Well, not exactly.
In reading and actually thinking about yesterday’s Farm Raised Salmon decision (now published at 42 Cal. 4th 1077; 175 P.3d 1170) from the California Supreme Court, the operative four-letter word is “food.”
“Food” is what puts the “F” in the FDCA – not federal – and that seems to be the number one lesson to take away from Farm Fresh Salmon. It’s all about food.
And here we have to be careful. Neither of us are “F”s. – we’re “D”s. That is, we defend drug (and medical device) companies, not food companies. But we both work in great big firms with great big offices from Austin, Texas to Tokyo, Japan and just about everywhere in between. Somewhere out there, unbeknownst to us, one (or more) of our partners might just represent food companies.
We don’t want to make things worse for them than they already are.
So we don’t want to be out here saying dumb things about a specialized area of the law that we don’t know much about.
Not that that’s ever stopped us before – but it does give us pause.
So, with the caveat that we’re being more dilettantish (is that even a word?) than usual, here goes.
The best way to appreciate what Farm Raised Salmon does, and doesn’t, do to defense preemption arguments is to compare its result and reasoning to an FDCA preemption case that, surprisingly, the California Supreme Court didn’t cite at all – Dowhal v. SmithKline Beecham Consumer Healthcare, 88 P.3d 1 (Cal. 2004). We’ve never really discussed Dowhal before, but comparatively, the defense position in Dowhal had everything going for it that was lacking in Farm Raised Salmon.
- First, and most importantly, Dowhal involved a prescription drug (the product our clients make), rather than food. That gets critically important, given the food-specific rationale in Farm Raised Salmon – which we’ll examine in a moment, so be patient.
- Second, Dowhal was a true conflict preemption case – plaintiffs claimed that a California ballot initiative required birth defect warnings on certain prescription drugs (smoking cessation patches) despite the FDA nixing those same warnings because the Agency considered maternal smoking to be the more serious risk to developing babies. Farm Raised Salmon – at least the way the court chose to view it – involved “identical” state law claims. The preemption argument the defendants made in Farm Raised Salmon, while not denominated as “field” preemption, at least approached it. Slip op. at 7-8.
- Third, the preemption motion in Dowhal was made on summary judgment. Thus there was full factual development of the claimed conflict between federal and state law. In Farm Raised Salmon, preemption was asserted on a “demurrer” – a motion to dismiss where the only issue is the legal adequacy of the plaintiff’s complaint. Slip op. at 4-5. On that limited record, there was no way to challenge plaintiffs’ assertion that their claims were “identical,” and no opportunity to demonstrate that their state-law claims, rather than paralleling federal standards, in fact departed from them. The worst defense defeats on preemption (think Lohr) have occurred on this sort of limited factual record.
- Fourth, in Dowhal, the defendants had the FDA on their side. As we mentioned before, the Agency filed an amicus brief in Dowhal supporting preemption. In Farm Raised Salmon, the only amici opposed preemption – including a pivotal brief filed by the California state AG (more on that later). We’re not privy to what went on here, but any time a state supreme court gets a preemption issue, it’s a big deal. Lots of defense oriented organizations file amicus briefs. Discouraging amicus filings isn’t going to keep a court (especially a supreme court) from realizing the significance of a case before it.
In Dowhal, the same California Supreme Court that decided Farm Raised Salmon held that claims against drug manufacturers were impliedly preempted – even though Congress had inserted an express savings clause in the FDCA specifically to preserve state-law claims under this particular California proposition:
The language of the Modernization Act’s savings clause does not express an intention to preclude all conflict preemption. . . . In light of that language, history, and the principles established by Geier. . ., we conclude that the savings clause does not entirely exclude conflict preemption.
88 P.3d at 9 (various citations omitted) (emphasis added). The FDA’s position that applying the California proposition would conflict with its own balancing of public health objectives was critical to preemption in Dowhal:
The FDA’s ruling, however, reflects the concern that Proposition 65 warnings on product labels might lead pregnant women to believe that NRT products were as dangerous as smoking, or nearly so, and thus discourage the women from stopping smoking. . . . Conflict preemption does not require a direct contradiction between state and federal law; the state law is preempted if state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. We conclude that the FDA’s August 17, 2001, letter established a federal policy prohibiting defendants from giving consumers any warning other than the one approved by the FDA in that letter, and that the use of a Proposition 65 warning would conflict with that policy.
88 P.3d at 11 (emphasis added).
So what happened here? How did a good court go bad? OK, let’s examine in more detail how the same court that didn’t let an express savings clause deter it from finding implied preemption in a drug case in Dowhal unanimously rejected implied preemption in the Farm Fresh Salmon food case.
Farm Fresh Salmon involved consumer protection and related claims – including claims based upon California’s “little FDCA Act” (called the Sherman Act). Slip op. at 3. Thus right off the bat, the defendants here were at a disadvantage compared to Dowhal. Defendants were up against claims that at least purported to parallel the provisions of the FDCA. They were fighting the same sort of violation claims that we recently discussed, here. In particular, these plaintiffs argued that the FDCA and the FDA’s food regulations requited disclosure of color additives and that the salmon packer defendants violated these disclosure requirements. Slip op. at 3, 5.
Did they? Because preemption was decided on a demurrer standard, we don’t know and we don’t care. The plaintiff’s factual allegation controlled, and the atmospherics couldn’t help the defendants’ position. The court had to assume that they were bad guys.
For the reasons we discussed at excessive length in that post, violation claims are the most difficult claims to win on preemption – especially on a conflict preemption rationale – because plaintiffs can portray the substance of their claims as identical, and thus not in conflict with, federal law. That’s exactly what happened here.
The Farm Raised Salmon defendants relied upon one of our favorite FDCA provisions, 21 U.S.C. §337(a). Slip op. at 3-4. That’s the part of the Act that provides, with respect to violations, “all such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States.”
Now, there are two ways that defendants can use §337(a) – one involving preemption, and the other involving the state-law prerequisites to bringing violation (“negligence per se”) claims. Most of our recent post on violation claims was devoted to explaining how defendants can use this statutory provision to support the non-preemption argument – that under state law, courts do not recognize private statutory violation claims where the legislature, when enacting the underlying statute, indicated its intent (with language like §337(a)) that the statute not be privately enforced. It’s a less peremptory argument than preemption, appealing to comity rather than asserting supremacy.
Conversely, preemption argument based upon §337(a) is really powerful – perhaps the most sweeping available to defendants under the FDCA. When it wins, its great. Courts say things like the Supreme Court did in Buckman: This section “leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions” and is “clear evidence that Congress intended that the [statute] be enforced exclusively by the Federal Government.” Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 349 n.4, 352 (2001). Win this argument, and the cases go away.
We’re convinced that this preemption argument is manifestly correct on the law, but it’s like going nuclear. Precisely because of the implications of §337(a) preemption – it essentially ousts all private litigation – courts hesitate to adopt it. That wasn’t much of a problem in Buckman, since the conflicts arising from fraud on the FDA claims are immediate and palpable, but even there, the pending Warner-Lambert v. Kent case shows how reluctant courts can be to admit that §337(a) means what it says (in Farm Raised Salmon, the pending Warner-Lambert v. Kent case also says something else – “appeal” – since there may be a GVR in your future).
To be fair to the defendants in Farm Raised Salmon, it doesn’t appear that they had much of a choice in which §337(a) argument to assert. Although it’s only mentioned in passing in the opinion, slip op. at 21 (“something that state law indisputably allows”), California courts – improvidently, in our opinion – appear to have already rejected comity. Rather, we’re willing to bet that at least one of the two cases cited on page 21 holds as a general proposition that the state’s consumer fraud statutes incorporate claims, based on other statutes, even if the legislature didn’t intend to allow private enforcement when it enacted those other statutes.
We think that’s a bad idea, but it doesn’t raise a preemption issue until a federal statute gets involved. It’s probably because we’re just inherently conservative defense lawyers, but we think that courts should respect legislative (and especially Congressional) decisions to say “no,” and should not subvert the no-private-enforcement decisions of co-equal branches of government through “incorporation” – either into the common law or through other more general statutes.
But California does what California does. What it’s wound up with, with respect to food violation claims, is rather Rube Goldbergian (we know that’s not a word): (1) the FDCA allows state “little FDCA statutes” that incorporate identical food rules, but doesn’t otherwise authorize state-law (much less, private) enforcement; (2) California enacted a little FDCA statute, the Sherman Act, but that didn’t allow private enforcement either, (3) later, California enacted consumer protection statutes that did allow private enforcement, but did not specifically address food, so (4) California courts decided to incorporate globally into the consumer protection statutes any number of other statutes (such as the Sherman Act on food) that did not themselves contemplate private enforcement.
Double play, Tinker to Evers to Chance.
But for our clients, the most important thing is that this whole rather jerry-rigged edifice probably would have still have fallen before §337(a) – were it not for a food-specific preemption provision that was added to the FDCA as part of the 1990 Nutrition Labeling Act. That section provides that “no State. . .may directly or indirectly establish under any authority or continue in effect as to any food. . .any requirement for the labeling of food. . .that is not identical to the [federal] requirement.” 21 U.S.C. (we’re assuming) §343-1(a).
The ruling against preemption in Farm Raised Salmon is entirely and exclusively based on the “negative implication” of §343-1(a) – that states may enforce “identical” requirements” with respect to “food” pursuant to the Nutrition Act amendments to the FDCA. Slip op. at 5-7. While that’s really bad for the food industry, for us working the “D” rather than the “F”, Farm Raised Salmon is at worst just the source of some unfortunate dicta. Indeed, we have no trouble finding a silver lining on that dark cloud: the court’s extensive reliance upon §343-1(a) is back-handed compliment to the preemptive effect of §337(a) in situations, such as prescription drugs, where Congress has not enacted anything that detracts from or contradicts its original decision to prohibit private enforcement.
Here’s what the Farm Raised Salmon court said specifically about §343-1(a) and its effect on §337(a) preemption:
- “However plausible the Court of Appeal’s reasoning may appear when §337(a) is considered in isolation, its reasoning is seriously undermined when §343-1 is taken into account.” Slip op. at 11.
- “§343-1 clearly and unmistakably evince[s] Congress’s intent to authorize states to establish laws that are “identical to” federal law.” Slip op. at 12.
- “[T]he state requirements at issue here are explicitly permitted by section 343-1.” Slip op. at 13.
- §343-1(a) “recognizes the importance of the State role: by allowing States to adopt standards that are identical to the Federal standard, which may be enforced in State court; by allowing the States to enforce the Federal standard in Federal court.” Slip op. at 13 (this is a quote from legislative history).
- “Congress made clear that the preemptive scope of §343-1 was to sweep no further than the plain language of the statute itself.” Slip op. at 15.
- §343-1(a) “evidences an intent to allow state and federal regulation to co-exist.” Slip op. at 15.
- §343-1(a)’s “language is significant because it informs our analysis of the existence of any implied preemption.” Slip op. at 16.
Here, we have to take issue with the court’s analysis, because both Buckman and Geier v. American Honda Motor Co., 529 U.S. 861 (2000), hold that implied preemption exists independently of express preemption, and the court is citing express statutory preemption language to limit an implied preemption argument. On the other hand, the Farm Raised Salmon court’s description indicates (slip op. at 16) that §343-1 is much, much more detailed, than the broad, vague preemption or savings clauses at issue in the Supreme Court cases.
- “[I]t is undisputed that §337 bars private enforcement of the FDCA – no one contends §343-1 alters that conclusion. However, plaintiffs do not seek to enforce the FDCA. Their action is based on the violation of state law – albeit state law that is, in compliance with §343-1, identical to FDCA provisions. Concluding that §343-1 permits private claims based on state law does not affect §337’s preemption of efforts to enforce the FDCA.” Slip op. at 18.
- §343-1(a) is similar to the preemption clause that did not preempt violation claims in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996). Slip op. at 18-19.
- §343-1(a) is similar to the preemption clause that did not preempt violation claims in Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005). Slip op. at 19-20.
- That “the Sherman Law imposes obligations identical to those imposed by the FDCA, as it must under §343-1, does not substantively transform plaintiffs’ action into one seeking to enforce federal law” in violation of §337(a). Slip op. at 21.
A brief aside – if you’ve ever wondered about the value of having a good amicus in your corner, just read footnote 11. Apparently, the winning §343-1(a) argument wasn’t even made by the plaintiffs themselves, but rather was introduced into the case by the California AG’s amicus brief. Given the sheer number of cites to §343-1(a) and the number of ways that the court relies on it, this section is plainly the linchpin of the court’s avoidance of preemption under §337(a). §343-1(a) allowed the state to enforce “food” regulations “identical” to the FDA’s. Through the Sherman Act, California effectuated that grant of coordinate enforcement power. California’s consumer protection statutes then allow private suits based on the Sherman Act. Finally, §337(a) only applies to private enforcement of the FDCA itself, not to private enforcement of independently authorized state-law claims, i.e., those permitted by §343-1(a) – and, in turn, authorized by the Sherman and consumer protection acts. Slip op. at 21-22.In effect, what Farm Raised Salmon did was find that §343-1(a), combined with California’s state-law decision to allow indirect private enforcement state statutes, created an exception to §337(a) for the sort of “identical” claims that §343-1(a) authorized. See slip op. at 23 (distinguishing certain cases because “none involve state laws explicitly authorized by §343-1 or a similar statute”), at 26 (“We accordingly hold that §337 does not impliedly preempt private actions based on violations of state laws explicitly authorized by §343-1”). We can’t agree with all of the reasoning in Farm Raised Salmon. We especially question the court’s flat assertion that §337(a) isn’t effective to prevent state-law end runs around its prohibition against private enforcement – that “[w]hat §337 does not do is limit, prohibit, or affect private claims predicated on state laws.” Slip op. at 21. To us that’s counter to the bedrock principle of the supremacy of federal law. Where federal law forbids private enforcement, “obstacle” preemption would preclude state-law subterfuges that would create, under another name, precisely what federal law prohibited. But the rub is that, arguably anyway, these claims aren’t prohibited by federal law, where “food” is concerned. §343-1 (and the ubiquitous presumption against preemption) saw to that. Still, the California Supreme Court makes clear time after time that these particular state law claims owe their very existence to the limited “food” exception created by §343-1(a). As long as that’s the case, we don’t think that Farm Raised Salmon, or any loose language in it, should have much spillover effect into prescription drug or device litigation, where the Buckman rule applies with full force – not that plaintiffs won’t try, of course. We’ll even go one step further. Farm Raised Salmon is based upon a “negative implication.” Slip op. at 7. As defense lawyers, we take away our own negative implication from the court’s repeated reliance upon §343-1(a) in virtually every step of its reasoning. That negative implication is that, where no such statutory exception exists – as is the case with the products we defend – Farm Raised Salmon only reinforces our view that §337(a) continues to “leave no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance.” Buckman, supra. Even less does Farm Raised Salmon implicate in any way the finding of implied preemption in Dowhal, where (as is usually the case in prescription drug litigation) the claim that the plaintiff is pushing is in substantive conflict with federal law.