“A product labeled ‘all natural’ . . . likely evokes images of ground herbs and earth extracts rather than chemicals such as ‘Polysorbate 20’ or ‘Hydroxycitronellal.’”

With that opening sentence, the Ninth Circuit Court of Appeals revived a nationwide class action brought by serial plaintiff Skye Astiana against The Hain Celestial Group, Inc., in the Northern District of California. Specifically, plaintiff claims that Hain’s “All Natural” cosmetics contain artificial ingredients, rendering the labeling “false or misleading” in violation of state and federal law.  

The district court had dismissed the lawsuit based on the doctrine of primary jurisdiction, which holds that “an otherwise cognizable claim [that] implicates technical and policy questions . . . should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.” Hain also argued that plaintiff’s claims were preempted by the Food, Drug and Cosmetic Act (“FDCA”), but the district court did not rule on that argument. Nonetheless, Hain asked the Ninth Circuit to address preemption based on the court’s authority to “affirm on any grounds supported by the record.”

The Ninth Circuit accepted Hain’s invitation and addressed preemption first, quickly disposing of Hain’s reliance on the FDCA’s express preemption provision for cosmetics labeling. That provision prohibits a state from requiring “labeling or packaging of a cosmetic that is different from or in addition to, or that is otherwise not identical with” federal rules. Relying on a limited review of Supreme Court preemption precedent—citing Medtronic, Inc. v. Lohr and Bates v. Dow Agrosciences LLC—the Ninth Circuit held that plaintiff’s claims were permitted because they did not seek to modify any aspect of the label dictated by federal law. In other words, federal regulations do not specifically address “natural” or “all natural” labeling, and thus a state law requirement addressing only that portion of the labeling is not expressly preempted. The court did not address implied preemption of plaintiff’s attempt to enforce the FDCA’s prohibition against labeling that is “false or misleading in any particular.”

The Ninth Circuit next concluded that although the district court properly invoked primary jurisdiction—“[d]etermining what chemical compounds may be advertised as natural on cosmetic products labels is a particularly complicated issue that Congress has committed to the FDA”—it erred in dismissing the case. Specifically, the appellate court clarified that when “further judicial proceedings are contemplated,” a district court should retain jurisdiction through a stay of proceedings, rather than dismissing the case. Here, referral to the FDA would not be for adjudication of the claim, but rather to provide “expert advice” to assist the court’s adjudication of the claims. Moreover, “[b]ecause the Ninth Circuit has not clearly adopted the doctrine of equitable tolling in primary jurisdiction cases, prudence dictates that a court should stay proceedings, rather than dismissing them,” in order to prevent the statute of limitations from running.

In short, the Ninth Circuit confirmed that so-called parallel violation claims—in which state law claims parallel federal requirements without triggering preemption—apply to cosmetic labeling governed by the FDCA. The court further clarified that primary jurisdiction is not a dispositive substitute for preemption, but rather a doctrine focused on the efficient resolution of cases that implicate the “uniformity in administration” of a federal regulatory scheme.

Ballard Spahr’s Product Liability and Mass Tort group has substantial experience defending regulated consumer products in class action litigation. For more information, please contact Michael R. Carroll at 856.761.3452 or carrollm@ballardspahr.com.

Copyright © 2015 by Ballard Spahr LLP.
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