Farm Raised Salmon Cases (42 Cal. 4th 1077, 2008)

Opinion

MORENO, J.

Plaintiffs filed a class and representative action alleging that various grocery stores violated state law by selling artificially colored farmed salmon without disclosing to their customers the use of color additives. Defendants successfully demurred in the trial court, arguing the action was preempted by section 337(a) of title 21 of the United States Code, a provision of the Federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. § 301 et seq.). The Court of Appeal affirmed the resulting judgment of dismissal.

We granted review to decide whether plaintiffs’ action was preempted by the FDCA. We conclude that section 337(a) does not preempt the action as plaintiffs do not seek to “enforce[], or to restrain violations” of, the FDCA. (§ 337(a).) Rather, plaintiffs’ claims for deceptive marketing of food products are predicated on state laws establishing independent state disclosure requirements “identical to” the disclosure requirements imposed by the FDCA, something Congress explicitly approved in section 343-1. (§ 343-1(a)(3).) Accordingly, we reverse the Court of Appeal’s judgment and remand the matter to that court for further proceedings consistent with our opinion.

I. BACKGROUND

A. Facts and Procedural History

Various individuals initiated separate actions against defendants alleging the grocery stores sold artificially colored farmed salmon without disclosing to consumers the use of color additives. The separate actions were coordinated in Judicial Council Coordination Proceeding No. 4329.

In March 2004, plaintiffs filed a coordinated complaint alleging as a class and representative action that fish farmers feed farm-raised salmon the chemicals astaxanthin and canthaxanthin to obtain a color of flesh resembling that of wild salmon. Plaintiffs allege the flesh of farm-raised salmon appears grayish without the chemical additives and that consumers believe the color of salmon is an indication of its origin, quality, freshness, flavor, and other characteristics. Plaintiffs allege that concerns have been raised about the potential health risks of consuming the artificial coloring agents in particular and farm-raised salmon in general. They further allege that parallel federal and state laws require food labeling to state that farmed salmon is artificially colored and defendants failed to comply with those requirements. Plaintiffs also allege the failure to disclose the use of artificial coloring has caused consumers to believe farmed salmon is wild salmon.

The complaint asserts four state law causes of action: (1) violation of the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.); (2) unfair or deceptive trade practices under the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.); (3) violation of the false advertising law (Bus. & Prof. Code, § 17500 et seq.); and (4) negligent misrepresentation. The laws alleged to be violated as a predicate for the “unlawful” prong of plaintiffs’ UCL claim (Bus. & Prof. Code, § 17200) include provisions of the state Sherman Food, Drug, and Cosmetic Law (Health & Saf. Code, § 109875 et seq.) (Sherman Law).

Defendants jointly demurred on several grounds, including that (1) section 337(a) preempts plaintiffs’ state law claims; (2) further consideration of the complaint could conflict with regulation and enforcement by the United States Food and Drug Administration (FDA) or California’s former Department of Health Services (DHS), so the action should be dismissed under the primary jurisdiction doctrine; and (3) plaintiffs failed to allege affirmative representation as required in order to state a cause of action under several provisions of the CLRA. Defendants also moved to strike portions of the complaint.

The trial court sustained the demurrer as to each count, with leave to amend. The court held that section 337(a) preempts plaintiffs’ state law claims, that the dispute should be referred to the FDA or the DHS under the primary jurisdiction doctrine, and that plaintiffs failed to state a claim for violation of the CLRA because they failed to allege the necessary affirmative representation. Plaintiffs elected not to amend their complaint and instead challenged on appeal the sustaining of the demurrer.

The Court of Appeal affirmed the trial court’s finding of preemption, holding that section 337(a) precludes private enforcement of the FDCA, that plaintiffs’ state law claims are predicated on a violation of the FDCA, and, therefore, that section 337(a) impliedly preempts plaintiffs’ state law claims. In light of its holding, the Court of Appeal did not reach or discuss the other grounds asserted by defendants in support of their demurrer. We granted plaintiffs’ petition for review.

B. Relevant Federal and State Laws

1. The FDCA Requires Disclosure of the Use of Color Additives

The FDCA prohibits the misbranding of any food. (§ 331(b).) A food “shall be deemed to be misbranded” under the FDCA if “its labeling is false or misleading in any particular . . . .” (§ 343(a).) More important to this case, a food is also deemed misbranded if “it bears or contains any . . . artificial coloring . . . unless it bears labeling stating that fact . . . .” (§ 343(k).)

FDA regulations permit the use of the chemical substances astaxanthin and canthaxanthin in “the feed of salmonid fish” as color additives “to enhance the pink to orange-red color of the flesh of salmonid fish.” (21 C.F.R. §§ 73.35(c) [astaxanthin], 73.75(c)(3) [canthaxanthin] (2007).) If used, however, the chemicals’ presence must be declared as prescribed by the FDA (id., §§ 73.35(d)(3), 73.75(d)(4)). Use of a color additive must be declared through the use of the phrases “ ‘Artificial Color,’ ‘Artificial Color Added,’ or ‘Color Added’ (or by an equally informative term that makes clear that a color additive has been used in the food).” (Id., § 101.22(k)(2) (2007).) Alternatively, disclosing the actual color additive used satisfies FDA regulations. (Ibid.) The disclosure that a color additive has been used “shall be placed on the food or on its container or wrapper, or on any two or all three of these, as may be necessary to render such statement likely to be read by the ordinary person under customary conditions of purchase and use of such food.” (Id., § 101.22(c).)

2. The FDCA Permits States to Establish Identical Requirements

Congress amended the FDCA with the Nutrition Labeling and Education Act of 1990 (NLEA). (Pub.L. No. 101-535 (Nov. 8, 1990) 104 Stat. 2353.) The purpose of the NLEA was to create uniform national standards regarding the labeling of food and to prevent states from adopting inconsistent requirements with respect to the labeling of nutrients. (Remarks of Rep. Waxman, 136 Cong. Rec. 5840 (daily ed. July 30, 1990) [debate on H.R. No. 3562, 101st Cong., 2d Sess.].) To that end, the NLEA included an explicit preemption provision in the form of section 343-l(a) (Pub.L. No. 101-535, § 6 (Nov. 8, 1990) 104 Stat. 2362-2364), which provides that “no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce— [][]... [f] (3) any requirement for the labeling of food of the type required by section . . . 343(k) of this title that is not identical to the requirement of such section . . . .” (§ 343-1(a), italics added.)

Although section 343-1 speaks in terms of what states may not do, by negative implication, section 343-1 also expresses what states may do, i.e., states may establish their own requirements pertaining to the labeling of artificially colored food so long as their requirements are identical to those contained in the FDCA in section 343(k). (60 Fed.Reg. 57120 (Nov. 13, 1995) [under FDA regulations, “if the State requirement is identical to Federal law, there is no issue of preemption . . .”]; Consumer Justice Center v. Olympian Labs, Inc. (2002) 99 Cal.App.4th 1056, 1065 [121 Cal.Rptr.2d 749] (Consumer Justice) [“[s]tates can enforce labeling rules which are identical .. .” (original italics)]; cf. Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 495 [135 L.Ed.2d 700, 116 S.Ct. 2240] (Medtronic) [reaching same conclusion regarding similar FDCA preemption provision in § 360k].)

3. The Sherman Law Imposes Requirements “Identical to”

Those Contained in Section 343(h)

Like the FDCA, the Sherman Law broadly prohibits the misbranding of food. (Health & Saf. Code, § 110765.) Among various examples of what constitutes misbranded food (e.g., id., § 110660 et seq.), the Sherman Law uses language “identical to” section 343(k) to provide that food is misbranded “if it bears or contains any . . . artificial coloring . . . unless its labeling states that fact.” (Health & Saf. Code, § 110740.) The Sherman Law provides that disclosing the addition of “color” will suffice (id., § 110725, subd. (a)) and requires that any disclosure be “prominently placed . . . and in terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use.” (Id., § 110705.)

Additionally, the Sherman Law incorporates “[a]ll food labeling regulations and any amendments to those regulations adopted pursuant to the [FDCA]” as “the food labeling regulations of this state.” (Health & Saf. Code, § 110100, subd. (a).) Thus, California has adopted as its own the FDA regulations regarding the use of (and disclosure of the use of) astaxanthin and canthaxanthin in the feeding of farmed salmon (see 21 C.F.R. §§ 73.35, 73.75 (2007)).

4. Section 337 Specifies Who Has Standing to Enforce the FDCA

Originally enacted in 1938, section 337 is a standing provision, providing that “[a]ll such proceedings for the enforcement, or to restrain violations, of [the FDCA] shall be by and in the name of the United States. . . ” (Act of June 25, 1938, ch. 675, § 307, 52 Stat. 1046, italics added.) Section 337 precludes private enforcement of the FDCA (§ 337(a); Buckman Co. v. Plaintiffs’ Legal Comm. (2001) 531 U.S. 341, 349, fn. 4, 352 [148 L.Ed.2d 854, 121 S.Ct. 1012] (Buckman)) and limits the circumstances under which states may seek to enforce the FDCA in federal court (§ 337(b)). Whether or not section 337 also precludes private claims predicated on state law is the crux of the present litigation and will be discussed at greater length below.

C. Principles of Preemption

As we have previously explained, “[t]he basic rules of preemption are not in dispute: Under the supremacy clause of the United States Constitution (art. VI, cl. 2), Congress has the power to preempt state law concerning matters that lie within the authority of Congress. [Citation.] In determining whether federal law preempts state law, a court’s task is to discern congressional intent. [Citation.] Congress’s express intent in this regard will be found when Congress explicitly states that it is preempting state authority. [Citation.] Congress’s implied intent to preempt is found (i) when it is clear that Congress intended, by comprehensive legislation, to occupy the entire field of regulation, leaving no room for the states to supplement federal law [citation]; (ii) when compliance with both federal and state regulations is an impossibility [citation]; or (iii) when state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ [Citations.]” (Bronco Wine Co. v. Jolly (2004) 33 Cal.4th 943, 955 [17 Cal.Rptr.3d 180, 95 P.3d 422] (Bronco Wine); see Viva! Internat. Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41 Cal.4th 929, 935-936 [63 Cal.Rptr.3d 50, 162 R3d 569] (Viva! International).) It is well established that the party who asserts that a state law is preempted bears the burden of so demonstrating. (Viva! International, supra, 41 Cal.4th at p. 936; Bronco Wine, supra, 33 Cal.4th at p. 956.)

The interpretation of the federal law at issue here is further informed by a strong presumption against preemption. (See Medtronic, supra, 518 U.S. at p. 485; see also Viva! International, supra, 41 Cal.4th at p. 938; Bronco Wine, supra, 33 Cal.4th at p. 974.) “[B]ecause the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action. In all pre-emption cases, and particularly in those in which Congress has ‘legislated ... in a field which the States have traditionally occupied,’ [citation], we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’ [Citations.]” (Medtronic, supra, 518 U.S. at p. 485; see Bates v. Dow Agrosciences LLC (2005) 544 U.S. 431, 449 [161 L.Ed.2d 687, 125 S.Ct. 1788] (Bates); Big Creek Lumber Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1150, fn. 7 [45 Cal.Rptr.3d 21, 136 P.3d 821].) We apply this presumption to the existence as well as the scope of preemption. (Medtronic, supra, 518 U.S. at p. 485.)

There can be no doubt that the presumption applies with particular force here. (See Bronco Wine, supra, 33 Cal.4th at p. 974.) As the Court of Appeal acknowledged here, “[c]onsumer protection laws such as the [UCL], false advertising law, and CLRA, are within the states’ historic police powers and therefore are subject to the presumption against preemption.” Laws regulating the proper marketing of food, including the prevention of deceptive sales practices, are likewise within states’ historic police powers. (Florida Avocado Growers v. Paul (1963) 373 U.S. 132, 144 [10 L.Ed.2d 248, 83 S.Ct. 1210]; Bronco Wine, supra, 33 Cal.4th at pp. 959-961 [describing history of state regulation].) Indeed, as early as the 1860’s, California was enacting laws regulating food marketing. (See, e.g., Stats. 1862, ch. 365, pp. 484-485 [prohibiting sale of adulterated and misbranded food]; Bronco Wine, supra, 33 Cal.4th at pp. 961-963.)

It is with these principles in mind that we consider whether it was the “ ‘clear and manifest purpose’ ” of Congress (Medtronic, supra, 518 U.S. at p. 485) to preclude states from providing private remedies for the violations of the state statutes at issue here.

n. DISCUSSION

We begin by noting the type of preemption defendants assert here. As the Court of Appeal concluded, it is clear that Congress has not expressly preempted private claims predicated on state laws imposing requirements identical to those contained in the FDCA (see §§ 337, 343-1), and defendants do not claim otherwise. Neither do defendants contend that plaintiffs’ action is impliedly preempted as a result of Congress occupying the field. Nor do defendants argue the action is preempted because compliance with both state and federal laws is impossible—as state and federal laws impose identical requirements regarding the disclosure of the use of artificial coloring, compliance with one necessarily ensures compliance with the other. (Compare, e.g., § 343(k) with Health & Saf. Code, § 110740.) Instead, defendants assert plaintiffs’ claims are impliedly preempted because they stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.

The Court of Appeal concluded that plaintiffs’ action was indeed impliedly preempted, basing its holding solely on its reading and application of section 337(a). While the Court of Appeal acknowledged that the statute’s plain language limits its scope to efforts that seek to enforce the FDCA itself, it nonetheless concluded that section 337(a) also operates to preempt plaintiffs’ purely state law claims. The Court of Appeal reasoned that, because section 337(a) explicitly bars the private enforcement of FDCA provisions (Buckman, supra, 531 U.S. at pp. 349, fn. 4, 352), section 337(a) must therefore also impliedly bar private claims predicated on state provisions imposing requirements identical to those contained in the FDCA. However plausible the Court of Appeal’s reasoning may appear when section 337(a) is considered in isolation, its reasoning is seriously undermined when section 343-1 is taken into account. Accordingly, we begin with a discussion of that statute.

A. Section 343-1 Permits States to Adopt Identical Requirements

The words of section 343-1 clearly and unmistakably evince Congress’s intent to authorize states to establish laws that are “identical to” federal law. (§ 343-1; Consumer Justice, supra, 99 Cal.App.4th at p. 1065.) That is precisely what California did in enacting the Sherman Law. The Sherman Law provision prohibiting misbranding with regard to the use of color additives (Health & Saf. Code, § 110740) is identical to section 343(k), the parallel federal requirement specifically listed in section 343-1 as one of the federal statutes covered by the express preemption provision. Additionally, the Sherman Law incorporates all of the food labeling regulations promulgated by the FDA (Health & Saf. Code, § 110100, subd. (a)), including those having to do with the use of astaxanthin and canthaxanthin in the feeding of farmed salmon (21 C.F.R. §§ 73.35, 73.75 (2007)). Accordingly, the state requirements at issue here are explicitly permitted by section 343-1. (See Consumer Justice, supra, 99 Cal.App.4th at p. 1065 [“[s]tales can enforce labeling rules which are identical . . .” (original italics)].)

While Congress clearly stated its intent to allow states to establish their own identical laws, it said absolutely nothing about proscribing the range of available remedies states might choose to provide for the violation of those laws, such as private actions. Nor is there anything in the legislative history suggesting that any proponent of the legislation intended a sweeping preemption of private actions predicated on requirements contained in state laws. Defendants cite portions of the legislative history for that proposition, but the cited excerpts actually bolster our conclusion. For example, defendants point to the remarks of Representative Henry Waxman, who originally introduced the NLEA in the House of Representatives: “[The NLEA] 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.” (Remarks of Rep. Waxman, 136 Cong. Rec. 1539 (daily ed. July 30, 1990) italics added.)

Far from establishing that Congress intended to preclude private claims based on state laws, Representative Waxman’s remarks suggest the opposite. By explicitly stating that the NLEA would allow states to enforce the federal requirements in federal court, but not discussing who would be allowed to enforce the identical state requirements, the remarks suggest that Congress did not intend to alter the status quo, i.e., states may choose to permit their residents to file unfair competition or other claims based on the violation of state laws (see, e.g., Children’s Television, supra, 35 Cal.3d at pp. 210-211). If Congress intended to permit states to enact identical laws on the one hand, but preclude states from providing private remedies for violations of those laws on the other hand, “its failure even to hint at it is spectacularly odd.” (Medtronic, supra, 518 U.S. at p. 491 (plur. opn. of Stevens, J.).) Congressional silence on this point is all the more strange in light of Congress’s presumed awareness that “[v]irtually every state in the nation permits one or more nongovernmental parties to enforce state . . . laws of general applicability prohibiting deceptive or unfair acts and practices in the marketplace.” (Annot., Right to Private Action Under State Consumer Protection Act—Preconditions to Action (2004) 117 A.L.R.5th 155.)

Further undermining defendants’ interpretation is the fact that Congress made clear that the preemptive scope of section 343-1 was to sweep no further than the plain language of the statute itself. In NLEA section 6(c)(1) (an uncodified provision), Congress provided that “[t]he [NLEA] shall not be construed to preempt any provision of State law, unless such provision is expressly preempted under [section 343-1] of the [FDCA].” (Pub.L. No. 101-535, § 6(c)(1) (Nov. 8, 1990) 104 Stat. 2364.) Thus, Congress’s decision not to expressly supplant private claims based on those state laws authorized by section 343-1 should be interpreted as its considered decision to continue to allow states to provide such private remedies.

The language of this uncodified provision is significant for two additional reasons. First, it evidences an intent to allow state and federal regulation to coexist. “Where Congress establishes a regime of dual state-federal regulation, ‘conflict-pre-emption analysis must be applied sensitively ... so as to prevent the diminution of the role Congress reserved to the States while at the same time preserving the federal role.’ [Citations.]” (Viva! International, supra, 41 Cal.4th at p. 942.) Defendants’ interpretation would substantially interfere with state legal remedies, “producing a serious intrusion into state sovereignty while simultaneously wiping out the possibility of remedy for the [plaintiffs’] alleged injuries.” (Medtronic, supra, 518 U.S. at pp. 488-489 (plur. opn. of Stevens, J.).)

Second, the provision’s language is significant because it informs our analysis of the existence of any implied preemption. “[A]n express definition of the pre-emptive reach of a statute ‘implies’—i.