Quesada v. Herb Thyme Farms, Inc.; Does Federal or State Law Control Advertising a Product as “Organic”?
Whether consumers may bring a state court action against the grower of herbs for fraudulently labeling its products as “organic” was answered by the California Supreme Court on December 3, 2015 in a yet unpublished opinion in Quesada v. Herb Thyme Farms, Inc., No. S216305, Ct. App. No. 2/3 B239602. Dispelling the notion that the Organic Foods Production Act of 1990 (the “Act”) would preempt plaintiff, Michelle Quesada’s claims that Herb Thyme Farms, Inc. had violated the California Consumer Protection Act as well as its unfair competition laws and false advertising laws, the Court concluded that it did not. This decision has potentially far-reaching effects for the agricultural products produced in California because it paves the way for consumers to utilize California law, including its remedies, against producers of foods labeled as organic in violation of federal law.
In reaching its conclusion, the Court first examined the background of the use of the term “organic” in the production and sale of food in the United States, which reaches back into the 1940s, “not coincidentally the time when use of synthetic pesticides first became widespread.” (Watnick, The Organic Foods Production Act, the Process/Product Distinction, and a Case for More End Product Regulation in the Organic Foods Market (2014) 32 UCLA J. Envtl. L. & Pol‘y 40, 45 & fn. 20.)” Quesada at p. 4. From the 1940s until the 1970s, the organic food industry was little more than a niche which remained relatively unregulated. Because the industry was unregulated, even the term “organic” was difficult to define for the average consumer, and producers were sometimes able to take advantage of that market by labeling their products as “organic” to increase sales while providing ordinary products to the consumer. In the 1970s however, several states, including California, began regulating the industry. No two states, however, had the same laws to regulate the “organic” food industry, leading to consumer confusion and continued abuses by the sellers of “organic” products.
As a result of these inconsistencies, the Organic Foods Act (7 U.S.C. Section 6501, et seq.) (the “Act”) was passed in 1990. The Act “directs the establishment of national baseline standards for the production, labeling, and sale of organic products” Quesadaat p. 5, although it does not define the term “organic,” leaving that task to the United States Department of Agriculture (“USDA”). Under the Act and the rules promulgated by the USDA, products may only be labeled and sold as “organic” if they have been produced in accordance with an “organic plan” certified by either state or private certifying agent. Once a producer has been approved, their products may be labeled as “organic,” and the “official USDA Organic seal” may be used. Id. at 5-6.
After passage of the Act, California became the first state to have its program approved. Under the California Organic Products Act of 2003 (Food and Agr. Code Sections 46000-46029 and Health and Saf. Code 110810-110959) (the “California Act”) anyone can file a complaint alleging a grower’s noncompliance with the California Act, as the plaintiff did in Quesada. While the Act provides for civil fines of up to $10,000.00 and ineligibility for certification for a period of five years, the California Act, as well as the California Consumer Protection Act, California’s unfair competition laws and its false advertising laws may provide an aggrieved consumer with far more “teeth” to enforce the California Act, including, injunctive relief, enhanced monetary damages, and attorney’s fees.
If you are a producer of food products in California, you would be well advised to understand not only the Act but the California Act, as well as their consequences on your ability to label your product as “organic,” before it is marketed. Because of the complexities of these laws, and their interrelation, you need to obtain the advice of a knowledgeable, skilled attorney to help you understand what you must do before labeling your product as “organic.” Michael Leonard, Esq. of San Diego Corporate Law is the attorney you can trust to assist you with understanding these laws and how they apply to your business, as well as any of your business needs. To schedule a consultation with Mr. Leonard to discuss your registration needs, or any other business-related matter, you can contact him by e-mail or by telephone at (858) 483-9200.