Ninth Circuit Allows Private Enforcement of FDCA Requirements Incorporated by California’s Sherman Law

Two years ago, in Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc., 48 F.4th 1040 (9th Cir. 2022), the Ninth Circuit held that the FDCA impliedly preempts private suits brought under state statutes that “rel[y] on the [FDCA], not traditional state tort law theory,” to define state-law requirements. We were so pleased with the Nexus decision that we designated it one of our top-ten decisions in 2022. At the time, we thought that defendants could use Nexus to win dismissal of “much, if not all, of the economic-loss food litigation” brought under California’s Sherman Law—a statute that incorporates by reference the food-labeling requirements adopted under the FDCA.

Alas, our optimism may have been premature.

Last week, in Davidson v. Sprout Foods, Inc., — F.4th —-, 2024 WL 3213277 (9th Cir. 2024), a divided Ninth Circuit panel reversed a trial court decision we had applauded and held that the FDCA does not impliedly preempt food-labeling claims brought under California’s Sherman Law. As the dissenting judge explained, the majority opinion is contrary to Nexus and, more fundamentally, to 21 U.S.C. § 337(a) as construed in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).

Section 337(a) states that, subject to certain exceptions, all actions to enforce the Food, Drug, and Cosmetic Act “shall be by and in the name of the United States.” This provision, said the Supreme Court, “leaves no doubt that,” as a general matter, “it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the [FDCA’s] provisions.” Buckman, 531 U.S. at 349 n.4.

Under Buckman, whether a particular state-law claim is impliedly preempted by § 337(a) depends on the origin of the duty that the claim seeks to enforce. Private claims that seek to enforce duties that “exist solely by virtue of the FDCA” are preempted, while claims that rely exclusively “on traditional state tort law which … predate[s]” the FDCA are not. Buckman, 531 U.S. at 352–53.

Despite acknowledging that the food-labeling requirements imposed by California’s Sherman Law are, by definition, the requirements established by the FDCA, the Davidson majority held that § 337(a) does not preempt private suits to enforce those requirements because, it said, “plaintiffs are claiming violations of California law, the Sherman Law, not the federal FDCA.” 2024 WL 3213277, at *6. According to the majority, § 337(a) has no bearing on private actions to enforce California’s Sherman Law because it “addresses only enforcement of the federal law.” Id. at *7.

In the eyes of the Davidson majority, it would make no sense to hold private Sherman Law claims impliedly preempted when a provision of the FDCA—namely, the express-preemption clause of the Nutrition Labeling and Education Act (NLEA)—allows states to adopt food-labeling requirements “identical” to those adopted under the NLEA. 21 U.S.C. § 343-1(a). There is, the majority said, “no reason … why Congress would permit states to enact particular legislation and then deny enforcement by their citizens.” Davidson, 2024 WL 3213277, at *6.

But, as the dissent notes, that logic suffers from several flaws.

First, “the majority’s reasoning wrongly equates the scope of the FDCA’s express preemption with the scope of its implied preemption.” Davidson, 2024 WL 3213277, at *16 (Collins, J., concurring in part and dissenting in part). Buckman “held that the plaintiffs’ … claims were impliedly preempted without regard to whether the alleged state-law duty on which they rested was expressly preempted by the FDCA.” Id. Thus, “the crucial question remains whether private enforcement of the non-expressly-preempted state statute is impliedly preempted due to the fact that the state cause of action, as in Buckman and Nexus, parasitically relies on the FDCA.” Id. at *17. “By wrongly equating express preemption and implied preemption here, the majority’s opinion simply begs that critical question and thus provides no answer to it.” Id.

Second, “the majority’s rhetorical question—why would Congress ‘permit states to enact particular legislation and then deny enforcement by their citizens[?]’—has an obvious answer.” Davidson, 2024 WL 3213277, at *17 (Collins, J., concurring in part and dissenting in part). Although 21 U.S.C. § 337(a) gives the federal government exclusive authority to enforce most provisions of the FDCA, § 337(b) creates an exception that allows states to enforce select provisions, including the food-labeling requirements adopted pursuant to 21 U.S.C. § 343(r). Notably, however, § 337(b)(1) allows only a “State” to bring such an enforcement action and only “in its own name.” There is, therefore, nothing “anomalous” in limiting the enforcement of identical state-law labeling requirements to “the same public enforcement mechanisms.” Davidson, 2024 WL 3213277, at *17.

Third, the majority’s holding is contrary to congressional intent. “Had it wanted to do so, Congress could have added private enforcement authority to the new food-labeling provisions, but it did not.” Davidson, 2024 WL 3213277, at *18 (Collins, J., concurring in part and dissenting in part). In allowing private actions to enforce requirements taken directly from the FDCA’s food-labeling requirements, Davidson permits “precisely the private enforcement remedy that Congress deliberately withheld when it enacted the NLEA.” Id.

We hope that Judge Collins’ forceful dissent leads the Ninth Circuit to reconsider Davidson en banc. The prerequisites for en banc review are present: the panel decision, which implicates an important statutory question, conflicts with not only prior Ninth Circuit precedent but also Buckman, which squarely held that the FDCA impliedly preempts any state-law claim that—like a claim under California’s Sherman Law—“exists solely by virtue of the FDCA.” 531 U.S. at 353.