Food for Thought: Lilly v. ConAgra Foods, Inc.

February 23, 2015
Lilly v. ConAgra Foods, Inc., No. 12-55921, 2014 WL 644706 (9th Cir. Feb. 20, 2014)

In Lilly, plaintiff brought a putative class action complaint against ConAgra Foods, Inc., alleging the sodium content in its David brand sunflower seeds was higher than disclosed on the packaging. Specifically, the plaintiff alleged that the sodium content listed on the nutrition facts panel of the package of seeds either did not disclose the sodium content of "the sunflower seeds and the shells" or did not state the "salt content of the sunflower kernels and shells in equal prominence." Plaintiff took the position that the flavor coating placed on the outside of sunflower seed shells is intended to be ingested before the inedible shell is spat out (and the kernel is eaten), and as such, the sodium content of the outer shells must be included on the nutrition facts panel. Plaintiff argued that by not disclosing the salt content on the outside of the non-ingested seed, ConAgra Foods violated three California statutes: the Consumer Legal Remedies Act (Cal. Civ. Code § 1750 et seq.); the False Advertising Laws (Cal. Bus. & Prof. Code § 17500 et seq.); and the Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.).

The district court granted ConAgra’s motion to dismiss on express preemption grounds, holding that plaintiff sought "to impose an additional sodium labeling requirement that [was] not identical to the" Nutritional Labeling and Education Act (21 U.S.C. § 343) meaning her "state law claims [were] expressly preempted." The Ninth Circuit disagreed.

The court noted that under the statutory and regulatory framework associated with the Federal Food, Drug, and Cosmetic Act of 1938, 21 U.S.C. §§ 301 et seq. and the Nutrition Labeling and Education Act of 1990 (NLEA), a food’s label is required to include the amount of sodium "in each serving size or other unit of measure." 21 U.S.C. § 343(q)(1)(D). The NLEA also provides that no state may "directly or indirectly establish . . . any requirement for the labeling of food that is not identical" to the federal requirements. 21 U.S.C. § 343-1(a)(5).

Nonetheless, the court rejected ConAgra’s argument that the lawsuit was an attempt to force it to include the sodium content of an inedible portion of the food, i.e. sunflower seed shells, because it ignored the fact that, although the shells themselves are inedible, the coating placed on the shells is edible. Accordingly, the edible coating, whether "Ranch" flavored, "Nacho Cheese" flavored, or otherwise, must be accounted for in the sodium content calculation.

ConAgra Foods attempted to argue in the alternative that dismissal was still appropriate because no reasonable consumer would be deceived by the labeling on its David brand packaging. The Ninth Circuit noted that such an argument was not addressed at the district court level and likely contained questions of fact, not appropriate for a decision on a motion to dismiss. Interestingly, a California district subsequently distinguished Lilly on this basis. In Weiss v. Kroger Company, No. CV14-3780-R, 2014 WL 5114608 (C.D. Cal. Aug. 8, 2014), the court noted that Lilly was solely concerned with preemption and therefore did not control its analysis of alleged false or misleading advertising and unfair business practices claims under the "reasonable consumer test." In Weiss, the defendant seed manufacturer identified the amount of sodium contained in the "edible portion" of the product. The court granted the sunflower seed manufacturer’s (and grocer’s) motion to dismiss, reasoning that a "reasonable consumer knows that the seed is edible and that the shell is not, and would understand that the edible portion that the label referred to was the seed. Any allegations to the contrary were implausible and therefore subject to Rule 12(b)(6) dismissal.

In Lilly, the dissent wrote that the applicable regulation plainly states that the amount of sodium for food labeling purposes is "based on only the edible portion of food, and not bone, seed, shell, or other inedible components." 21 C.F.R. § 101.12(a)(6) (emphasis supplied). "Although we might prefer a regulation that includes the shell’s absorbed salt and to draw a distinction between an edible ‘coating’ and an inedible shell, we are nonetheless bound to apply this unambiguous regulation objectively as it has been written."

Read more significant court decisions affecting the food industry in Food for Thought: 2014 Litigation Annual Review.

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