Priorruling discussed here. Brod triedagain, alleging that Sioux Honey violated the CLRA and UCL and breached expressand implied warranties by selling pollen-free honey in California not labeledas pollen-free despite state law. The court dismissed the complaint withoutleave to amend this time, because California law didn’t do what Brod said itdid. (Leaving me with the question: thecourt reads the relevant law as a ban on the sale of pollen-free honey labeledas “honey.” As a labeling requirement, that’s preempted, but what about as aflat-out ban of the sale of such a product in the state? Suppose Brod made his claims under the “unlawful”prong of the California statutes. Would that be a valid claim? My instinct is that a flat-out ban is notpreempted, at least, but from there I’m uncertain (for example, what happensunder general “safe harbor” principles when the state specifically bans sellinga product for which the FDA has labeling rules?).)
The relevant California law says, in part, “no pollen orconstituent particular to honey may be removed except where unavoidable in theremoval of foreign inorganic or organic matter.” Brod’s basic argument wasthat, by failing to disclose that its honey was filtered and pollen-free, SiouxHoney induced him and other putative class members to pay more than they wouldhave had they known that the honey violated state law.
The court first found, as it had earlier, that Brod hadconstitutional standing. He contended that California law made nonsalable anyhoney that had pollen removed unless it was sold with a disclosure that it wasfiltered or pollen-free, and that he and other class members wouldn’t havebought the product had they known that it didn’t comply with California lawrequiring pollen in honey. Theseallegations were sufficient to plead economic injury and thus Article IIIstanding. Whether or not a court might objectively view two products asfunctionally equivalent, if the consumer was deceived into buying a productthat she otherwise wouldn’t have, she’s suffered economic harm. Sioux Honey cited cases from otherjurisdictions, which were neither binding nor on point, since they involvedalleged failures to disclose the presence of a substance that made a product “indiscerniblydissimilar” from what consumers believed they were buying, whereas Brod allegedthat the product here was different enough that he and others wouldn’t havebought it (or paid as much for it). Riverav. Wyeth-Ayerst Laboratories, 283 F.3d 315 (5th Cir. 2002), involved a productthat delivered the medical benefits consumers expected, and there was noallegation that they paid more than they would have if the alleged risks hadbeen properly disclosed. Here, bycontrast, Brod claimed not to have received the benefit of his bargain.
Sioux Honey then argued that the complaint should bedismissed because it labeled its honey properly, thus preventing Brod fromsuffering an injury in fact. The courtsuccinctly rejected this standing-as-garbage-can argument:
Sioux Honey's argument misconstruesthe scope of assessing constitutional standing, conflating it with the meritsof the legal claims asserted. For thepurpose of evaluating Brod's standing to sue, it is enough that he allegesSioux Honey had a duty to label Sue Bee Honey in a way that discloses theremoval of pollen to potential consumers.… Whether or not Brod's complaintproperly construes California's Food & Agricultural Code, and whether ornot Sioux Honey's alleged conduct violated those provisions, are not part of aninquiry into Plaintiff's Article III standing.
Sioux Honey then renewed its preemption argument, which thecourt then rejected (though not to Sioux Honey’s ultimate detriment). Sioux Honey read federal labelingrequirements too broadly. There’s nofederally prescribed “standard of identity” for honey, which means that underfederal law it will be misbranded “[u]nless its label bears (1) the common orusual name of the food, if any there be, and (2) in case it is fabricated fromtwo or more ingredients, the common or usual name of each such ingredient ...” The court previously held that the commonname of the product was “honey” even if all pollen had been removed. However, this didn’t bar a disclosurerequirement. Federal law expresslypreempts any state law requiring a food to be labeled with something other thanits common or usual name, so California couldn’t require filtered honey to belabeled something other than “honey.” But, given the presumption againstpreemption and states’ traditional role in health and safety issues, Californiacould impose a separate disclosure requirement without running afoul of thefederal common name rule.
However, Brod still lost because that’s not what Californiahad actually done. By its terms, statelaw required that any product labeled as honey had to contain pollen to belawfully sold in California. It didn’trequire disclosure of pollen removal, and a ban is different from a disclosurerule. Indeed, even if Sioux Honey haddisclosed the removal, it would still have been in violation of the relevantstate law. Plus, the legislature knewhow to write a disclosure rule about honey: several other provisions of therelevant law required disclosures about other things.
Given all this, Brod didn’t show that Sioux Honey failed tocomply with California law insofar as he meant that Sioux Honey failed todisclose the absence of pollen. Could this nonetheless be an independent misrepresentationof the quality, characteristics, and/or ingredients of the products, whichwould also violate the CLRA, UCL, etc.? Broad’smisrepresentation theory required a showing that a reasonable consumer would belikely to be deceived by an allegedly misleading statement. The reasonable consumer is the ordinaryconsumer acting reasonably under the circumstances; she need not be “exceptionallyacute and sophisticated.” Brod didn’tplead sufficient facts to plausibly show that a reasonable consumer would bemisled into believing that Sioux Honey’s product contained pollen. “It iscertainly possible that a particularly sophisticated consumer might considerpollen to be a valuable component of honey, such that the non-disclosure of itsremoval from Sue Bee Honey would likely result in deception to him or her.This, however, does not establish that the reasonable consumer would expecthoney to contain pollen.”
Looking atmany state statutes and dictionary definitions of honey, none identified pollenas necessary “or even notable.” “California'sown statutory definition of honey omits any reference to pollen, and has doneso since at least 1967.” Californiaspecifically requires disclosure of the addition of pollen, but not of itsremoval. Plus, the Department of Agriculture considered honey “Grade A” when itwas free from pollen, air bubbles, and fine particles for much of the latter 20thcentury. Thus, the situation stronglysuggested that “pollen has not traditionally been considered a constitutingelement of honey such that its undisclosed removal would likely be considereddeceptive by the reasonable consumer.”
Plaintiff’s counsel described the claim this way: “We arealleging that the reasonable consumer expects if there is a law governing theirfoodstuffs that they go to buy, that that law has been complied with. And ifit's not complied with, it should be disclosed.” But the honey labeling requirement waspreempted by the FDCA and was without force “to the extent that it purports toban Sue Bee from labeling its honey as ‘honey.’” Plus, even if consumers had constructivenotice of state law, they’d also have constructive notice of the meaning of “GradeA,” which includes being free from pollen, which means that the lack of pollenwas constructively disclosed on the label. This was the rare case in which deceptiveness could be resolved on amotion to dismiss.
In addition, Brod failed to plausibly plead materiality to areasonable consumer, for the same reasons. There were no facts alleged in the complaintshowing that the presence or absence of pollen plays a substantial part in areasonable consumer’s decision to purchase honey, given the federal “Grade A”standards and the dictionary/state law definitions of honey.
For much the same reasons, the warranty claims failed. California’s implied warranty ofmerchantability doesn’t impose a general requirement that goods preciselyfulfill buyers’ expectations, but rather provide for a minimum level ofquality. Given Sioux Honey’s compliancewith the FDCA’s common or usual name requirement, that was satisfied; Brod didn’tsuccessfully plead facts showing that the honey wasn’t fit for the ordinarypurposes for which it was used.
As a result, Sioux Honey’s Dormant Commerce Clause challengeto California law was rendered moot, and the complaint was dismissed withprejudice.
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