Reasonable consumers won’t be fooled by spreadable butter, California appeals court says

A Los Angeles judge properly dismissed a class action that alleged a spreadable butter product containing oil was mislabeled because no reasonable person would conclude it contained 100 percent butter, a California appeals court has ruled.

In affirming the lower court’s judgment, a unanimous three-judge panel of the 2nd District Court of Appeal also said the suit should be dismissed because federal law preempts the state labeling laws cited in the complaint.

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“Receiving a unanimous decision from the appellate court panel is validating of the responsible labeling practices of our clients, and makes clear that the arguments the plaintiff’s advanced in attacking our client’s labeling are implausible and fall far short of the reasonable consumer standard,” lead defense attorney Keri E. Borders of Kelley Drye & Warren said in a statement.

According to the appellate panel’s opinion, Mary Simpson sued spreadable butter’s manufacturer, Challenge Dairy Products Inc., and grocery store operator Kroger Corp., alleging the companies misrepresented the spread, which contains butter and either canola or olive oil, as “butter.”

(Click here for the appellate opinion).

Including the word butter on the label when the product also contains oils violates California’s Milk and Milk Products Act of 1947, Cal. Food & Agric. Code § 32501, Simpson said.

She sought restitution and injunctive relief on behalf of a nationwide class of consumers as well as a subclass of California purchasers of Challenge’s spreadable butter.

The defendants filed a demurrer, arguing the products are properly labeled according to label guidelines in the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301, which the companies said preempts state law.

The FDCA creates uniform national standards for food labeling.  States are free to enact their own requirements “so long as they are identical” to the federal standards, the appellate opinion said.

Judge Barbara Scheper of the Los Angeles County Superior Court dismissed Simpson’s suit with prejudice, finding that the federal labeling requirement for non-standardized butter preempts the Milk and Milk Products Act, which has no requirements for such a product.

Simpson appealed.

While maintaining that federal law does not preempt the MMPA, Simpson also argued on appeal that the trial judge should have allowed her to amend her suit to add claims that the product labels violated the state’s Sherman Food, Drug and Cosmetic Law, Cal. Health & Safety Code § 109875, according to the appellate opinion.  The Sherman Law mirrors the labeling provisions of federal law.

In her appeal, Simpson contended that the labeling is misleading, in violation of the Sherman Law, not because the word butter is included, but because it is too prominent as compared with the names of the additional oils.

She also argued that the MMPA is not preempted because the federal definition of margarine and the state’s definition of spread are “substantially identical” and that the requirements in both laws for such a butter substitute are the same.

But the appeals court said the FDCA does not include an exception for state laws that are “substantially identical” rather than just identical to federal law in the preemption provision, the appellate panel said.

The panel ruled that Simpson cannot raise the issue of Sherman Law violations for the first time on appeal, but even if she could, the court said it would reach the same conclusion and dismiss the claims.

The Superior Court did not abuse its discretion by not allowing Simpson to amend her suit and add the Sherman Law claims, the appeals court said, because she cannot allege that a reasonable consumer would be misled by the product labels that clearly show the presence of the oils.

Simpson v. Kroger Corp. et al., No. B242405, 2013 WL 5347881 (Cal. Ct. App., 2d Dist. Sept. 25, 2013).