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Reid v. Johnson & Johnson

United States Court of Appeals, Ninth Circuit

March 13, 2015

ROBERT REID, on Behalf of Himself and All Others Similarly Situated, Plaintiff-Appellant,
v.
JOHNSON & JOHNSON and MCNEIL NUTRITIONALS, LLC, Defendants-Appellees

Argued and Submitted, Pasadena, California June 5, 2014.

Page 953

[Copyrighted Material Omitted]

Page 954

Appeal from the United States District Court for the Southern District of California. D.C. No. 3:11-cv-01310-L-BLM. M. James Lorenz, Senior District Judge, Presiding.

SUMMARY[*]

Standing / Preemption

The panel affirmed in part, and reversed in part, the district court's decision dismissing a false advertising lawsuit brought against Johnson & Johnson and McNeil Nutritionals, LLC, concerning assertions McNeil made about its product Benecol, a substitute for butter or margarine.

McNeil declared on Benecol's label that the product contained " No Trans Fat" because the amount of trans fat in Benecol was so insignificant that it was authorized under the Food and Drug Administration's regulations to make that statement. McNeil also contended that Benecol satisfied the standards set forth in a 2003 FDA letter that authorized its plant stanol esters statements, and was entitled to preemptive effect.

The panel held that the plaintiff-appellant had standing to challenge McNeil's statements. The panel also held that appellant's state law claims for relief were not preempted. Specifically, the panel held that appellant's claims were not preempted to the extent they were predicated on McNeil's trans fat statements. In addition, the panel declined to afford preemptive effect to agency actions that did not carry the force of law under United States v. Mead Corp., 533 U.S. 218, 234, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001), and its progeny; and applying the rule, the panel held that the FDA's 2003 letter lacked preemptive effect. Finally, the panel held that appellant's action was not barred by the primary jurisdiction doctrine, which allows courts to stay proceedings or dismiss a complaint without prejudice pending resolution of an issue within the special competence of an administrative agency. The panel remanded for further proceedings.

Jack Fitzgerald (argued), Gregory S. Weston, and Melanie Persinger, The Weston Firm, San Diego, California; Ronald A. Marron and Beatrice Skye Resendes, The Law Offices of Ronald A. Marron, APLC, San Diego, California, for Plaintiff-Appellant.

Matthew I. Kaplan (argued), Mollie F. Benedict, and Amanda Villalobos, Tucker Ellis LLP, Los Angeles, California, for Defendants-Appellees.

Before: Alex Kozinski, Stephen S. Trott, and Consuelo M. Callahan, Circuit Judges.

OPINION

Page 955

CALLAHAN, Circuit Judge:

Robert Reid appeals the district court's decision dismissing his false advertising lawsuit against Johnson & Johnson and McNeil Nutritionals, LLC (collectively, " McNeil" ). Reid challenges a number of McNeil's assertions about its product, Benecol. Benecol is a vegetable oil-based spread that McNeil sells as a healthy substitute for butter or margarine. Among other things, on Benecol's label, McNeil prominently declares that the product contains " No Trans Fat" and contains plant stanol esters that lower cholesterol. Benecol, however, does contain trans fat. McNeil nonetheless contends that the amount of trans fat in the product is so insignificant that it is authorized under the Food and Drug Administration's (FDA) regulations to make the statement. It is also undisputed that Benecol does not comply with the terms of the FDA's regulation authorizing plant stanol ester-based health claims. McNeil contends that Benecol nonetheless satisfies the standards set forth in a 2003 FDA letter that authorizes its plant stanol esters statements and is entitled to preemptive effect.

The district court found that Reid lacked standing to challenge the statements and that Reid's claims for relief were preempted. However, the district court rejected McNeil's arguments that Reid's action was barred by the primary jurisdiction and abstention doctrines. We conclude that

Page 956

Reid has standing, that Reid's claims for relief are not preempted, and that Reid's action is not barred by the primary jurisdiction doctrine. Accordingly, we reverse the district court's standing and preemption decisions, affirm the district court's decision not to invoke the primary jurisdiction doctrine, and remand for further proceedings.

I

A

McNeil manufactures and sells Benecol.[1] Benecol is manufactured with partially hydrogenated vegetable oil, which contains artificial trans fat. According to Reid, " [a]rtificial trans fat does not exist in nature, and the human body has not evolved to digest it." It is " a toxic food additive that, in the amounts ...


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