Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: State law false ad claims remanded for not involving substantial federal question, (Oct 17, 2014)

By Jody Coultas, J.D.

The federal district court in San Jose, California remanded to state court consumers’ California false advertising claims against Bumble Bee Foods, LLC for lack of jurisdiction. The court also denied the consumers’ motion for attorney’s fees and costs (Garrett v. Bumble Bee Foods, LLC, October 16, 2014, Koh, L.).

The consumers claimed that Bumble Bee misbranded its products as an “Excellent Source of Omega 3” and as endorsed by the American Heart Association in violation of the California Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). After the consumers filed suit in Santa Clara County Superior Court, Bumble Bee was granted removal of the case to federal court.

Cases may be removed to federal court only if the federal court would have had subject matter jurisdiction over the case. Federal courts have jurisdiction over state law claims where the cases involve a federal issue that is substantial and where the court may hear the cases without disturbing the congressionally approved balance of federal and state judicial responsibilities

Because the court lacked jurisdiction over the claims, the court granted the consumers’ motion to remand. The federal Food, Drug, and Cosmetic Act (FDCA), which has been adopted by California law, provides the standards for evaluating Bumble Bee’s labeling claims. Because the food labeling standards set forth under the FDCA provide the basis for evaluating the consumers’ state law claims, the lawsuit raised a federal issue. However, the federal issue was not substantial and was contrary to Congressional intent. Congress had determined that there was no private right of action for FDCA violations.

In Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), the U.S. Supreme Court held that “the congressional determination that there should be no federal remedy for the violation of this federal statute is tantamount to a congressional conclusion that the presence of a claimed violation of the statute as an element of a state cause of action is insufficiently ‘substantial’ to confer federal-question jurisdiction,” Therefore, the court lacked jurisdiction over the state law claims because the case did not involve a substantial question of federal law, and hearing the case would conflict with Congressional intent.

The case is No. 5:14-cv-02546.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Patrick Garrett. Patrick Shaun Thompson (Goodwin Procter LLP) for Bumble Bee Foods, LLC.

Companies: Bumble Bee Foods, LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews