Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—9th Cir.: Manufacturer of sunflower seeds must disclose sodium content of flavor coatings, (Feb 24, 2014)

By Trin Legaspi, JD, LLM

The Ninth Circuit held that a manufacturer of sunflower seeds, ConAgra Foods Inc. (ConAgra) must include the sodium content of the edible coating added on the shells of the sunflower seeds in the nutritional information section of the product’s package. Aleta Lilly (Lilly) filed a class action suit under California state law alleging that ConAgra’s nutrition label misrepresents the sodium content of the sunflower seeds by focusing only on the sunflower kernels. Accordingly, the court reversed the motion to dismiss granted by the district court to ConAgra (Lilly v ConAgra Foods Inc., February 20, 2014, Silverman, B).

Analysis. The flavor coatings placed on the shells of the sunflower seeds are intended to be consumed. The court held that ConAgra’s argument that Lilly’s lawsuit was an attempt to force it into including the sodium content of the inedible “shell” of the sunflower seeds ignored the fact that the coatings placed on the shells to give them flavor were intended to be consumed and part of the sunflower seed eating experience. The court noted that this is supported by the fact the coatings come in various flavors such as “Ranch” and “Nacho Cheese” which indicates they are meant to be savored before the shell is discarded.

The court held that, since it determined the flavor coatings on the sunflower seed shells were edible, pursuant to 21 CFR sec. 101.9(a)(6), the sodium content in the flavor coatings must be included in the sodium portion of the nutritional label of the products package. Further, the court held that, since California state law labeling requirements are no different than federal law, they were not preempted.

Dismissal of Lilly’s causes of action under three California statutes—the Consumer Legal Remedies Act, the False Advertising Laws, and the Unfair Competition Law—on preemption grounds was reversed.

Dissenting opinion. Judge C. Roger Vinson dissented arguing that 21 C.F.R. sec. 101.12(a)(6) plainly states that the amount of sodium for food labeling purposes is “based on only the edible portion of food, and not bone, seed, shell, or other inedible components.” He noted that it is undisputed that the sunflower seed shells were inedible; therefore, he believed the district court correctly concluded that Lilly’s attempt to require ConAgra to use different labeling in California was expressly preempted by the Nutrition Labeling and Education Act. Judge Vinson stated that it is the FDA’s duty to draft regulations and if it wanted to distinguish between an edible coating and an inedible shell it is their right; however, courts should not be the regulation-writing business.

The case number is 12-55921.

Attorneys: Rosemary M. Rivas (Finkelstein Thompson LLP) for Aleta Lilly. Patrick Edgar Brookhouser, Jr. (McGrath North Mullen & Kratz) and Alice L. Chen (Yoka & Smith, LLP) for ConAgra Foods, Inc.

Companies: ConAgra Foods, Inc.

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