting 3 guidance statement). 4 In an August 2005 memorandum, the USDA determined that agricultural products may be 5 certified as organic if they comply with the NOP regulations. Def.’s RJN Ex. A, ECF No. 28-1 at 2. 6 And, in April 2008, the USDA confirmed that producers and handlers of personal care products may 7 seek USDA certification: 8 If a cosmetic body care product or personal care product contains or is made up of agricultural ingredients, and can meet the USDA/NOP organic production, handling, processing and labeling standards, it may be eligible to be certified under the NOP regulations . . . . Any cosmetic, body care product or personal care product that does not meet the production, handling, processing, labeling, and certification standards described above, may not state, imply or convey in any way that the product is USDA-certified organic or meets the USDA organic standards. 9 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Pl.’s RJN, Ex. 2, ECF No. 33-1 at 2-3. The USDA also stated: 13 USDA has no authority over the production and labeling of cosmetics, body care products and personal care products that are not made up of agricultural ingredients or do not make any claims to meeting USDA organic standards. Cosmetics, body care products, and personal care products may be certified to other, private standards and be marketed to those private standards in the United States. These standards might include foreign organic standards, eco-labels, earth friendly, etc. USDA’s NOP does not regulate these labels at this time. 14 15 16 17 18 Id. at 3. 19 On April 23, 2010, Miles McEvoy, Deputy Administrator of the NOP, issued an official 20 memorandum stating that the NOP would: (1) work with the Food and Drug Administration 21 (“FDA”) and the Federal Trade Commission regarding the use of the term “organic” in personal care 22 products in order to achieve a “comprehensive approach” across agencies; (2) gather information 23 regarding organic labeling of personal care products in the marketplace; and (3) consider the 24 recommendations of the NOSB on rulemaking – which called for the USDA to regulate organic 25 labeling of personal care products – and take them under advisement for future incorporation.” 26 Def.’s RJN Ex. C, ECF No. 35-3 at 2. 27 Finally, on May 5, 2011, in response to a letter from Judge Fogel inquiring whether the USDA 28 had any pertinent information other than the documents described above in the All One God Faith C 11-03082 LB ORDER 6 1 case, the agency replied that “after considerable research, we do not have any additional information 2 relevant to this case.” 3 4 4. OFPA and State Organic Programs 5 States may develop their own state organic certification programs (“SOP”) under OFPA. 6 Specifically, section 6507(a) permits a governing state official to prepare and submit a plan for the 7 establishment of an SOP to the Secretary of Agriculture for approval. 7 U.S.C. § 6507(a). If an 8 SOP contains more restrictive requirements than those set forth in the NOP regarding the organic 9 certification of farms and handling operations and the production and handling of agricultural requirements must (A) further the purposes of OFPA; (B) be consistent with OFPA; (C) not be 12 For the Northern District of California products that are to be sold or labeled as organically produced under OFPA, the additional 11 UNITED STATES DISTRICT COURT 10 discriminatory towards agricultural commodities organically produced in other states; and (D) only 13 become effective after being approved by the Secretary. Id. at § 6507(b). The USDA contemplated 14 that states “would want to monitor for false claims or misleading labeling” under the regulations and 15 “would forward any complaints to the NOP.” 65 Fed. Reg. at 80,557. 16 5. California Organic Products Act 17 The California Organic Products Act of 2003, Cal. Health & Safety Code, §§ 110810 et seq. 18 (“COPA”) purports to be an approved SOP that prescribes standards for organic products, including 19 the marketing, advertising and labeling of such products. See, e.g., Cal. Health & Safety Code 20 § 110820. COPA prohibits any product handled, processed, sold, advertised, represented, or offered 21 for sale in California from being sold as organic unless it also is prominently labeled and invoiced 22 with similar terminology as set forth by regulations promulgated by the NOP. Cal. Health & Safety 23 Code, § 110830(a) 24 With regard to cosmetics, COPA states, “[c]osmetic products sold, labeled, or represented as 25 organic or made with organic ingredients shall contain, at least 70 percent organically produced 26 ingredients.” Cal. Health & Safety Code § 110838(a). Cosmetic products with less than 70% 27 organically-produced ingredients may identify the organically-produced ingredients only in one of 28 two ways: (1) by identifying each organic ingredient with an asterisk or using the word “organic” in C 11-03082 LB ORDER 7 1 the ingredient list; or (2) by displaying the product’s percentage of organic contents on the 2 information panel. Id. at § 110839. 3 4 COPA is enforceable by “any person” who may bring an action for injunctive relief. Cal. Health & Safety Code § 111910(a). 5 6 III. LEGAL STANDARD “[A] court may determine jurisdiction on a motion to dismiss for lack of jurisdiction under Rule 541 F.3d 1189, 1195 (9th Cir. 2008). A district court may “hear evidence regarding jurisdiction” 9 and “resolv[e] factual disputes where necessary.” Augustine v. United States, 704 F.2d 1074, 1077 10 (9th Cir. 1983). “Once challenged, the party asserting subject matter jurisdiction has the burden of 11 proving its existence.” Rattlesnake Coal. v. E.P.A., 509 F.3d 1095, 1102 n. 1 (9th Cir. 2007). “If the 12 For the Northern District of California 12(b)(1) of the Federal Rules of Civil Procedure.” Kingman Reef Atoll Invs., L.L.C. v. United States, 8 UNITED STATES DISTRICT COURT 7 court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the 13 action.” Fed. R. Civ. P. 12(h)(3); see Saul v. United States, 928 F.2d 829, 832 (9th Cir. 1991) 14 (recognizing that preemption of state claims deprives a federal court of subject matter jurisdiction 15 over preempted claims). 16 “State law is preempted under the Supremacy Clause, U.S. Const., Art. VI, cl. 2, in three 17 circumstances.” English v. Gen. Elec. Co., 496 U.S. 72, 78 (1990) (internal citations omitted). 18 “First, Congress can define explicitly the extent to which its enactments pre-empt state law.” Id. 19 (internal citations omitted). “Preemption fundamentally is a question of congressional intent and 20 when Congress has made its intent known through explicit statutory language, the courts’ task is an 21 easy one.” Id. at 78-79 (internal citations omitted). 22 “Second, in the absence of explicit statutory language, state law is pre-empted where it regulates 23 conduct in a field that Congress intended the Federal Government to occupy exclusively.” Id. at 79. 24 “Such an intent may be inferred from a ‘scheme of federal regulation . . . so pervasive as to make 25 reasonable the inference that Congress left no room for the States to supplement it,’ or where an Act 26 of Congress ‘touch[es] a field in which the federal interest is so dominant that the federal system 27 will be assumed to preclude enforcement of state laws on the same subject.’” Id. (internal citations 28 omitted). “Although this Court has not hesitated to draw an inference of field preemption where it is C 11-03082 LB ORDER 8 1 supported by the federal statutory and regulatory schemes, it has emphasized: ‘Where . . . the field 2 which Congress is said to have preempted’ includes areas that have ‘been traditionally occupied by 3 the States,’ congressional intent to supersede state laws must be ‘clear and manifest.’” Id. (internal 4 citations omitted). 5 “Finally, state law is preempted to the extent that it actually conflicts with federal law.” Id. 6 “Thus, the Court has found preemption where it is impossible for a private party to comply with both 7 state and federal requirements . . . or where state law ‘stands as an obstacle to the accomplishment 8 and execution of the full purposes and objectives of Congress.’” Id. 9 10 IV. DISCUSSION A. Whether OFPA Covers Cosmetics and Preempts State Claims Based on Labeling 1. Whether OFPA Covers Cosmetics 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Defendant argues that the USDA has adopted the following framework with regard to the 13 certification of cosmetics products as organic: a multi-ingredient cosmetic product may, but need 14 not, be certified under the NOP in order to use the word “organic” in accordance with the OFPA. 15 ECF No. 27 at 8 (citing Ex. A, ECF No. 28-1 at 2-3 (August 23, 2005 USDA Guidance 16 Memorandum)). Defendant also cites Judge Fogel’s conclusion that the USDA has asserted 17 jurisdiction over personal care products. Id. (citing All One God Faith, Inc. v. Hain Celestial Group, 18 Inc., No. C 09-03517 JF (HRL), 2010 WL 2133209, at *6 (N.D. Cal. May 24, 2010)). 19 Plaintiff notes that Defendant argued that OFPA does not cover cosmetics in All One God Faith. 20 ECF No. 32 at 21. And Plaintiff points out that the USDA’s final rule implementing the NOP 21 regulations concluded that “cosmetics are outside the scope of the rule.” Id. (quoting 65 Fed. Reg. at 22 80,557). 23 Also, Plaintiff asserts that the typical rationale for preemption of state standards – national 24 uniformity – is expressly limited under OFPA to “certain agricultural products,” which are defined 25 as agricultural products for human (or livestock) consumption. Id. at 16 (citing 7 U.S.C. §§ 6501(1), 26 6502(1)). And Plaintiff quotes a Senate report, which stated, “After September, 1992 no other label 27 will be allowed that claims that a food is in any way organic or organically produced, with specified 28 exceptions regarding State labels and small farmers.” Id. Plaintiff emphasizes the Senate report’s C 11-03082 LB ORDER 9 1 2 use of “food” in its statement. Id. Defendant counters by noting that the definition of “agricultural product” appearing in OFPA is 3 not explicitly restricted to human food. ECF No. 34 at 10 (citing 7 U.S.C. § 6502(1)). Defendant 4 reasons that this means that the statutory term may include non-food products – a conclusion that is 5 supported by USDA’s current construction of the term “agricultural product” as encompassing any 6 compliant product irrespective of the end use of the product. Id. at 10-11 (citing USDA memoranda 7 that authorize certification of finished cosmetic/personal care products). To this, Defendant also 8 notes that the FDA has recognized the USDA’s jurisdiction over “organic” labeling. Id. at 12. 9 10 Additionally, Defendant explains that Congress’s focus on organic food made sense because there were no other classes of organic products at the time. Id. at 11. Defendant further responds to Plaintiff by suggesting that the Final Rule’s statement that the 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 labeling of personal care products was outside the scope of the NOP does not mean that cosmetics 13 fall outside of the jurisdiction of the agency and program. Id. at 11-12. And Defendant notes that 14 the agency has, in fact, changed its position on this issue. Id. at 12. 15 Plaintiff argues that the subsequent USDA guidance memoranda cannot and do not preempt 16 Plaintiff’s state claims. ECF No. 32 at 22. Plaintiff cites out-of-circuit decisions for the proposition 17 that agency actions that have not been vetted through either the formal notice-and-comment 18 procedure or through a formal adjudicative process lack the force of law sufficient to preempt state 19 law. Id. at 22-23. Plaintiff then asserts that the USDA’s only statement regarding cosmetics that 20 carries the force of law, the NOP, expressly disclaims preemptive regulation of state organic 21 labeling claims regarding cosmetics. Id. at 23 (citing 65 Fed. Reg. at 80,557 (“The ultimate labeling 22 of cosmetics, body care products, and dietary supplements, however, is outside the scope of these 23 regulations.”)). Plaintiff also observes that the USDA memorandum relied on by Defendant is silent 24 as to preemption and provides no indication of preemptive intent. Id. Plaintiff asserts that the 25 memorandum’s discussion of voluntary compliance with the NOP for cosmetic products does not 26 bring cosmetics within the limited scope of OFPA preemption. Id. at 23-24. Related to this point, 27 Plaintiff notes that an agency’s jurisdiction over a subject does not necessarily imply that all state 28 claims related to the subject are preempted. Id. at 24, n. 18. C 11-03082 LB ORDER 10 1 Defendant concludes its arguments regarding this issue by describing Judge Fogel’s discussion 2 in All One God Faith, which found that the USDA has asserted jurisdiction over personal care 3 products. ECF No. 34 at 12. 4 OFPA governs the marketing of certain agricultural products as organically-produced products. “agricultural products” is not explicitly limited to food (and it explicitly includes processed 7 material). See 7 U.S.C. § 6502. And the regulations even address multi-ingredient packaged 8 products that contain less than 70% organically-produced ingredients. See 7 C.F.R. § 205.305. 9 Although the phrase “for human or livestock consumption” could be read as limited to agricultural 10 products that are eaten or drunk, the court adopts a broader view that does not rely on the end use of 11 the crops or livestock-derived products but, instead, finds that OFPA covers cosmetics that use such 12 For the Northern District of California It sets certain requirements for the production and handling of these products. Its definition of 6 UNITED STATES DISTRICT COURT 5 products. Having determined that OFPA covers cosmetics, the court turns to the question of 13 whether OFPA preempts all state claims based on labeling. 14 2. Whether OFPA Preempts All State Claims Based on Labeling 15 Defendant argues that Congress supplanted the states and simultaneously vested the exclusive 16 authority to implement the NOP with the USDA. ECF No. 27 at 13. Defendant notes that section 17 6505(a)(1) prohibits interstate commerce in agricultural products that do not meet federal organic 18 standards and prohibits claims that such products meet the federal organic program standards unless 19 they are produced and handled in accordance with the federal rules. Id. at 14. Defendant suggests 20 that this prohibition invalidated and preempted state standards that would impose different product 21 composition requirements than those required by the federal organic scheme because that could 22 thereby alter the application of the federal labeling scheme. Defendant concludes that COPA’s 23 compositional standard is preempted by OFPA. Id. In support of this position, Defendant also 24 points to section 6507, which requires approval by the Secretary of Agriculture for state organic 25 certification programs. Id. at 15. Defendant argues that this provision “conclusively preempts every 26 possible state standard that has not been reviewed by the Secretary.” Id. at 16. 27 28 Plaintiff contends that the federal government regulates the labeling of cosmetics through the Food Drug and Cosmetic Act (“FDCA”) and that OFPA does not contain any statements C 11-03082 LB ORDER 11 1 demonstrating Congressional intent to preempt state organic labeling requirements for cosmetics. 2 ECF No. 32 at 15-16. Plaintiff argues that, instead, OFPA is expressly limited to the regulation of 3 organic food. Id. at 16. 4 Defendant reiterates its arguments regarding the scope of OFPA, which – under Defendant’s 5 view – includes cosmetics. ECF No. 34 at 7. Defendant also contends that no distinction can or 6 should be drawn between the substantive organic criteria set by the NOP and the labeling terms 7 based thereon. Id. at 8 (citing Harvey v. Johanns, 494 F.3d 237, 238 (1st Cir. 2007); In re Aurora 8 Dairy Corp. Organic Milk Mktg. and Sales Practices Litig., 621 F.3d 781, 792 (8th Cir. 2010); 9 Massachusetts Indep. Certification, Inc. v. Johanns, 486 F. Supp. 2d 105, 110 (D. Mass. 2007); All comprehensive pre-market program and, under this scheme, an organic label is authorized by 12 For the Northern District of California One God Faith, 2009 WL 4907433, at *8). Defendant explains its view that the NOP is a 11 UNITED STATES DISTRICT COURT 10 compliance with the substantive organic compositional criteria. Id. at 9. Given this view, Defendant 13 asserts that it is mere semantics to contend that preemption of “labeling” requirements is different 14 than preemption of other “certification” requirements (such as a compositional requirement) or 15 requires special preemptive language. Id. (citing Harvey v. Veneman, 396 F.3d 28, 32 (1st Cir. 16 2005); In re Aurora Dairy, 621 F.3d at 796; 7 C.F.R. § 205. 2). And, in this case, Defendant argues 17 that it is clear that the COPA provision relied upon by Plaintiff is a substantive compositional 18 requirement that is a predicate to their labeling claims and that state law may not circumvent federal 19 requirements by the artifice of a sales prohibition. Id. at 9-10 (citing National Meat Ass’n v. Harris, 20 132 S. Ct. 965, 973 (U.S. 2012); Final Rule at 80,682). 21 Plaintiff also relies on the decision in In re Aurora. ECF No. 32 at 17. Plaintiff asserts that the 22 Eighth Circuit held that section 6507 did not expressly preempt state organic consumer protection 23 and labeling claims on milk products but, instead, applied only to state certification requirements. 24 Id. at 17-18 (citing In re Aurora, 621 F.3d at 792). Plaintiff acknowledges that the Eighth Circuit 25 held that the particular labeling claims at issue in In re Aurora were preempted but notes that it was 26 based on conflict preemption. Id. at 18 n.13. Plaintiff observes that Defendant does not contend that 27 conflict preemption applies here and that no conflict exists based on her view that neither OFPA nor 28 the NOP applies to the cosmetic products and Defendant’s cosmetic products are not certified as C 11-03082 LB ORDER 12 1 2 organic by any certifying agent that is properly certified under OFPA and the NOP. Id. Defendant counters that the In re Aurora case did not involve an attempt to impose state organic 3 dairy product standards and, thus, the case does not stand for the principle that states may impose 4 “labeling” requirements that differ from federal organic labeling requirements outside of section 5 6507’s pre-approval process. Reply, ECF No. 34 at 8. Defendant also notes that in In re Aurora, 6 the court held that unapproved state organic regulations are expressly preempted. Id. (citing 621 7 F.3d at 792). Defendant asserts that In re Aurora therefore compels the conclusion that any organic 8 product standard imposed by a state must be pre-approved by the Secretary under section 6507(b) or 9 it is preempted. Id. claims where the underlying substantive issue is the labeling of products as “organic” under a state 12 For the Northern District of California In sum, Defendant’s fundamental preemption argument is that OFPA preempts any state law 11 UNITED STATES DISTRICT COURT 10 law (here, COPA) because, by the operation of its explicit provisions, Congress gave only to the 13 USDA the authority to make a determination about the validity of a compositional standard for the 14 term “organic.” The essence of Plaintiff’s argument is that there is a strong presumption against 15 preemption and that OFPA does not contain the usual explicit language associated with Congress’s 16 intent to preempt state laws (such as the consumer protection laws at issue here). 17 As a general matter, the court agrees that it is difficult to distinguish labeling and compositional 18 requirements in the context of “organic” products. But, as the Eighth Circuit noted in In re Aurora, 19 OFPA’s only explicit preemptive language involved cutting off independent state certification laws. 20 See 621 F.3d at 792 (citing 7 U.S.C. § 6507). Given this reading of the statute, the Eighth Circuit 21 found that “Congress did not expressly preempt state tort claims, consumer protection statutes, or 22 common law claims.” Id. The undersigned agrees with and follows the Eighth Circuit’s reasoning. 23 OFPA expressly preempts state certification requirements but does not expressly bar state law 24 claims that do not conflict with OFPA’s provisions given the terms of the statute and the 25 presumption against preemption so long as the compositional requirements at issue do not conflict 26 with those set forth in OFPA. And, unlike the facts in In re Aurora, the court cannot discern an 27 obvious substantive conflict between the state and federal definitions of the term “organic” as it is at 28 issue in this case. C 11-03082 LB ORDER 13 1 Moreover, adopting Defendant’s interpretation would mean that a consumer would have no 2 protection against deceptive or fraudulent labeling based on the use of the term “organic.” And the 3 court can envision scenarios where, in the absence of clear congressional intent to do this, the results 4 would be absurd. For example, in the most recent USDA guidance, the agency asserts no authority 5 over the use of private or foreign “organic” certification for personal care/cosmetics products. 6 Under Defendant’s view, a consumer would have no recourse if a producer claimed a product was 7 certified “organic” by a particular private regulatory body where, in fact, the product had not in fact 8 been so certified by that particular private regulatory body. 9 B. Whether COPA’s Compositional Standard Has Been Validly Approved Under OFPA 10 Defendant argues that the provisions of COPA upon which Plaintiff relies should be interpreted only as an authorizing enactment to the state executive branch (and not as provisions creating 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 substantive rights) because OFPA does not permit standards that differ from federal standards, 13 unless and until the state executive (here, the Secretary of the California Department of Food and 14 Agriculture) receives approval from the federal government pursuant to section 6507(b). ECF No. 15 27 at 17-18. 16 Plaintiff counters that COPA’s cosmetics labeling provisions are part of a federally-approved 17 SOP and, thus, are beyond even Defendant’s construction of OFPA preemption. ECF No. 32 at 24. 18 Plaintiff explains that COPA was enacted by the California Legislature in 2003 and was carefully 19 drafted to implement, and avoid any possible conflict with, NOP regulations. Id. at 25. Plaintiff 20 states that in February of 2004, pursuant to 7 U.S.C. §§ 6506 and 6507(a), the USDA authorized the 21 California Department of Food and Agriculture (“CDFA”) to administer an SOP, which 22 encompasses COPA. Id. 23 Defendant responds by arguing that the 2004 letter relied upon by Plaintiff did not authorize any 24 “additional requirements” and was subsequently repudiated as erroneously issued by the USDA in 25 an independent audit conducted by the USDA’s Inspector General. ECF No. 34 at 13. Defendant 26 asserts that the NOP January 21, 2011 Policy Memorandum establishes on its face that the USDA 27 has not granted any additional requirements to California except the “Additional Requirements” that 28 appear in the memorandum. Id. Defendant notes that the memorandum does not mention COPA’s C 11-03082 LB ORDER 14 1 70 percent compositional provision. Id. 2004 to add new registration requirements pursuant to section 6507(b), which cannot and did not 4 supplant the initial approval of the SOP in 2004. ECF No. 32 at 25. Plaintiff further observes that 5 although the USDA is required to review SOPs every five years, it has never objected to California’s 6 enforcement of COPA’s cosmetic provisions as beyond the scope of the 2004 federal approval. Id. 7 Plaintiff also argues that COPA’s cosmetic requirements do not require special USDA approval 8 pursuant to section 6507(b) because they are not more restrictive than NOP labeling standards. Id. 9 at 26. Plaintiff explains that, under both labeling standards, products must have at least 70% organic 10 ingredients in order to include organic claims on the product labels. Id. (citing Cal. Health & Safety 11 Code § 110838; 7 C.F.R. § 205.301(c)). Plaintiff further asserts that, under both COPA and the 12 For the Northern District of California Plaintiff argues that the 2011 approval merely supplemented California’s SOP as approved in 3 UNITED STATES DISTRICT COURT 2 NOP, products that contain less than 70% organic ingredients may only identify the organic content 13 of the product using a designation in the ingredient statement or as a percentage of the total 14 ingredients of the product. Id. (citing Cal. Health & Safety Code § 110839 with 7 C.F.R. § 15 205.305). Plaintiff thus concludes that COPA’s organic labeling requirements for cosmetics are not 16 “more restrictive” than NOP organic labeling requirements and, therefore, no special authorization 17 under section 6507(b) is required for COPA’s cosmetic labeling requirements. Id. 18 Defendant counters with an argument that its product’s labeling was consistent with OFPA’s 19 labeling requirements. ECF No. 34 at 16-17. Defendant’s argument that it complied with 7 C.F.R. 20 205.305 appears to rely on Defendant’s contention that it identified the organically-produced 21 ingredients in the ingredient statement. Id. at 17. Defendant otherwise implicitly appears to argue 22 that its use of the term “organic” in the product’s tagline does not constitute a prohibited claim. Id. 23 It is unclear from the administrative record provided by the parties whether COPA was approved 24 in its entirety. And, given the court’s holdings as to the lack of preemptive effect of OFPA as to the 25 state claims at issue here, prudence dictates that the court not call into question the state and federal 26 governments’ apparently copacetic co-existence, particularly given the strong presumption against 27 preemption and the lack of comment from either the state or federal government. 28 The issue of Defendant’s purported compliance with OFPA’s labeling requirements is also C 11-03082 LB ORDER 15 1 unclear. The use of the term “organic” in the product’s tagline seems to violate OFPA’s labeling 2 requirements for multi-ingredient products with less than 70% organic composite ingredients. The 3 requirements only allow the use of the term in the ingredient panel (either by the actual organic 4 ingredient or in the ingredient statement with the specified percentage). To the extent that 5 Defendant’s compliance argument hinges on its view that cosmetics and personal care products are 6 effectively unregulated, the court already has rejected this argument. 7 C. Whether Any of Plaintiff’s Claims May Persist Even if the Court Adopted Defendant’s Plaintiff argues that her Unfair Competition Law, Consumer Legal Remedies Act, and express 10 warranty claims persist even if the court adopts Defendant’s view regarding the preemption issue, 11 ECF No. 32 at 26-27. Plaintiff argues that none of these claims – except her Unfair Competition 12 For the Northern District of California View on the Preemption Issue 9 UNITED STATES DISTRICT COURT 8 Law claim under the “unlawful” prong to the extent that it relies on a violation of COPA – are 13 completely dependent on whether Defendant’s products comply with COPA’s cosmetic labeling 14 requirements but, instead, are more fundamentally based on Defendant’s misrepresentation of the 15 products as “organic” when predominately they are not. Id. at 27. Plaintiff contends that, while 16 Defendant’s violations of COPA enhance these claims, Defendant’s misrepresentations that the 17 products are organic are actionable under the Competition Law, Consumer Legal Remedies Act and 18 express warranty law irrespective of COPA. Id. 19 Defendant counters that Plaintiff contended that she was defrauded or misled or that Defendant 20 breached an express warranty based on Plaintiff’s position that Defendant’s product was represented 21 to be, but was not, “organic” in compliance with COPA’s 70% compositional standard. ECF No. 34 22 at 17-18. Defendant notes that the complaint does not contain any other compositional standard. Id. 23 at 18. Defendant thus concludes that all of Plaintiff’s claims are preempted by OFPA. 24 At their core, as currently constructed, Plaintiff’s claims rely on the term “organic” having some 25 legally meaningful substance when used to market cosmetics or personal care products. As a 26 general matter, OFPA provides that definition. But, regardless of whether COPA and OFPA employ 27 different definitions, the court already has determined that OFPA does not preempt Plaintiff’s 28 claims. C 11-03082 LB ORDER 16 1 D. Whether the District Court Should Stay or Dismiss the Case Under the Primary 2 Jurisdiction Doctrine 3 While the court is unwilling to find that OFPA explicitly preempts the state consumer protection jurisdiction argument that needs to be addressed. At the hearing, Defendant explained its view that 6 Plaintiff should have filed an administrative complaint with the USDA. Then, if the USDA 7 determined that Defendant’s conduct violated the NOP, Plaintiff would be able to pursue her state 8 claims. On the other hand, if the USDA determined that Defendant’s conduct did not violate or was 9 not regulated by the NOP, Plaintiff would have to appeal the USDA’s decision under the APA 10 framework (and, presumably, the claims here would be subject to dismissal for failure to state a 11 claim barring a reversal of the USDA’s decision). After the initial hearing on the parties’ motion to 12 For the Northern District of California laws at issue here, the court also acknowledges that Defendant, in effect, raises a primary 5 UNITED STATES DISTRICT COURT 4 dismiss, the court granted Defendant’s request to submit supplemental briefing solely on the primary 13 jurisdiction issue.3 Order, ECF No. 47. 14 1. The Primary Jurisdiction Doctrine 15 “The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint 16 without prejudice pending the resolution of an issue within the special competence of an 17 administrative agency.” Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). Primary 18 jurisdiction is not “designed to ‘secure expert advice’ from agencies’ every time a court is presented 19 with an issue conceivably within the agency’s ambit.” Id. Instead, “it is to be used only if a claim 20 ‘requires resolution of an issue of first impression, or of a particularly complicated issue that 21 Congress has committed to a regulatory agency.’” Id. (quoting MCI WorldCom Network Servs., 277 22 F.3d 1166, 1172 (9th Cir. 2002)). 23 Courts in this circuit traditionally apply the primary jurisdiction doctrine “in cases where there 24 is: (1) a need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an 25 26 27 28 3 The court’s order limited the scope of the post-hearing briefing to discussions of “7 U.S.C. § 6520 and the application of the primary jurisdiction doctrine to this case.” Order, ECF No. 47 at 1-2. The court does not consider the parties’ post-hearing briefs to the extent they discuss additional topics. C 11-03082 LB ORDER 17 1 administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or 2 activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in 3 administration.” Clark, 523 F.3d at 1115 (alteration omitted); Syntek Semiconductor Co., Ltd. v. 4 Microchip Tech., Inc., 307 F.3d 775, 781 (9th Cir. 2002); United States v. Gen. Dynamics Corp., 5 828 F.2d at 1365. The Ninth Circuit also has explained that the doctrine “is designed to protect 6 agencies possessing ‘quasi-legislative power’ and that are ‘actively involved in the administration of 7 regulatory statutes.’” Clark, 523 F.3d at 1115 (quoting Gen. Dynamics, 828 F.2d at 1365). 8 2. The Parties’ Arguments 9 In its supplemental brief, Defendant contends that all of the traditional factors support staying or 49 at 2. Plaintiff counters that Defendant makes conflict preemption arguments that they attempt “to 12 For the Northern District of California dismissing Plaintiff’s claims under the primary jurisdiction doctrine. Def.’s Suppl. Brief, ECF No. 11 UNITED STATES DISTRICT COURT 10 shoehorn . . . into a primary jurisdiction framework by arguing that USDA must determine whether 13 to approve COPA’s allegedly conflicting requirements.” Pl.’s Suppl. Brief, ECF No. 51 at 2. 14 Plaintiff also argues that application of the primary jurisdiction doctrine would be inappropriate in 15 these circumstances. 16 17 a. Defendant’s “Federalizing” Argument Defendant argues that OFPA vests the USDA with primary jurisdiction over a “seamless federal 18 program” that broadly regulates labeling and compositional standards for cosmetic products that 19 contain organic agricultural ingredients. Def.’s Suppl. Brief, ECF No. 49 at 3. According to 20 Defendant, SOPs do not challenge the USDA’s primary jurisdiction in regulating under OFPA 21 because “a state’s ‘additional requirements’ become federal law and the organic rules the state 22 implements and enforces are always federal.” Id. at 3 (citing Final Rule at 80,617 (“If approved by 23 the Secretary, the more restrictive requirements will become the NOP regulations for organic 24 producers and handlers in the State or applicable geographical area of the State.”)). Defendant also 25 argues that under California law, any provision of COPA that is not identical to a federal organic 26 provision “yields to the federal one and is thus inoperative as a ‘state law’ provision.” Id. at 5 & n.9 27 (citing Cal. Food & Agric. Code §§ 46001, 46004.1(a); Cal. Health & Safety Code §§ 110811, 28 110815). Defendant claims, “there is no such thing as a ‘state’ organic law under this legal regime, C 11-03082 LB ORDER 18 1 2 but only federalized SOPs.” Id. Defendant claims that as a result, OFPA’s “federalizing” provisions foreclose parallel actions 3 under state law because “states only and always implement and enforce federal law under the 4 OFPA.” Id. at 5. But because federal law does not provide a private cause of action, Plaintiff must 5 exhaust her administrative remedies with the USDA and may challenge an adverse agency ruling 6 only under the deferential standards applicable to judicial review of agency actions. Id. at 4. 7 Plaintiff counters that Defendant’s “federalizing” argument is simply an attempt to evade 8 established case law that permits “private enforcement of state laws that parallel federal laws even 9 where the federal laws do not allow private enforcement.” Pl’s. Suppl. Brief, ECF No. 51 at 6 n.5. regulations and that the California’s Sherman Food, Drug, and Cosmetic Act contains the same 12 For the Northern District of California Plaintiff points out that there is nothing unique about the COPA provisions incorporating federal 11 UNITED STATES DISTRICT COURT 10 language as COPA. Id. 13 Defendant analogizes to Lanham Act cases, which it claims support application of the primary 14 jurisdiction doctrine here. Def.’s Suppl. Brief, ECF No. 49 at 5-6 (citing cases in which courts apply 15 identical reasoning to Lanham act and state unfair competition claims). Defendant states that federal 16 courts do not permit Lanham Act cases to proceed where evaluation of the claim would require 17 interpretation and enforcement of standards within an agency’s primary expertise. Id. at 6 18 (collecting cases). 19 Plaintiff counters that Defendant’s cases are distinguishable because those plaintiffs “sought to 20 privately enforce federal standards where the underlying federal law precludes private enforcement.” 21 Pl.’s Suppl. Brief, ECF No. 51 at 5. In contrast, Plaintiff argues that her claims do not encroach 22 upon USDA authority because they arise under state laws that include a private right of action. Id. 23 at 5-6. 24 b. Whether COPA Conflicts With the NOP 25 Defendant contends that Plaintiff’s claims arise under COPA provisions that conflict with the 26 NOP, and the USDA should be permitted to decide whether to approve them in the first instance. 27 Def.’s Suppl. Brief, ECF No. 49 at 7. Specifically, Defendant argues that the USDA should be 28 permitted to decide whether COPA’s 70% compositional requirement and the definition of “sold as C 11-03082 LB ORDER 19 1 2 organic” conflict with the NOP. Id. Plaintiff argues that the court need not consider the merits of Defendant’s conflict arguments. 3 Pl.’s Suppl. Brief, ECF No. 51 at 7-9. Specifically, Plaintiff argues that the USDA approved 4 California’s SOP as written, rendering further USDA consideration unnecessary. Pl.’s Suppl. Brief, 5 ECF No. 51 at 7. Plaintiff also argues that the USDA has subsequently reviewed California’s SOP 6 and required California to change its program, but has not objected to COPA’s cosmetic labeling 7 provisions. Id. 8 9 Plaintiff also argues that it is impossible for COPA to conflict with federal law because there is no federal law regulating organic cosmetics with which COPA can conflict. Id. at 7-8. Plaintiff contends that the NOP “by its own terms” does not extend to cosmetic products. Id. Plaintiff argues 11 that until the USDA issues regulations covering cosmetics, conflicts are logically impossible. Id. 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 Turning to the allegedly conflicting provisions, Defendant argues that COPA’s 70% 13 compositional requirement conflicts with the NOP, which expressly authorizes products that contain 14 less than 70% organic content, and that only the USDA can decide whether the COPA provision has 15 been approved as part of California’s SOP. Def.’s Suppl. Brief, ECF No. 49 at 7 (citing 7 C.F.R. § 16 205.309).4 Plaintiff counters that even if the NOP applied to cosmetics, COPA’s standards are 17 consistent with the NOP’s. Pl.’s Suppl. Brief, ECF No. 51 at 8-9 (comparing Cal. Health & Safety 18 Code § 110838 with 7 C.F.R. §§ 205.301(b) & (c), Cal. Health & Safety Code § 110839 with 7 19 C.F.R. § 205.305, and Cal. Health & Safety Code § 110838(b) with 7 C.F.R. § 205.302). Plaintiff 20 argues that COPA’s labeling requirements did not require USDA approval because they are not 21 more restrictive than the NOP. Id. at 9 n.11. 22 As to the “sold as organic” definition, Defendant acknowledges that the COPA definition only 23 applies if the term is not otherwise defined by the NOP. Def.’s Suppl. Brief, ECF No. 49 at 7 (citing 24 Cal. Health & Safety Code § 110815(k)). Still, Defendant asserts that the “sold as organic” 25 4 26 27 28 Defendant also argues that allowing a state claim for failure to comply with COPA’s provision would require that the court “write the existing federal authorization for multi-ingredient products with less than 70% organically produced ingredients out of the NOP (and thus out of California’s SOP), and notably, out of COPA as well.” Def.’s Suppl. Brief, ECF No. 49 at 7 (citing Cal. Health & Safety Code § 110839). The court is unable to understand Defendant’s argument. C 11-03082 LB ORDER 20 1 definition does not match the labeling requirements of OFPA and the NOP and argues that the court 2 should allow the USDA to decide “the question of whether COPA’s ‘sold as organic’ definition 3 should be approved.” Id. at 7-9. 4 Plaintiff disputes Defendant’s reading of the law and, even assuming that the NOP regulates 5 cosmetics, argues that COPA’s cosmetic labeling standards are consistent with the NOP. Pl.’s 6 Suppl. Brief, ECF No. 51 at 8 (citing Cal. Health & Safety Code § 110838 and 7 C.F.R. §§ 7 205.301(b) & (c)). Plaintiff argues that COPA and the NOP have identical compositional 8 requirements and that both permit products to contain less than 70% organic ingredients. Id. 9 Plaintiff argues that the method of calculating the percentage of organic ingredients also is identical. 10 c. Whether The Primary Jurisdiction Doctrine is Appropriate 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Id. at 7-8. Plaintiff argues that her claims are within the ordinary competence of the courts and discusses 13 several district court cases as examples. Id. at 3-5 (discussing Lockwood v. Conagra Foods, Inc., 14 597 F. Supp. 2d 1028, 1035 (N.D. Cal. 2009); Leonetti’s Frozen Foods, Inc. v. American Kitchen 15 Delights, Civ. No. 11-6736, 2012 WL 1138590, at *10-11 (E.D. Pa. April 4, 2012); All One God 16 Faith, Inc. v. The Hain Celestial Group, et al., No. C 09-03517 JF (HRL), 2011 WL 4433817, at *1 17 (N.D. Cal. Sept. 22, 2011)). Plaintiff argues that in Lockwood, the district court declined to stay the 18 proceedings under the primary jurisdiction doctrine in order to permit the FDA to define the term 19 “natural” where (1) the FDA had not defined the term despite repeated requests to do so, (2) the 20 court merely needed to decide whether a term was misleading, which did not require technical 21 expertise, and (3) the agency’s definition of the term would not completely resolve plaintiff’s state 22 law claims. Id. at 3-4. 23 Plaintiff also argues that her claims are similar to those in Leonetti’s Frozen Foods, Inc. v. 24 American Kitchen Delights, where the court held that the question of whether defendant’s packaging 25 was false or misleading within the meaning of the Lanham Act was within the ambit of the court. 26 2012 WL 1138590, at *10-11. 27 28 Plaintiff argues that the All One God Faith case is distinguishable from Plaintiff’s. Pl.’s Suppl. Brief, ECF No. 51 at 5 (discussing All One God Faith, Inc., 2011 WL 4433817, at *1). There, the C 11-03082 LB ORDER 21 1 district court applied the primary jurisdiction doctrine and referred the case to the USDA to 2 determine whether NOP standards applied to cosmetic products. Id. Plaintiff points out that All one 3 God Faith, Inc.’s claims arose under the Lanham Act and that the USDA was then considering a 4 proposal to extend the NOP to cosmetics. Id. Plaintiff argues that her claims are different because 5 they arise under state law and do not refer to OFPA or the NOP. Id. at 5-6. 6 Finally, Plaintiff argues that it would be inappropriate to apply the primary jurisdiction doctrine 7 to this case because the USDA does not provide any mechanism for referring claims to the USDA. 8 Id. at 6. And in any event, referral to the USDA would be inappropriate because USDA has 9 approved California’s SOP, which means that the California Department of Food and Agriculture is the agency charged with hearing challenges under the NOP. Id. (citing 7 C.F.R. §§ 205.680- 11 205.681). 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 Based on the record presented, the court declines to apply the primary jurisdiction doctrine. As 13 an initial matter, the court agrees that much of Defendant’s argument arises under the doctrine of 14 conflict preemption, rather than the primary jurisdiction doctrine. “Primary jurisdiction is not a 15 doctrine that implicates the subject matter jurisdiction of the federal courts.” Syntek Semiconductor 16 Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 780 (N.D. Cal. 2002). In contrast, conflict 17 preemption occurs “when either ‘compliance with both federal and state regulations is a physical 18 impossibility,’ or where ‘state law stands as an obstacle to the accomplishment and execution of the 19 full purposes and objectives of Congress.’” Chicanos Por La Causa, Inc. v. Napolitano, 558 F.3d 20 856, 863 (9th Cir. 2009) aff'd sub nom. Chamber of Commerce of U.S. v. Whiting, 131 S. Ct. 1968 21 (2011) (quoting Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001)). “For conflict 22 preemption to apply, the conflict must be an actual conflict, not merely a hypothetical or potential 23 conflict.” Id. 24 Defendant essentially argues that COPA stands as an obstacle to the accomplishment and 25 execution of Congress’s objectives for OFPA by permitting a private right of action. See Def.’s 26 Suppl. Brief, ECF No. 49 at 4 (claiming that Congress created a “seamless federal program that 27 reflects Congress’s considered judgment that ‘national standards’ are best set and enforced by the 28 expert agency”). Similarly, Defendant’s argument that “states only and always implement and C 11-03082 LB ORDER 22 1 enforce federal law under the OFPA” is just another way of saying that compliance with both federal 2 and state regulations is an impossibility. Def.’s Suppl. Brief, ECF No. 49 at 5. In both cases, 3 Defendant argues not that this court should defer to the USDA on prudential grounds, but that the 4 court lacks jurisdiction to decide Plaintiff’s claims. 5 The court does not accept Defendant’s “federalizing” argument. Defendant cites no authority for 6 the proposition that by incorporating approved SOP provisions into the NOP, the Final Rule renders 7 the state law provisions inoperative. See id. at 3-5. Nor is the court persuaded by Defendant’s novel 8 argument, particularly where the evidentiary record contains scant support for Congressional or 9 agency intent supporting Defendant’s theory. Instead, the court is persuaded by Plaintiff’s citation to Lockwood. There, the district court declined to apply the primary jurisdiction doctrine in very 11 similar circumstances. 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 The parties have not identified any specific questions that the court is compelled to refer to the 13 USDA (or the California Department of Food and Agriculture). As previously discussed, based on 14 the record presented, the court cannot conclude that the USDA has not approved COPA’s cosmetic 15 labeling provisions – particularly where the USDA has had ample opportunity to object to them in 16 its original approval and five-year review of COPA. The court does not perceive a potential conflict 17 between COPA and the NOP that is ripe for agency resolution. In other circumstances, the court 18 may have considered staying the case while the USDA decided definitively whether the NOP applies 19 to cosmetics. However, given the extended period of time that the USDA has been considering the 20 issue and given the fact that the All One God, Inc. v. The Hain Celestial Group case was stalled for 21 years awaiting an agency decision on that very question, the court doubts that staying this litigation 22 would serve any useful purpose. 23 Since promulgating the Final Rule in 2000, the USDA has struggled with the question of 24 whether the NOP regulates cosmetics. The USDA’s evolving approach to applying the NOP organic 25 food standards to cosmetic products is understandable given the often significant differences in 26 composition, processing, and formulation between the two product categories. These fluctuations 27 also portray an agency seeking direction from Congress in the face of vaguely drafted legislation. 28 Ultimately, the court finds the USDA’s longstanding uncertainty to be an insufficient basis for C 11-03082 LB ORDER 23 1 deferring to the agency. 2 3 V. CONCLUSION On its face, OFPA’s express preemption provision bars only a narrow set of state organic 4 certification requirements that are not at issue here. And as discussed, the court sees no real conflict 5 between the NOP and COPA compositional requirements. Nor can the court ignore that the state 6 and federal government have been co-existing for the past years. So either (contrary to the court’s 7 reading) the USDA reads OFPA’s restriction of “for human or livestock consumption” as limiting 8 the statute’s reach to agricultural products that are eaten or drunk or it has approved COPA’s 9 cosmetic labeling provisions. In either case, the court does not read OFPA, COPA, and the NOP as 10 For the foregoing reasons, the court DENIES Defendant’s motion to dismiss and declines to 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 jointly creating a regulatory vacuum that guts state consumer protection laws. refer the case to the USDA or the California Department of Food and Agriculture. In light of this 13 order, the court directs the parties to meet and confer about the current deadlines, see Orders, ECF 14 Nos. 18 and 57, and propose new dates. The court sets a case management conference for 15 September 13, 2012, at 10:30 a.m. 16 This disposes of ECF No. 27. 17 IT IS SO ORDERED. 18 Dated: August 1, 2012 _______________________________ LAUREL BEELER United States Magistrate Judge 19 20 21 22 23 24 25 26 27 28 C 11-03082 LB ORDER 24

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