By ELIZABETH WARMERDAM
(CN) – California consumers can sue growers under state law if they believe a food product is incorrectly labeled as organic, the California Supreme Court ruled.
The unanimous decision announced Thursday overturns an appellate court’s ruling that the federal Organic Foods Production Act of 1990 preempts such lawsuits.
At issue were allegations in a class action accusing Herb Thyme Farms – one of the nation’s largest herb producers with multiple farms throughout California – of selling conventionally grown herbs as organic.
Most of the company’s farms grow herbs conventionally, but one of the farms is certified as organic. Lead plaintiff Michelle Quesada says that Herb Thyme mixes its non-organic and organic herbs together and then falsely labels the product as 100 percent organic and charges a premium for them.
Quesada filed the complaint under California’s Consumers Legal Remedies Act, unfair competition law and false advertising statutes.
Herb Thyme argued that such claims could not be brought in state court because they are preempted under the 1990 federal organics law, which established national baseline standards for the production, labeling and sale of organic products.
The 2nd District Court of Appeal ruled in favor of the farm in 2013, finding that state lawsuits over labeling foods as organic would interfere with Congress’s purpose of establishing uniform national standards for organic production and labeling.
But in a 7-0 ruling, the state Supreme Court found that the federal preemption is limited to issues of production and organic certification, not deception.
Nothing in the provisions of the Organic Foods Act governing sanctions for misuse of the organic label indicates federal exclusivity, Justice Kathryn Werdegar wrote for the court.
“As a matter of express preemption, we have no reason to conclude Congress intended its federal remedies as not only a floor – ensuring that, whatever else state law might provide for, some teeth would back up the new federal regulations of organic labeling – but also as a ceiling, with states prohibited from continuing to augment these limited remedies,” Werdegar said.
Furthermore, far from posing an obstacle to the federal law, state claims such as those put forth by Quesada “affirmatively further the purposes of the Act,” the court said.
Intentionally marketing conventionally grown products as organic undermines the assurances the USDA Organic label is intended to provide, according to the court.
“Conversely, the prosecution of such fraud, whether by public prosecutors where resources and state law permit, or through civil suits by individuals or groups of consumers, can only serve to deter mislabeling and enhance consumer confidence,” Werdegar said.
Furthermore, deterring growers from dishonestly cashing in on premium prices when they are not actually producing organic foods benefits the producers who are playing by the rules in processing and marketing their products, the judge said.
“Private claim like those here are thus consistent with the Organic Food Act’s goals of reassuring consumers and enabling fair competition,” Werdegar said.
Because the Organic Foods Act does not contain a private right of action, implied preemption would render organic labeling uniquely immune from suits for deception, the court said.
“The Organic Foods Act cannot be interpreted, under the guise of obstacle preemption, as shielding from suit the precise misconduct Congress sought to eradicate,” Werdegar said.
Raymond Boucher, an attorney for Quesada, told Courthouse News that the ruling was a major victory and has positive implications for consumers and for the companies that are doing things the right way and following the law.
“It’s going to have important impacts around the country. Other states can now feel confident that private individuals can hold companies that violate the law accountable,” Boucher said. “I think it’s an important decision for consumers, but also important for the industry because it will help the industry police itself and provide an incentive for companies to properly label, produce and sell organic products. For those that don’t, it will provide a vehicle to hold them accountable and responsible.”
The ruling reinstates Quesada’s lawsuit, which seeks to represent potentially thousands of consumers who were allegedly misled by Herb Thyme into paying premium prices for non-organic products.
Boucher said they will now be able to move forward and “establish the facts that show Herb Thyme clearly was violating the labeling law and was selling conventional herbs as organic when they were not.”
Attorneys for Herb Thyme did not immediately respond to a request for comment sent by email Friday morning.
Categories: Consumer Products