Source: http://www.uclpractitioner.com/ucl_preemption/index.html
Timestamp: 2018-01-20 01:34:25
Document Index: 572017977

Matched Legal Cases: ['§22575', '§ 1', '§ 651', '§ 3370', '§ 14501', '§ 301', '§ 32501', '§ 109875', '§1331', '§1331', '§21', '§2', '§ 25249', '§ 109875', '§ 301', '§ 301', '§ 337', '§ 343', '§ 301']

Last week, the Supreme Court announced that a UCL public prosecutor action, in which review was granted in 2015, will be orally argued on November 7, 2017 at 10:00 a.m. during the Court's special session in Sacramento. Solus Industrial Innovations v. Superior Court (People), No. S222314.
For a discussion of the procedural history of this case, see these two blog posts. The Court of Appeal held that federal law (namely, Fed/OSHA) preempted the Orange County District Attorney's UCL and FAL prong claims, which are predicated in part on asserted violations of state workplace safety standards (i.e., Cal/OSHA). Solus Industrial Innovations LLC v. Superior Court (People), 229 Cal.App.4th 1291 (2014), review granted.
Copies of the Supreme Court briefs can be obtained at this link.
This is another opinion from earlier in the year (May) that I haven't yet reported on.
In People ex rel. Harris v. Delta Air Lines, Inc., 247 Cal.App.4th 884 (2016), the Attorney General brought a UCL "unlawful" prong action against Delta Air Lines, alleging that Delta's mobile app violated the Online Privacy Protection Act (Cal. Bus. & Prof. Code §§22575-79). The Court of Appeal (First Appellate District, Division Three) affirmed the trial court's holding that this claim was expressly preempted by the federal Airline Deregulation Act of 1978.
Of interest is the Court's conclusion that the claim "related to" Delta's air transportation services:
We also reject the Attorney General's argument that the complaint does not relate to Delta's services. By its complaint, the State seeks to compel Delta to maintain its Fly Delta mobile application in compliance with the OPPA's privacy policy requirements. The Fly Delta mobile application, selected and designed to facilitate access to the airline's services, is a marketing mechanism "appropriate to the furnishing of air transportation services." (Wolens, supra, at p. 228.) As alleged in the complaint, the Fly Delta mobile application, at a minimum, "may be used to check-in online for an airplane flight, view reservations for air travel, rebook cancelled or missed flights, pay for checked baggage, track checked baggage, and access a user's frequent flyer account." Thus, it is clear, beyond cavil, that the complaint does "relate to" Delta's services in that the allegations have a "connection with, or reference to" Delta's services.
Posted by Kimberly A. Kralowec at 04:00 AM in UCL - preemption, UCL - public prosecutor actions | Permalink | Comments (0)
Earlier this year, the Court of Appeal (Fourth Appellate District, Division Three) handed down its opinion in Solus Industrial Innovations, Inc. v. Superior Court, 224 Cal.App.4th 17 (2014), review granted.
Solus is a UCL public prosecutor action for civil penalties for alleged violations by an employer of California's workplace safety standards. The defendant argued that the claim was preempted by federal law; the Orange County District Attorney's office argued that because the U.S. Secretary of Labor had approved California's safety standards, California may enforce them by any mechanism approved by the Legislature, including the UCL.
The Court of Appeal disagreed, based largely on a curious misunderstanding about when the UCL was first enacted:
Our assessment of whether the district attorney’s UCL causes of action are preempted by federal law begins with the observation that the UCL was enacted in 1977 (Stats. 1977, ch. 299, § 1, p. 1202), which is after the Secretary initially approved California’s workplace safety plan. Hence, there is no basis to infer that reliance on those provisions as a supplemental remedy for violation of California’s workplace safety standards was contemplated as part of the Secretary’s initial decision approving California’s plan.
Slip op. at 11 (bold added; italics in original).
In my blog post on the Court of Appeal's opinion in this case, I wrote as follows:
Solus Industrial Innovations v. Superior Court, No. S217651 (emphasis added).
It will be interesting to see the new opinion when it is handed down.
Last week, the Supreme Court announced that it will be handing down its opinion this morning in People ex rel. Harris v. Pac Anchor Transportation, Inc., no. S194388. Harris is a UCL public prosecutor action in which the defendant asserts federal preemption.
When the opinion is posted online at approximately 10:00 a.m., it should be available at this link:
Posted by Kimberly A. Kralowec at 04:00 AM in UCL - preemption, UCL - Supreme Court | Permalink | Comments (0)
New UCL public prosecutor opinion addresses federal preemption: Solus Industrial Innovations LLC v. Superior Court
In Solus Industrial Innovations LLC v. Superior Court, ___ Cal.App.4th ___ (Feb. 24, 2014; mod. Mar. 17, 2014), the Court of Appeal (Fourth Appellate District, Division Three) held that the Orange County District Attorney's action for civil penalties under the UCL was preempted by Fed/OSHA (the federal Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq.)).
Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 194-95 (1999) (Kennard, J., dissenting) (emphasis added).
The UCL has allowed public prosecutors to bring suit to enjoin "unlawful" conduct since 1963. It is possible that the Court of Appeal meant to say that the provisions allowing public prosecutors to recover civil penalties in UCL actions were first enacted in the 1970s, but even those first appeared in 1972, not 1977. See fmr. Civ. Code § 3370.1 (stats. 1972, ch. 1084, p. 2021), cited in People v. Superior Court (Olson), 96 Cal.App.3d 181, 191 (1979). All that happened in 1977 was that the UCL was recodified as part of the Business and Professions Code.
Here's another curious excerpt from the Solus opinion:
This overlooks the fact that the UCL plainly authorizes penalties of less than $2,500 (the statute says "up to" that amount "per violation") and that the trial court has significant discretion in determining what "per violation" means. The text of section 17206(b) lists the factors the trial court must consider in determining the size of a penalty award:
Of course, Kwikset did not involve either foodstuffs or preemption. And Quesada's reasoning appears to apply only if the defendant is a federally-certified grower:
With this state-federal statutory framework in mind, we turn to the preemption question, that is, whether Quesada’s state consumer lawsuit against a certified organic grower based on mislabeling its product as “organic,” in violation of the OFPA or COPA is preempted.
Last week, on December 11, 2013, the Supreme Court issued a "grant and hold" order in Rodriguez v. RWA Trucking Co., No. S214150.
In Rodriguez, the Court of Appeal held that the plaintiffs' UCL "unlawful" prong claims were preempted, in part, by federal law, namely, the Federal Aviation Administration Authorization Act of 1994 (49 U.S.C. § 14501) ("FAAAA"). See Rodriguez v. RWA Trucking Co., ___ Cal.App.4th ___ (Sept. 12, 2013; mod. Sept. 20, 2013) (discussed in this blog post).
In Simpson v. The Kroger Corp., ___ Cal.App.4th ___ (Sept. 25, 2013), the Court of Appeal (Second Appellate District, Division Four) affirmed dismissal of plaintiff's UCL, FAL and CLRA claims, which asserted that the defendant, who makes Challenge butter, mislabeled its spreadable "butter" products. (The action also named the supermarket where the plaintiff purchased the products.) According to the complaint, the spread is not "butter" because it contains canola and/or olive oil (sounds like margarine to me, although later the opinion clarifies that this was not plaintiff's contention). Slip op. at 2-4, 8-9.
This is one of the challenged labels (no pun intended):
First, the opinion addresses preemption, holding that the federal Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.) preempts the California Milk and Milk Products Act of 1947 (Food & Agr. Code §§ 32501 et seq.) (which appears to have a more narrow definition of "butter" than the federal Act) but not the California Sherman Food, Drug and Cosmetic Law (Health & Saf. Code §§ 109875 et seq.). Slip op. at 5-16.
Then, the opinion holds that regardless of the preemption analysis, the UCL, FAL and CLRA claims failed because "plaintiff has not, and as a matter of law cannot, allege that a reasonable consumer would have been mislead [sic] by the labels here." Id. at 17. Of interest, the opinion confirms the substantive "likely to deceive" standard for these claims:
Although California “courts have held that reasonable reliance is not an element of the claims under [the three statutory schemes alleged],” a plaintiff must establish that consumers were likely to be deceived by the product. ([Yumul v. Smart Balance, Inc. (C.D. Cal. 2010) 733 F.Supp.2d 1117,] 1125; In re Vioxx Class Cases (2009) 180 Cal.App.4th 116, 130 [to state a claim for deceptive advertising under the Consumer Legal Remedies Act, a plaintiff “need only establish that members of the public were likely to be deceived by the advertising.”]; Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 682 [to establish a false advertising claim, “a plaintiff need only show that members of the public are likely to be deceived” under a “‘reasonable consumer’ standard”].)
.... The labels on the products here clearly informed any reasonable consumer that the products contain both butter and canola or olive oil. This was plain on both the top and side panels of the tubs in which the products are sold. No reasonable person could purchase these products believing that they had purchased a product containing only butter. The trial court did not abuse its discretion in denying leave to amend.
Posted by Kimberly A. Kralowec at 05:00 AM in UCL - "fraudulent" prong, UCL - preemption | Permalink | Comments (0) | TrackBack (0)
New Ninth Circuit UCL preemption decision: Aguayo v. U.S. Bank
In Aguayo v. U.S. Bank, ___ F.3d ___ (9th Cir. Aug. 1, 2011), the Ninth Circuit held that federal law (namely, the National Bank Act and implementing OCC regulations) did not preempt a UCL "unlawful" prong claim predicated on violation of the Rees-Levering Act.
Posted by Kimberly A. Kralowec at 05:00 AM in UCL - preemption | Permalink | Comments (0) | TrackBack (0)
Posted by Kimberly A. Kralowec at 05:00 AM in Class actions - certification, Class actions - discovery, Prop. 64 - injury in fact, UCL - preemption, UCL - public prosecutor actions | Permalink | Comments (0) | TrackBack (0)
This morning, the Supreme Court just handed down its opinion in Wyeth v. Levine, ___ U.S. ___ (Mar. 4, 2009). The Court held, by a vote of 6 to 3, that the FDA's approval of the defendant's labeling of its medical device prescription drug did not preempt plaintiffs' state law product liability (failure to warn) claim. This decision is generally viewed as a companion to Altria Group, Inc. v. Good, ___ U.S. ___, 129 S.Ct. 538 (Dec. 16, 2008) (discussed in this blog post), in which the Court held that the Federal Cigarette Labeling and Advertising Act (15 U.S.C. §§1331 et seq.) did not preempt a state-law claim for deceptive advertising of light cigarettes.
The New York Times has more on the Wyeth decision in this article.
CORRECTION: I wrote my post above a little too hurriedly. I should have said that the Wyeth case is considered a companion to Riegel v. Medtronic, Inc., ___ U.S. ___, 128 S. Ct. 999 (2008), in which the Supreme Court held that state-law product liability claims for FDA-approved medical devices were preempted. With Altria and Wyeth, perhaps the preemption tide is turning.
Posted by Kimberly A. Kralowec at 10:42 AM in UCL - preemption | Permalink | Comments (0) | TrackBack (0)
By now, you have probably already read the Supreme Court's new preemption decision, Altria Group, Inc. v. Good, ___ U.S. ___, 129 S.Ct. 538 (Dec. 16, 2008). (See this blog post for my original coverage of this case.) In Altria, the Supreme Court held that the Federal Cigarette Labeling and Advertising Act ("FCLAA") (15 U.S.C. §§1331 et seq.) did not preempt a claim under the Maine Unfair Trade Practices Act (a statute very similar to the UCL) for deceptive advertising of "light" cigarettes.
I have been thinking about the impact of this case, if any, on the pending Tobacco case, in which we expect the California Supreme Court to interpret Prop. 64. The California Supreme Court's earlier preemtion decision was, if anything, narrower than Altria. In In re Tobacco Cases II, 41 Cal.4th 1257 (2007) (discussed in this post), the California Supreme Court held that the FCLAA did partly preempt the UCL claims in that case -- to the extent they had to do with marketing cigarettes to minors. The Supreme Court considered itself bound by Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001), but in Altria v. Good, the U.S. Supreme Court distinguished that case:
Reilly involved regulations promulgated by the Massachusetts attorney general “‘in order to address theincidence of cigarette smoking and smokeless tobacco use by children under legal age ... [and] in order to prevent access to such products by underage customers.’” 533 U. S., at 533 (quoting 940 Code Mass. Regs. §21.01 (2000)). The regulations did not pertain to the content of any advertising; rather, they placed a variety of restrictions on certain cigarette sales and the location of outdoor and point-of-sale cigarette advertising. The attorney general promulgated those restrictions pursuant to his statutory authority to prevent unfair or deceptive trade practices. Mass. Gen. Laws, ch. 93A, §2 (West 1996). But although the attorney general’s authority derived from a general deceptive practices statute like the one at issue in this case, the challenged regulations targeted advertising that tended to promote tobacco use by children instead of prohibiting false or misleading statements. Thus, whereas the “prohibition” in Cipollone was the common-law fraud rule, the “prohibitions” in Reilly were the targeted regulations. Accordingly, our holding in Reilly that the regulations were pre-empted provides no support for an argument that a general prohibition of deceptive practices is “based on” the harm caused by the specific kind of deception to which the prohibition is applied in a given case.
Altria, slip op. at 12.
The outcome of Altria is consistent with the Supreme Court's decision in March 2008 to deny cert. in the Tobacco preemption case. Review had already been granted in Altria in January 2008. And in supplemental letter briefs in Tobacco, the parties both took the position that the preemption case has no bearing on the Prop. 64 case. Even so, Altria may well prove to limit the precedential value of the California Supreme Court's Tobacco preemption decision going forward.
SCOTUSBlog reports that the U.S. Supreme Court heard oral argument yesterday in Wyeth v. Levine, no. 06-1249. In Wyeth, the Court will address whether FDA approval of warning labels precludes consumers from bringing state-law tort claims against drug manufacturers for failure to adequately warn of a drug's risks.
The transcript of the oral argument is available at this link, and here is my prior coverage of a similar preemption case, Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008), addressing medical devices.
New Third Circuit preemption decision: Fellner v. Tri-Union Seafoods, L.L.C.
In Fellner v. Tri-Union Seafoods, L.L.C., ___ F.3d ___ (Aug. 19, 2008), the Third Circuit held that the FDA's "regulatory actions" did not preempt certain non-disclosure claims brought under New Jersey law. On Aug. 20, The Legal Intelligencer reported that "3rd Circuit Revives Mercury-in-Tuna Class Action."
This decision is of interest to California practitioners in light of this paragraph:
The factual landscape of this case is colored by recent litigation in California. On June 21, 2004, then-Attorney General of California, Bill Lockyer, filed a lawsuit against Tri-Union and other defendants under California’s “Proposition 65,” CAL. HEALTH & SAFETY CODE § 25249.6, seeking an injunction and civil penalties for defendants’ failure to warn consumers that their tuna products contain dangerous mercury compounds. While that suit was pending, the Commissioner of the FDA sent a letter to Mr. Lockyer expressing the opinion that the FDA’s prior regulatory actions preempt the State’s lawsuit. In the Commissioner’s view, the defendants would be unable to comply both with that approach and state law and the existence of the lawsuit would “frustrate the [FDA’s] carefully considered federal approach” to the issue of mercury in fish. See People v. Tri-Union Seafoods, 2006 WL 1544377 (Cal. Super. Ct. May 12, 2006) (taking judicial notice of the letter). In May 2006, following a bench trial, the Superior Court of California found the Attorney General’s lawsuit preempted by federal law. People v. Tri-Union Seafoods, 2006 WL 1544384 (Cal. Super. Ct. May 11, 2006), appeal docketed, No. A116792 (Cal. Ct. App. 1st Dist. Feb. 20, 2007).
Slip op. at 4-5. The Third Circuit panel disagreed, at least with respect to the particular New Jersey claims before it:
This is a situation in which the FDA has promulgated no regulation concerning the risk posed by mercury in fish or warnings for that risk, has adopted no rule precluding states from imposing a duty to warn, and has taken no action establishing mercury warnings as misbranding under federal law or as contrary to federal law in any other respect. Fellner’s lawsuit does not conflict with the FDA’s “regulatory scheme” for the risks posed by mercury in fish or the warnings appropriate for that risk because the FDA simply has not regulated the matter. Fellner’s duty-to-warn claim does not conflict with an FDA determination deliberately to forego warnings because the FDA took no action to preclude state warnings – at least, no binding action via ordinary regulatory procedures, and no action whatsoever until after Tri-Union allegedly wrongfully failed to warn. Finally, Fellner’s lawsuit does not conflict with the FDCA’s food misbranding provision or the FDA’s actions thereunder because the FDA has not exercised its misbranding authority under the FDCA with respect to methylmercury warnings for fish.
Today's Recorder has an article (subscription) on the Salmon decision. The Daily Journal also reports that "High Court Allows Suits Over Salmon" (subscription).
Looking at the decision more closely last night, it doesn't really say anything particularly new or interesting about the UCL or CLRA. The rationale for the decision was that the California law on which the UCL claim was predicated (i.e., the Sherman Food, Drug and Cosmetic Law (Health & Saf. Code §§ 109875 et seq.)) was "identical" to the relevant provisions of the Federal Food, Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.). The opinion did not analyze the CLRA claim separately from the UCL claim.
The opinion did have one interesting footnote that should remove any doubts concerning the propriety of citing unpublished federal district court rulings in California state courts:
In their briefs, the parties discuss an unpublished federal district court opinion which came to the same conclusion when considering nearly identical facts. (Vermont Pure Holdings, Ltd. v. Nestle Waters North America, Inc. (D.Mass., Mar. 28, 2006, No. Civ. A. 03-11465) 2006 WL 839486, *6, fn. 3.) Citing unpublished federal opinions does not violate our rules. (Cal. Rules of Court, rule 8.1115.) We find the court’s reasoning persuasive.
Slip op. at 22 n.18 (emphasis in original).
Posted by Kimberly A. Kralowec at 12:30 PM in News reports and practice articles, UCL - preemption, UCL - Supreme Court | Permalink | Comments (0) | TrackBack (0)
As I reported last Friday, the Supreme Court is due to post its opinion in Farm Raised Salmon Cases, no. S147171, by this morning at 10:00 a.m. When the decision is up, it will be accessible at this link: Farm Raised Salmon Cases, ___ Cal.4th ___ (Feb. 11, 2008). I will try to update this post later today with a summary of the holding.
UPDATE: As Kelly Chen predicted in her report on the argument, the Supreme Court has held that the Federal Food, Drug, and Cosmetic Act does not preempt plaintiffs' UCL and CLRA claims:
Plaintiffs filed a class and representative action alleging that various grocery stores violated state law by selling artificially colored farmed salmon without disclosing to their customers the use of color additives. Defendants successfully demurred in the trial court, arguing the action was preempted by section 337(a) of title 21 of the United States Code, a provision of the Federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. § 301 et seq.). The Court of Appeal affirmed the resulting judgment of dismissal.
We granted review to decide whether plaintiffs’ action was preempted by the FDCA. We conclude that section 337(a) does not preempt the action as plaintiffs do not seek to “enforce[ ], or to restrain violations” of, the FDCA. (§ 337(a).) Rather, plaintiffs’ claims for deceptive marketing of food products are predicated on state laws establishing independent state disclosure requirements “identical to” the disclosure requirements imposed by the FDCA, something Congress explicitly approved in section 343-1. (§ 343-1(a)(3).) Accordingly, we reverse the Court of Appeal’s judgment and remand the matter to that court for further proceedings consistent with our opinion.
Posted by Kimberly A. Kralowec at 06:00 AM in UCL - preemption, UCL - Supreme Court | Permalink | Comments (0) | TrackBack (0)
Today, the Supreme Court announced that it will be issuing its opinion Monday morning in an important preemption case, Farm Raised Salmon Cases, no. S147171. This case raises the following issue: "Does the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301 et seq.) impliedly preempt plaintiffs’ state law claims [including a UCL claim] against defendants for deceptive marketing of food products by failing to disclose that farmed salmon sold in their stores contains artificial coloring?" The Court of Appeal answered yes. See Farm Raised Salmon Cases, 142 Cal.App.4th 805 (2006).
Attorney Kelly Chen attended the Supreme Court argument in December and wrote up a report, which is available at this link. Kelly reported that the justices' questions suggested that they are leaning against a finding of preemption.
When the opinion is posted online Monday morning at 10:00 a.m., it should be available here: Farm Raised Salmon Cases, ___ Cal.4th ___ (Feb. 11, 2008).
Posted by Kimberly A. Kralowec at 12:30 PM in UCL - preemption, UCL - Supreme Court | Permalink | Comments (0) | TrackBack (0)