California Ruling Opens Door to 'Organic Food Lawsuits

The California Supreme Court has opened a door to sue farmers under state law for making false claims that products are “organic." The unanimous ruling revives a proposed class-action lawsuit and could have far-reaching implications for the organic food industry.

“In reaching this decision, the California Supreme Court may have opened the floodgates for ‘organic’ claims, permitting anyone to stand in the shoes of a regulator to police (and demand payouts) for technical violations of this complex and developing area of law," Morrison & Foerster LLP, a global law firm, commented in a Dec. 8 client alert.

Michelle Quesada, a Los Angeles County resident, claimed she bought herbs under the belief they were 100 percent organic. She sued a large herb-growing operation, alleging false advertising and unfair competition because the herbs purportedly contained a combination of conventional and organic material.

Herb Thyme Farms operates one small farm where it grows organic herbs, but it also grows conventional crops on a number of large farms, according to plaintiff’s second amended complaint. The business has labeled as “organic" herbs that “contain all or some portion of conventionally grown fresh herbs," the lawsuit alleged.

The case was initially dismissed against Herb Thyme Farms, Inc. on the theory that the claims were preempted by the federal regime for certifying organic growers. On Dec. 3, the California Supreme Court unanimously revived the suit, reversing a lower appeals court that had affirmed the initial dismissal.

“We hold a state law claim that produce is being intentionally mislabeled as organic is not preempted," wrote Associate Justice Kathryn M. Werdegar at the beginning of the 30-page opinion. “When Congress entered the field in 1990, it confined the areas of state law expressly preempted to matters related to certifying production as organic, leaving untouched enforcement against abuse of the label ‘organic.’"

The six remaining judges concurred.

“The California Supreme Court in its unanimous decision got it right," said Paul Kiesel of Beverly Hills, California-based Kiesel Law LLP, one of the law firms that is representing the proposed class of consumers. “For California, labels matter."

Indeed, as part of its rationale rejecting the preemption arguments, the state supreme court noted the long history of the states beginning in 1785—and California in particular dating back to the 1860s—in regulating food labels.

“Given this longstanding state oversight, the federal government has assumed a more peripheral role and routinely left undisturbed local policy judgments about how to best protect consumers," Werdegar wrote.

At issue in the appeal: whether the Organic Foods Production Act (OFPA) of 1990—and the federal regime in carrying out the law’s directive of establishing national standards for the labeling, production and sale of organic products—prevented Quesada from asserting claims under state law.

Federal law, Herb Thyme Farms argued, granted the U.S. Department of Agriculture exclusive authority to regulate the labeling and marketing of organic products, preempting the state-law claims. But the California Supreme Court held such state-law claims further, rather than undermine, the federal statute.

“The purposes and objectives underlying the Organic Foods Act," Werdegar wrote, “do not suggest such suits are an obstacle; to the contrary, a core reason for the act was to create a clear standard for what production methods qualify as organic so that fraud could be more effectively stamped out and consumer confidence and fair market conditions promoted."

Mark Kemple, a Los Angeles-based litigator with Greenberg Traurig LLP who represented Herb Thyme Farms, did not immediately respond Wednesday to a request for comment.

The Organic Trade Association, a membership-based business association for organic agriculture and products in North America, disagreed with the California Supreme Court's ruling.

"The Organic Trade Association is very concerned about the precedent this ruling could create, since it misunderstands the extent of the Organic Food Production Act’s preemption over state laws by allowing consumer complaints outside of the enforcement process established by the OFPA and its regulations," the association said in an emailed statement. "There is a clear enforcement process at the U.S. Department of Agriculture that must be the first step in verifying and enforcing organic claims. We are hopeful that other state courts will not similarly misunderstand the clear congressional language and intent.”

Quesada’s lawsuit has been sent back to the Los Angeles Superior Court where the plaintiff’s lawyers must still prove their case and convince a judge to certify the class.

The California Supreme Court’s decision is a “victory for consumers who can rely on representations made on labels," Kiesel told Natural Products INSIDER, “but it’s also a victory for organic farmers who go through time and effort of producing organic goods and don’t have to compete with farms that are mixing organic and inorganic products, making the organic farms more competitive."

Morrison & Foerster attorneys who defend class-action lawsuits said the decision has far-reaching consequences.

“By greenlighting Plaintiff’s action, Quesada opens the door to private enforcement of technical federal and state organic regulations," the lawyers wrote in the client alert. “‘Organic’ may become the new ‘GMO’: any contamination—no matter how small—will draw litigation."

But the ruling marked a victory for California authorities. In the appeal, the office of California Attorney General Kamala Harris had appeared as amicus curiae on behalf of the plaintiff.

Through OFPA and the federally approved authorization of state organic programs, Congress intended to “create a nationally consistent set of farming and food processing practices that define what is ‘organic,’ expressly preempting and replacing the existing patchwork of state organic certification laws," Kamala’s office wrote in a Dec. 11, 2014 amicus brief before the state supreme court. “There is no indication, however, that Congress also intended to usurp the States’ longstanding police power to prevent deception in food sales, leaving no recourse for consumers who are misled by advertising … a product as ‘organic’ when it is not in fact organic under the federal law and its state counterpart."