Christina Webb v. Trader Joe's Company ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHRISTINA WEBB, on behalf of No. 19-56389
herself, all others similarly situated,
and the general public, D.C. No.
Plaintiff-Appellant, 3:19-cv-01587-
CAB-WVG
v.
TRADER JOE’S COMPANY, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of California
Cathy Ann Bencivengo, District Judge, Presiding
Argued and Submitted April 16, 2021
Pasadena, California
Filed June 4, 2021
Before: Richard A. Paez and Lawrence VanDyke, Circuit
Judges, and Edward R. Korman, * District Judge.
Opinion by Judge VanDyke
*
The Honorable Edward R. Korman, United States District Judge
for the Eastern District of New York, sitting by designation.
2 WEBB V. TRADER JOE’S
SUMMARY **
Federal Preemption
The panel affirmed the district court’s dismissal, as
federally preempted, of plaintiff’s state-law based claims
arguing that Trader Joe’s Company’s federally regulated
retained water labels on poultry products were misleading.
The federal Poultry Products Inspection Act (“PPIA”)
regulates the retained water data collection process and label
production for covered poultry products. Under the PPIA,
Trader Joe’s was required to maintain its retained water data
collection protocol on file and make it available to the Food
Safety and Inspection Service (“FSIS”) for review. The
plaintiff argued that she used a data collection protocol that
produced different percentages of retained water than those
displayed on Trader Joe’s poultry labels, and thus Trader
Joe’s labels were misleading in violation of state law.
Federal law expressly preempts claims relating to
regulated labels that would impose requirements “in addition
to, or different than those” already required by federal law.
21 U.S.C. § 467e. The panel held that plaintiff’s state law
claims were preempted because they sought to impose the
requirements of plaintiff’s retained water protocol in
addition to Trader Joe’s FSIS-required protocol. Further, the
panel affirmed the district court’s dismissal with prejudice
because plaintiff’s counsel confirmed that plaintiff could not
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
WEBB V. TRADER JOE’S 3
assert that her data collection protocol was the same as that
used by Trader Joe’s.
COUNSEL
Michael T. Houchin (argued), Ronald A. Marron, and Lilach
Halperin, Law Offices of Ronald A. Marron APLC, San
Diego, California, for Plaintiff-Appellant.
Angel A. Garganta (argued), Tyler G. Welti, and Amit Rana,
Venable LLP, San Francisco, California, for Defendant-
Appellee.
OPINION
VANDYKE, Circuit Judge:
This case requires us to determine whether an individual
is preempted from bringing state law-based claims arguing
that a company’s federally regulated retained water labels on
poultry products are misleading. Plaintiff Christina Webb
argues that she used a data collection protocol that produced
different percentages of retained water than those displayed
on Trader Joe’s poultry labels, and thus Trader Joe’s labels
are misleading in violation of state law. We conclude that
Webb’s claims are preempted by federal law regulating
poultry labeling and retained water measurement protocols.
See 21 U.S.C. § 467e.
Webb purchased “All Natural Boneless Chicken
Breasts,” “All Natural Chicken Thighs,” and “All Natural
Chicken Wings,” (the Products) from various Trader Joe’s
locations. The Products were each marked with a label
4 WEBB V. TRADER JOE’S
stating that they contained “[u]p to 5% retained water.”
Webb had the Products examined by a food testing lab,
which concluded that the Products contained more retained
water than claimed by Trader Joe’s labels.
The federal Poultry Products Inspection Act (PPIA)
regulates the retained water data collection process and label
production for covered poultry products. Under the PPIA,
Trader Joe’s was required to maintain its retained water data
collection protocol on file and make it available to the Food
Safety and Inspection Service (FSIS) for review. FSIS could
require changes to the protocol within 30 days of receiving
notice of a new or revised protocol. 9 C.F.R. § 441.10(c).
The retained water claims on the Products’ labels were also
inspected by FSIS because the generic retained water claims
were affixed alongside special statements and were
“required to [be] submit[ed] for evaluation.” Prior Label
Approval System: Generic Label Approval, 78 Fed. Reg.
66826-01, 66827 (Nov. 7, 2013).
Federal law expressly preempts claims relating to
regulated labels that would impose requirements “in addition
to, or different than those” already required by federal law.
21 U.S.C. § 467e. Because Webb’s state law claims seek to
impose the requirements of her retained water protocol in
addition to Trader Joe’s FSIS-required protocol, her claims
are preempted. See id. And because Webb’s counsel
confirmed at oral argument that she cannot assert that her
data collection protocol is the same as that used by Trader
Joe’s, we affirm the district court’s dismissal with prejudice
WEBB V. TRADER JOE’S 5
I. Facts
A. Webb’s Testing
Webb purchased multiple Trader Joe’s Products from
various stores in the San Francisco area over the course of
several months. The Products “declare[d] a maximum of 5%
Retained Water.” Webb took the Products to a San
Francisco food testing laboratory to determine whether the
Products’ labels correctly reflected the retained water
content. The laboratory’s testing concluded that the
Products in fact “contained, on average, 9% Retained
Water.” Based on this difference, Webb filed a lawsuit
alleging that “Trader Joe’s Chicken Products . . . include[d]
unlawfully large amounts of Retained Water . . . caus[ing]
consumers to pay more for economically adulterated and
misbranded products.” But she failed to specify whether the
retained water process utilized in her independent
examination of the Products was identical to the protocol
utilized by Trader Joe’s pursuant to regulation. Her putative
class action against Trader Joe’s alleges violations of
(1) California’s Consumers Legal Remedies Act;
(2) California’s Unfair Competition Law; and
(3) California’s False Advertising Law; and causes of action
for (4) Breach of Express Warranties; (5) Breach of Implied
Warranties; (6) Theft by False Pretenses; and (7) Unjust
Enrichment.
B. The Federal Law Background
Poultry labels are federally regulated under the PPIA.
Congress enacted the PPIA, codified at 21 U.S.C. § 451,
empowering the Secretary of Agriculture to ensure that
“poultry products . . . are . . . not adulterated, and properly
marked [and] labeled.” The Secretary delegated authority to
6 WEBB V. TRADER JOE’S
the Administrator of FSIS to oversee the labeling of poultry
products. 9 C.F.R. § 300.2(a).
In order to produce poultry products containing any
amount of retained water, a covered poultry producer like
Trader Joe’s must “maintain on file and make available to
FSIS its written data-collection protocol” for how the
company arrived at the claimed retained water percentage.
Id. § 441.10(c)(1). FSIS reviews the protocol from the
poultry producer and “may object to or require the
establishment to make changes in the protocol.” Id.
§ 441.10(c)(2). 1 While this does not constitute “pre-
approval of [such] protocols,” FSIS does require that any
company using labels with retained-water data “notify
[FSIS] as soon as the protocol [to measure the retained
water] is available for review” and FSIS will “object to or
require changes” as necessary within 30 days of receipt of
the protocol. Retained Water in Raw Meat and Poultry
Products; Poultry Chilling Requirements, 66 Fed. Reg.
1750-01, 1755 (Jan. 9, 2001). This review allows FSIS to
validate that “the protocols are scientifically valid, that the
data collected under them will reflect water-retention
amounts that are unavoidable, and that the data support the
1
While, as noted above, the agency’s regulations only require that
the data collection protocol be “made available” to the agency—thereby
maximizing the agency’s flexibility—as a practical matter it appears that
FSIS typically requires that regulated entities actually submit their
protocols to the agency. FSIS Directive 6700.1, Retained Water in Raw
Meat and Poultry Products 4 (U.S.D.A. 2002), https://www.fsis.usda.go
v/sites/default/files/media_file/2020-07/6700.1.pdf. But for preemption
purposes, it is sufficient that the regulations require that the protocol be
made available to the FSIS and that FSIS decided not to require changes
to that protocol.
WEBB V. TRADER JOE’S 7
water-retention statements on product labeling.” Id. at 1756(emphasis added).
Labels making retained water statements are generically
approved, meaning they “may be used without being
submitted to [FSIS] for approval provided that they show all
mandatory features and are not false or misleading.” Id. at
1755. Such labels may still be “spot checked” by FSIS
through “in-plant labeling verification activities [of
generically approved labels], such as verifying that all
ingredients are appropriately declared on labeling.” Prior
Label Approval System: Generic Label Approval, 78 Fed.
Reg. at 66832.
But where a poultry label has “special statements,”
meaning statements “not defined in the Federal . . .
regulations or the [FSIS] . . . Policy Book,” 9 C.F.R.
§ 412.1(e), the label must be “presented in the context of a
final label,” id. at § 412.1(c)(3), and “submitted for
approval” by FSIS staff, id. § 412.1(b). “Special statements
and claims” include “health claims, ingredient and
processing method claims,” and “claims regarding the
raising of animals.” Id. § 412.1(e).
Trader Joe’s poultry labels at issue in this case include
both generic retained water claims and special statements,
including “no antibiotics ever,” “no added hormones,” and
“all vegetarian fed.” When special statements are included
in conjunction with claims that are normally generically
approved, “[a]s a result of its decision to continue providing
for the review of all labels, FSIS . . . has not revised the
regulatory text to state that [it] will review only the special
statement . . . and not the rest of the submitted label.” Prior
Label Approval System: Generic Label Approval, 78 Fed.
Reg. at 66829 (emphasis added). Once “inspected and
passed,” the U.S. Department of Agriculture affixes an
8 WEBB V. TRADER JOE’S
“official inspection legend” on the label. 9 C.F.R. § 381.96.
To receive such a mark, the inspector must have “on file
evidence that such device has been approved in accordance
with the provisions of this subpart.” Id. § 381.137.
II. Procedural History
Webb filed this putative class action in San Diego
Superior Court, and Trader Joe’s removed the case to federal
district court. Trader Joe’s then filed a Rule 12(c) motion
for judgment on the pleadings, and the district court
“analyze[d] the language of the [PPIA] statute and the
overall statutory scheme,” to determine if Webb’s claims
were preempted. The district court examined the PPIA and
noted that it “prohibit[ed] the sale of products with false or
misleading labeling” and that FSIS “inspects and approves
product labels . . . . before products bearing that label are
sold in interstate commerce.” The district court also
observed that Trader Joe’s must “maintain on file and
available to FSIS its written data-collection protocol which
must explain how data will be collected and used to
demonstrate the amount of retained water in the product,”
and “FSIS may object to or require . . . changes in the
protocol.”
The district court concluded that because Trader Joe’s
“fully complied with the federal requirements to make the
‘Up to 5% Retained Water’ claim on its labels,” claiming
those products are mislabeled in violation of state law
“would necessarily require additional requirements that are
not equivalent to the PPIA.” Because “preapproval of labels
must be given preemptive effect,” the court concluded
“Plaintiff’s state law claims are expressly preempted under
the PPIA” and dismissed Webb’s complaint with prejudice.
Webb timely appealed.
WEBB V. TRADER JOE’S 9
DISCUSSION
We have jurisdiction under 28 U.S.C. § 1291 and
“review de novo a dismissal by judgment on the pleadings
under Rule 12(c).” McGlinchy v. Shell Chem. Co., 845 F.2d
802, 810 (9th Cir. 1988). Because motions for judgment on
the pleadings are “‘functionally identical’ to Rule 12(b)(6)”
motions, United States ex rel. Cafasso v. Gen. Dynamics C4
Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (citation
omitted), when ruling on either type of motion “courts must
consider the complaint in its entirety, as well as other sources
. . . , in particular, documents incorporated into the
complaint by reference, and matters of which a court may
take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007).
This case requires the court to determine whether
Webb’s claims are preempted under 21 U.S.C. § 467e,
which establishes that states may not impose requirements
“in addition to, or different than those” described in the
PPIA. “Where the intent of a statutory provision that speaks
expressly to the question of preemption is at issue, ‘we do
not invoke any presumption against pre-emption but instead
focus on the plain wording of the clause, which necessarily
contains the best evidence of Congress’ pre-emptive
intent.’” Atay v. County of Maui, 842 F.3d 688, 699 (9th Cir.
2016) (quoting Puerto Rico v. Franklin Cal. Tax-Free Tr.,
136 S. Ct. 1938, 1946 (2016)).
Here, Webb’s claims are preempted for two reasons:
First, allowing Webb to impose her retained water protocol
on Trader Joe’s via state law would require Trader Joe’s to
conform to a different data collection process than the
protocol that was properly developed and made available to
FSIS for review as required by federal law. Second,
requiring Trader Joe’s to change its labeling to be consistent
10 WEBB V. TRADER JOE’S
with Webb’s retained water data would require changes to
poultry labels that were approved by FSIS. Because Webb’s
state law claims seek to impose requirements “in addition to”
those outlined in the PPIA, her claims are preempted. 2
I. FSIS Did Not Object to Trader Joe’s Retained Water
Data Collection Protocol, Expressly Preempting
Webb’s Claims.
Webb attempts to avoid federal preemption by arguing
that because Trader Joe’s based the Products’ labels on
information that was not preapproved by FSIS, she can bring
her state law claims that would concurrently enforce the
PPIA without imposing additional “requirements” on Trader
Joe’s. She also argues that the district court’s determination
that the data reflected on the label was preapproved
incorrectly assumed a disputed issue of fact in favor of
Trader Joe’s, the moving party.
Webb’s claims cannot be reconciled with the federal
regulatory scheme. That scheme requires Trader Joe’s to
make its poultry retained water data collection protocol
available to FSIS, which “may object to or require changes”
as necessary within 30 days of receipt of notice that the
protocol is available. 9 C.F.R. § 441.10(c)(1); Retained
Water in Raw Meat and Poultry Products; Poultry Chilling
Requirements, 66 Fed. Reg. at 1755. This constitutes federal
approval of Trader Joe’s protocol because one purpose of
FSIS’s regulatory opportunity to review is to confirm “that
the data support the water-retention statements on product
2
Because Webb cannot allege her retained water data collection
process is the same as the one used by Trader Joe’s, we do not reach the
issue of whether her state law claims are an improper attempt to privately
enforce 21 U.S.C. § 467e.
WEBB V. TRADER JOE’S 11
labeling.” Id. at 1756. The district court was correct that
because FSIS allowed Trader Joe’s products to be “placed
for sale [it] lends to the conclusion that no such objection or
request [for changes in the protocol] was made.” 3 The
federal regulatory process here allows for review of a
company’s water retention data collection protocol before
their poultry products enter commerce, and FSIS’s decision
not to object or otherwise require changes operates as federal
approval of that protocol.
Because the retained water data supporting the claims
made on the Products’ labels were validated by federal
regulators according to the federally proscribed method,
Webb’s claims that Trader Joe’s Products’ labels are in fact
invalid and misbranded are federally preempted. Cf. Nat’l
Meat Ass’n v. Harris, 565 U.S. 452, 459–60 (2012) (“The
FMIA’s preemption clause sweeps widely—and in so doing,
blocks the applications of [the California state statute which]
3
This court may take judicial notice of a federal agency’s
interpretation of its own preemption provisions in an amicus brief. See
Riegel v. Medtronic, Inc., 552 U.S. 312, 328 (2008) (citing the FDA’s
regulatory interpretation provided in an amicus brief). We thus take
judicial notice that the USDA explained in an amicus brief in a similar
case that “FSIS’s decision to approve a label and to allow it to be affixed
to products sold in commerce . . . embodies a determination that the label
does not violate the labeling requirements under the PPIA or its
implementing regulations.” Br. for United States as Amicus Curiae
Supporting Appellees, La Vigne v. Costco Wholesale Corp., 772 Fed.
App’x 4 (2nd Cir. 2019) (No. 18-415) 2019 WL 1723825 at *12; see also
La Vigne v. Costco Wholesale Corp., 284 F. Supp. 3d 496, 505 (S.D.N.Y.
2018), aff’d, 772 F. App’x 4 (2d Cir. 2019) (determining that “the Court
may presume that the Kirkland Canned Chicken label at issue was
approved by the FSIS” because it required pre-approval and was used in
commerce). Contrary to Webb’s argument, this is not a disputed issue
of fact, but rather an indisputable characteristic of how the federal
regulatory scheme functions. The district court did not draw inferences
in Trader Joe’s favor—it correctly interpreted the statutory scheme.
12 WEBB V. TRADER JOE’S
. . . . compels [swine slaughterhouses] to deal with
nonambulatory pigs on their premises in ways that the
federal Act and regulations do not.”); Jones v. Rath Packing
Co., 430 U.S. 519, 531–32 (1977) (“Thus, the state law’s
requirement . . . is ‘different than’ the federal requirement,
which permits manufacturing deviations and variations . . . .
[Plaintiff’s] packaged bacon [claims] . . . are pre-empted by
federal law.”); see also Marentette v. Abbott Lab’ys, Inc.,
886 F.3d 112, 118 (2d Cir. 2018) (“We agree with the district
court . . . and therefore conclude that Parents’ [misleading
dairy product label] claims are preempted. There is simply
no way to rule in Parents’ favor without contradicting the
certification decision, and, through it, the certification
scheme that Congress enacted in the OFPA.”). 4 The federal
regulatory scheme is permissive and allows a broad method
of compliance, in that it allows the company to craft its own
data collection process and make it available for FSIS
review. Requiring Trader Joe’s to follow Webb’s process,
or be penalized unless it follows a process different from the
4
All of Webb’s state law claims are preempted, including her
warranty claims. Because “FSIS’s . . . regulations dictate how a . . .
claim can be stated on a label and the basis for making such a claim,
Plaintiff’s breach of express warranty claims that contradict the FSIS’s
nutrition labeling regulations are preempted.” Kuenzig v. Kraft Foods,
Inc., No. 8:11-cv-838-T-24 TGW, 2011 WL 4031141, at *7 (M.D. Fla.
Sep. 12, 2011) (distinguishing Bates v. Dow Agrosciences LLC, 544 U.S.
431, 440–47 (2005), because the Supreme Court in Bates found the
federal statute at issue was not sufficiently comprehensive to preempt the
plaintiffs’ state and common law claims, while the PPIA includes
specific requirements for “how” a producer makes claims and the “basis
for making [those label] claims,” such that express warranty claims “are
preempted”). The Supreme Court has emphasized that it has “likewise
held that a provision pre-empting state ‘requirements’ pre-empted
common-law duties,” and declined to adopt plaintiffs’ contention that
“implied-warranty claims are not pre-empted.” Riegel, 552 U.S. at 324,
327.
WEBB V. TRADER JOE’S 13
one it developed pursuant to regulation, would be more
restrictive than the federal scheme governing Trader Joe’s
poultry retained water data collection and labeling.
Webb acknowledges that her suit “would . . . be
preempted if this Court finds that this lawsuit seeks to
impose requirements on Defendant that are in addition to or
different from the requirements imposed by the PPIA.”
There is no escaping the conclusion that this is precisely
what Webb’s state law claims, if allowed to proceed, would
do. Because her claim that Trader Joe’s incorrectly labeled
the Products would necessarily impose a data collection
protocol different from, or in addition to, that required in the
statute and regulations implementing the PPIA, her claims
are preempted.
II. FSIS Reviewed Trader Joe’s Labels, Expressly
Preempting Webb’s Claims.
The district court also noted that the labels were
“review[ed] . . . for approval in their entirety,” as a specific
inspection mark on the label demonstrated the Products had
passed federal inspection. See 9 C.F.R. § 381.96. Webb
argues that the labels’ retained water claims are generic and
thus were not preapproved. But when a poultry label
includes special statements in addition to general statements,
FSIS reviews the entirety of the label. Prior Label Approval
System: Generic Label Approval, 78 Fed. Reg. at 66829.
Trader Joe’s labels include three such “special statements”:
(1) “no antibiotics ever,” (2) “no added hormones,” and
(3) “all vegetarian fed.” Thus, under the applicable federal
regulatory scheme, FSIS inspected both the generic retained
water claims and the special statements regarding the health
and animal raising claims. Id. (“FSIS . . . has not revised the
regulatory text to state that the Agency will review only the
special statement or claim, and not the rest of the submitted
14 WEBB V. TRADER JOE’S
label, unless otherwise requested.”). The district court took
judicial notice of the labels, and properly considered the
inspection of the labels as part of the preemption analysis,
and we agree that the retained water statement on the label
was federally approved. 5 Any additional label requirements
Webb seeks to place on Trader Joe’s through the application
of her retained water data would necessarily be “different
than” those required by the PPIA, and her claims are thus
preempted. 21 U.S.C. § 467e.
III. The District Court did not Abuse its Discretion by
Dismissing with Prejudice.
“Dismissal with prejudice and without leave to amend is
not appropriate unless it is clear on de novo review that the
complaint could not be saved by amendment.” Eminence
Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.
2003) (per curiam). Here, Webb claims there is a “narrow
gap” through which her claims survive: she is “suing for
conduct that violates” the PPIA but not “because the conduct
violates” the PPIA (rather, because it violates applicable
state law), so her claims are not preempted. Perez v. Nidek
Co., 711 F.3d 1109, 1120 (9th Cir. 2013) (citation omitted).
But, as discussed, federal law does not allow Webb to
impose a different data collection protocol on Trader Joe’s.
So the only possible “narrow gap” where Webb’s claims
might not be preempted would be if she could plausibly
claim she used Trader Joe’s exact data collection protocol
Webb’s argument that “the Products could become adulterated and
5
therefore fail to conform to those label claims at any later time” after
FSIS inspection, raises a new argument not developed in the opening
brief or the court below. This argument is waived and we therefore do
not address it. See Lopez v. Pac. Mar. Ass’n, 657 F.3d 762, 766–67 (9th
Cir. 2011).
WEBB V. TRADER JOE’S 15
and yet obtained different results, thereby evincing that
Trader Joe’s is misrepresenting its data to FSIS.
But at oral argument Webb’s counsel was unable to
confirm that Webb used Trader Joe’s protocol to arrive at
her retained water numbers, or that the protocol made
available to FSIS is even publicly accessible. Webb thus
cannot amend her complaint to claim that her retained water
data collection protocol was the same as Trader Joe’s
protocol without first getting information from Trader Joe’s
itself. We cannot “condone the use of discovery to engage
in ‘fishing expedition[s]’” where, like here, it is obvious that
Webb has no basis other than gross speculation to claim that
Trader Joe’s is misrepresenting the data provided by its
testing protocol. Rivera v. NIBCO, Inc., 364 F.3d 1057,
1072 (9th Cir. 2004) (citation omitted). We accordingly
affirm the district court’s dismissal with prejudice.
CONCLUSION
The PPIA preempts state law claims that would impose
additional requirements on covered poultry producers.
Trader Joe’s label—including its retained water statement—
was approved by federal regulators. And Webb has not
alleged, nor can she allege, that her data collection protocol
is the same as the process Trader Joe’s made available for
federal government review. So requiring labeling in
conformance with Webb’s testing protocol would
necessarily impose requirements beyond those required by
federal law. Her claims are therefore preempted under
§ 467e, and she cannot amend her complaint to avoid
preemption. The district court did not err in dismissing her
claims with prejudice.
AFFIRMED.