Kelley Drye Wins Early Dismissal of Food Labeling Class Action as Affirmed by Appellate Court

On September 25, 2013, international law firm Kelley Drye & Warren LLP won an appellate victory affirming the early dismissal of a consumer class action at demurrer against their clients, Challenge Dairy, Inc. and Kroger Inc. The class action alleged that the labeling of Challenge’s ​“Spreadable Butter With Canola Oil” product was false and misleading because the label used the word ​“butter” to name a food that is not a 100% butter product. The three judge Appellate Court panel found that 1) Plaintiff’s claims brought under California’s Milk and Milk Processing Act (“MMPA”) were preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”); and 2) the Plaintiff’s motion to add additional alleged claims under California’s Sherman Act had been properly denied because no reasonable consumer could have been deceived by the labeling of the product.

Plaintiff  Mary Simpson mounted the class action against Kroger, its subsidiary Ralphs Grocery Co., and Challenge Dairy Products, Inc. in December 2011, claiming that using the term ​“butter” as part of the name of a product consisting of ​“butter with oil” violated the California butter labeling requirements under the MMPA. The Defendants moved to dismiss the Plaintiff’s claims on the grounds that they were preempted by the national uniform labeling requirements that have been established under the FDCA, CDA, and the complaint was dismissed, with prejudice, by the trial court on May 15, 2012.

In a published decision, the California Court of Appeals affirmed the lower court’s ruling that the Plaintiff’s claims brought under California’s MMPA were preempted by the FDCA, which governed the naming and labeling of butter and ​“butter with oil” combination products, and any purported contrary regulation in the MMPA was expressly and impliedly preempted by federal law. The court went on to find the labeling of Challenge’s products were not false and misleading as a matter of law, because no reasonable consumer would think the product contained 100% butter, as alleged by the plaintiff.

Ralphs Grocery Co. and Challenge Dairy Products, Inc. are represented by Donnelly L. McDowell of Kelley Drye & Warren LLP.

The case is Mary L. Simpson v. The Kroger Corp. et al., case number B242405, in the Court of Appeal of the State of California, Second Appellate District.