Robert Reid v. Johnson & Johnson , 780 F.3d 952 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROBERT REID, on Behalf of Himself No. 12-56726
and All Others Similarly Situated,
Plaintiff-Appellant, D.C. No.
3:11-cv-01310-
v. L-BLM
JOHNSON & JOHNSON and MCNEIL
NUTRITIONALS, LLC, OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
M. James Lorenz, Senior District Judge, Presiding
Argued and Submitted
June 5, 2014—Pasadena, California
Filed March 13, 2015
Before: Alex Kozinski, Stephen S. Trott,
and Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Callahan
2 REID V. JOHNSON & JOHNSON
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 (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
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
REID V. JOHNSON & JOHNSON 3
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.
COUNSEL
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.
OPINION
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
4 REID V. JOHNSON & JOHNSON
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 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,
1
The facts are drawn from Reid’s complaint. See Salameh v. Tarsadia
Hotel, 726 F.3d 1124, 1128 (9th Cir. 2013) (“Because the district court
dismissed the complaint on the pleadings, the facts come from the second
amended complaint, except where otherwise noted.”), cert. denied, 134 S.
Ct. 1322 (2014).
REID V. JOHNSON & JOHNSON 5
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 present in Benecol, negatively affects
blood cholesterol levels.”
Low density lipoprotein (“LDL”), or “bad” cholesterol,
carries cholesterol to arteries and tissues. High density
lipoprotein (“HDL”), or “good” cholesterol, “takes
cholesterol away from tissues to the liver, where it is removed
from the body.” High levels of LDL cholesterol and low
levels of HDL cholesterol are associated with an increased
risk of heart disease. The consumption of artificial trans fat
“increases ‘bad’ LDL cholesterol and decreases ‘good’ HDL
cholesterol.” Consequently, consuming partially
hydrogenated vegetable oil “causes cardiovascular [] disease,
diabetes and cancer.”
Benecol also contains plant stanol esters. Consuming
plant stanols has been shown to reduce LDL cholesterol and
thus the risk of heart disease. According to Reid, the partially
hydrogenated vegetable oil in Benecol counteracts any
positive effect associated with plant stanol esters in the
product.
The outside packaging for Benecol includes the following
statements:
• “Proven to Reduce Cholesterol”
• “No Trans Fat”
• “No Trans Fatty Acids”
6 REID V. JOHNSON & JOHNSON
• “Use at least 2 servings of spread per day
with your meals and snacks. Each serving
contains 0.85 g of Plant Stanol Esters (0.5
g plant stanols). BENECOL® Spreads
can help you meet the National
Cholesterol Education Program
Guidelines recommended amount of 2 g
plant stanols/sterols per day.”
• “Plant Stanol Esters, the unique ingredient
found only in BENECOL® Spreads, are
derived from natural plant components
found in vegetable oils such as soy. Plant
Stanol Esters [sic] proven ability to lower
cholesterol is supported by over 25
studies, including one reported in the New
England Journal of Medicine.”
• “Products containing 0.7 g or more of
Plant Stanol Esters per serving eaten twice
a day with meals for a daily intake of at
least 1.4 g may reduce the risk of heart
disease as part of a diet low in saturated
fat and cholesterol. A serving of
BENECOL® spread contains 0.85 g of
Plant Stanol Esters.”
The outer packing depicts several heart icons, and the
packaging for Benecol Light spread also depicts vegetables.
The interior packaging, which a consumer would not see
unless he or she opened the package (presumably, after
purchasing it), further states:
REID V. JOHNSON & JOHNSON 7
The name BENECOL® brings together Bene,
meaning “good” and col, for “cholesterol”.
BENECOL® offers you a great way to reduce
your cholesterol with a delightfully good-
tasting spread. Did you know that 2 or more
servings of BENECOL® Spreads each day:
TReduces “bad” (LDL) cholesterol
TReduces total cholesterol
TWorks to further reduce cholesterol for
those on cholesterol—lowering statin
medications
TBlocks cholesterol from being absorbed into
your body
It also explains:
How can BENECOL® Spreads have 0 grams
trans fat if they contain partially hydrogenated
oils?
A small amount of partially hydrogenated oils
are used in BENECOL® Spreads to maintain
a semi-solid structure and to enhance the
melting characteristics of the BENECOL®
Regular Spread. As a result, BENECOL®
Spreads[] contain an extremely low level of
trans fat. The FDA allows foods containing
less than 0.5 grams of trans fat/serving to be
labeled 0 grams trans fat, since this is
considered an insignificant amount.
8 REID V. JOHNSON & JOHNSON
Reid contends that he is a lay consumer with no
background in nutrition or food science. He purchased
Benecol at three different stores in California over a period of
more than three years prior to filing the complaint. He asserts
that he did so based on McNeil’s representations in its
advertisements and on its packaging. Benecol costs more
than similar products, and Reid contends that he would not
have been willing to pay as much as he did—if anything at
all—for Benecol had he not been misled.
B
Reid filed his complaint on June 14, 2011. He alleged
that McNeil’s plant stanol esters-based health and “No Trans
Fat” claims were not authorized under the FDA’s regulations
and were false. He further asserted that the “Proven to
Reduce Cholesterol” and related statements were false and
misleading and rendered Benecol an improperly marketed
drug. He also contended that McNeil created Benecol’s name
and used heart graphics and vegetable depictions to reinforce
its deceptive statements and to convey misleading
information about Benecol’s health benefits. He asserted
claims for relief on behalf of a putative class of Benecol
purchasers under California’s Unfair Competition Law
(“UCL”), Cal. Bus. & Prof. Code §§ 17200–10; False
Advertising Law (“FAL”), Cal. Bus. & Prof. Code
§§ 17500–09; and Consumer Legal Remedies Act (“CLRA”),
Cal. Civ. Code §§ 1750–84.
The district court granted McNeil’s motion to dismiss.
Initially, the district court decided that Reid had sufficiently
alleged an economic injury, but lacked standing because he
failed to plead reasonable reliance on any misrepresentations.
The district court further concluded that Reid’s claims for
REID V. JOHNSON & JOHNSON 9
relief were preempted under federal law. It held that
McNeil’s plant stanol esters statements complied with a 2003
FDA letter where the agency discussed its intentions about
enforcing certain requirements for health claims about plant
stanol esters, and it found that McNeil’s cholesterol reduction
and trans fat statements complied with FDA regulations. The
court rejected McNeil’s arguments that it should stay or
dismiss the case under the primary jurisdiction or abstention
doctrines. It also denied Reid’s request to take judicial notice
of a number of FDA warning letters. Reid appealed and we
have jurisdiction pursuant to 28 U.S.C. § 1291.
II
We review de novo a district court’s order granting a
motion to dismiss on preemption grounds, for lack of
standing, or for failure to state a claim upon which relief can
be granted. Lily v. ConAgra Foods, Inc., 743 F.3d 662, 664
(9th Cir. 2014) (preemption); Mont. Shooting Sports Ass’n v.
Holder, 727 F.3d 975, 979 (9th Cir. 2013) (standing), cert.
denied, 134 S. Ct. 955 (2014); Henry A. v. Willden, 678 F.3d
991, 998 (9th Cir. 2012) (failure to state a claim). We review
the district court’s “ultimate decision” to exercise or “decline
to exercise jurisdiction for abuse of discretion, but conduct de
novo review of the court’s application of the primary
jurisdiction doctrine.” N. Cnty. Commc’ns Corp. v. Cal.
Catalog & Tech., 594 F.3d 1149, 1154 (9th Cir. 2010)
(quoting Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1162
n.11 (9th Cir. 2007)).
III
The district court appeared to dismiss Reid’s claims for
relief for lack of standing under California’s standing
10 REID V. JOHNSON & JOHNSON
requirements for the UCL, FAL, and CLRA. To establish
standing to bring a claim under these statutes, plaintiffs must
meet an economic injury-in-fact requirement, which demands
no more than the corresponding requirement under Article III
of the U.S. Constitution. Hinojos v. Kohl’s Corp., 718 F.3d
1098, 1104 (9th Cir. 2013). In a false advertising case,
plaintiffs meet this requirement if they show that, by relying
on a misrepresentation on a product label, they “paid more for
a product than they otherwise would have paid, or bought it
when they otherwise would not have done so.” Id. at 1104
n.3, 1108; see also POM Wonderful LLC v. Coca-Cola Co.,
134 S. Ct. 2228, 2234 (2014) (“A consumer who is
hoodwinked into purchasing a disappointing product may
well have an injury-in-fact cognizable under Article III
. . . .”). Reid undoubtedly satisfied this individual reliance
requirement, as he alleged that he would not have been
willing to pay as much as he did for Benecol, if anything, if
he had not been misled by McNeil’s misrepresentations about
Benecol’s health effects.
The district court nevertheless decided Reid lacked
standing because he failed to “set forth alleged facts showing
that Benecol’s statements may deceive a reasonable
consumer.” It is true that violations of the UCL, FAL, and
CLRA are evaluated from the vantage point of a “reasonable
consumer.” Williams v. Gerber Prods. Co., 552 F.3d 934,
938 (9th Cir. 2008). Under that test, a plaintiff must “show
that members of the public are likely to be deceived.” Id.
(internal quotation marks omitted). But the reasonable
consumer standard, unlike the individual reliance requirement
described above, is not a standing requirement. Rather, it
raises questions of fact that are appropriate for resolution on
a motion to dismiss only in “rare situation[s].” Id. at 939.
 REID V. JOHNSON & JOHNSON 11
Even if the district court intended to dismiss Reid’s
complaint for failure to state a claim upon which relief can be
granted, it erred. The district court found that McNeil’s
“alleged misrepresentations would not likely deceive a
reasonable consumer” in light of its disclosures on its
ingredient list (i.e., the presence of partially hydrogenated
vegetable oil). However, as we have previously stated: “We
do not think that the FDA requires an ingredient list so that
manufacturers can mislead consumers and then rely on the
ingredient list to correct those misinterpretations and provide
a shield for liability for the deception.” Williams, 552 F.3d at
939. Regardless, it is far from clear that typical consumers
understand that a product containing partially hydrogenated
vegetable oil necessarily has trans fat, so even if an ingredient
list has a curative effect in some cases, it might not here.
Reid’s allegations of misrepresentations are plausible enough
to survive a motion to dismiss.
IV
The district court also found that Reid’s claims for relief
were preempted. The parties’ arguments invoke express and
conflict preemption. Express preemption exists when a
statute explicitly addresses preemption. See Chicanos Por La
Causa, Inc. v. Napolitano, 558 F.3d 856, 863 (9th Cir. 2009).
Conflict preemption applies when it is impossible to comply
with both federal and state law or when state laws stand as
obstacles to accomplishing federal objectives. See id. As will
be made clear, whether Reid’s claims are preempted turns on
our interpretation of the FDA’s actions. The preemption
analysis turns on whether the challenged statements are
authorized by the FDA’s regulations or other pronouncements
of similar legal effect. See Holk v. Snapple Beverage Corp.,
575 F.3d 329, 339–40 (3d Cir. 2009). Before analyzing the
12 REID V. JOHNSON & JOHNSON
statements at issue, we first set forth the statutory and
regulatory framework.
A
The Nutritional Labeling and Education Act (“NLEA”)
amended the Food, Drug, and Cosmetic Act (“FDCA”) to
“establish[] uniform food labeling requirements, including the
familiar and ubiquitous Nutrition Facts Panel found on most
food packages.” Lily, 743 F.3d at 664. The “NLEA also
provides that no state may ‘directly or indirectly establish any
requirement for the labeling of food that is not identical’ to
the federal requirements.” Id. at 664–65 (quoting 21 U.S.C.
§ 343-1(a)(5)) (ellipsis omitted). “The phrase ‘not identical
to’ means ‘that the State requirement directly or indirectly
imposes obligations or contains provisions concerning the
composition or labeling of food that are not imposed by or
contained in the applicable federal regulation or differ from
those specifically imposed by or contained in the applicable
federal regulation.’” Id. at 665 (quoting 21 C.F.R.
§ 100.1(c)(4)) (alteration marks omitted). The NLEA also
provides, however, that it does not preempt any state law
unless the law is “expressly preempted.”2 Holk, 575 F.3d at
337–38. The NLEA does not preempt state law-based causes
of action that are identical to the federal labeling
requirements. See POM Wonderful, 134 S. Ct. at 2238 (“[B]y
taking care to mandate express preemption of some state
laws, Congress if anything indicated that it did not intend the
FDCA to preclude requirements arising from other sources.”
(emphasis added)); Farm Raised Salmon Cases, 175 P.3d
1170, 1178–84 (Cal. 2008).
2
Other federal laws, however, may still preempt labeling claims. See
Holk, 575 F.3d at 336 & n.4.
REID V. JOHNSON & JOHNSON 13
Under the FDA regulations, the general rule is that
“nutrient content claims” are not permitted on food labels.
Nutrient content claims are statements that “expressly or
implicitly characterize[] the level of a nutrient.” 21 C.F.R.
§ 101.13(b). However, the regulations do authorize some
nutrient content claims. These include statements about the
amount or percentage of a nutrient that are consistent with the
labeling regulations (e.g., “less than 3 g of fat per serving”),
similar statements that include a disclaimer (e.g., “only 200
mg of sodium per serving, not a low sodium food”), or
statements that do not characterize the level of nutrient and
are not false or misleading (e.g., “100 calories”). Id.
§ 101.13(i). For authorized nutrient content claims,
statements may use “[r]easonable variations in the spelling of
terms . . . and their synonyms” provided that they “are not
misleading (e.g., ‘hi’ or ‘lo’).” Id. § 101.13(b)(4).
In addition to regulating nutrient content claims, FDA
regulations require labels to include the familiar “Nutrition
Facts” box, dubbed the “nutrition label” by federal
regulations. Companies are required to disclose information
about the presence of specified nutrients in this label. Id.
§ 101.9(c). Though the nutrition label clearly contains
information about nutrient content, the claims made in it are
not considered “nutrient content claims” for the purposes of
FDA regulations. See id. § 101.13(c). While a required
statement inside a nutrition label escapes regulations reserved
for nutrient content claims, the identical statement outside of
the nutrition label is still considered a nutrient content claim
and is therefore subject to section 101.13. As a result, a
requirement to state certain facts in the nutrition label is not
a license to make that statement elsewhere on the product.
14 REID V. JOHNSON & JOHNSON
FDA regulations specifically address trans fat. They
provide that trans fat should generally be disclosed in the
nutrition label “except that label declaration of trans fat
content information is not required for products that contain
less than 0.5 grams of total fat in a serving if no claims are
made about fat, fatty acid or cholesterol content.” Id.
§ 101.9(c)(2)(ii). The regulation further provides:
If the serving contains less than 0.5 gram, the
content, when declared, shall be expressed as
zero. Except as provided for [under the
provisions allowing for simplified format
labeling], if a statement of the trans fat
content is not required and, as a result, not
declared, the statement “Not a significant
source of trans fat” shall be placed at the
bottom of the table of nutrient values.
Id.
Outside the nutrition label, claimants may make nutrient
content claims such as “fat free,” “no fat,” “zero fat,” or
“negligible source of fat” on labels where the food contains
less than 0.5 grams of fat per serving and certain other
conditions are met. Id. § 101.62(b). There is a parallel
regulation permitting similar claims about “saturated fat,” see
id. § 101.62(c), but not about “trans fat.” The FDA
considered authorizing a “trans fat free” claim but decided
not to enact the regulation in light of “insufficient scientific
information.” See Food Labeling: Trans Fatty Acids in
Nutrition Labeling, Nutrient Content Claims, Health Claims,
68 Fed. Reg. 41,434, 41,464–65 (July 11, 2003).
REID V. JOHNSON & JOHNSON 15
In addition to nutrient content claims, the FDA has
specifically authorized some health claims. See 21 C.F.R.
§ 101.14. Such claims, however, must be “complete, truthful,
and not misleading.” Id. § 101.14(d)(2)(iii). These
specifically include plant stanol esters health claims. Id.
§ 101.83. The applicable regulation states:
A health claim associating diets that include
plant sterol/stanol esters with reduced risk of
heart disease may be made on the label or
labeling of a food . . . provided that . . . [t]he
claim states that diets that include plant
sterol/stanol esters “may” or “might” reduce
the risk of heart disease [and] . . . [t]he claim
specifies the daily dietary intake of plant
sterol or stanol esters that is necessary to
reduce the risk of [coronary heart disease or
“CHD”] and the contribution one serving of
the product makes to the specified daily
dietary intake level. Daily dietary intake
levels of plant sterol and stanol esters that
have been associated with reduced risk of
[CHD] are . . . 3.4 g or more per day of plant
stanol esters. . . . The claim [must also
specify] that the daily dietary intake of plant
sterol or stanol esters should be consumed in
two servings eaten at different times of the
day with other foods.
Id. § 101.83(c)(2). The claim may also “state that the
relationship between intake of diets that include plant
sterol/stanol esters and reduced risk of heart disease is
through the intermediate link of ‘blood cholesterol’ or ‘blood
total and LDL cholesterol.’” Id. § 101.83(d)(2). The
16 REID V. JOHNSON & JOHNSON
regulations further provide that the authorization only applies
to foods that meet the 1.7 grams/serving threshold (i.e., two
servings amounting to 3.4 grams) and “contains 10 percent or
more of the Reference Daily Intake or the Daily Reference
Value for vitamin A, vitamin C, iron, calcium, protein, or
fiber per reference amount customarily consumed prior to any
nutrient addition.” Id. §§ 101.83(c)(2)(iii)(A)(2), (D),
101.14(e)(6).
In 2003, the FDA issued a letter in response to a request
from Cargill Health & Food Technologies that the FDA state
its intention not to enforce certain requirements of the plant
stanol esters regulation. In the letter, the FDA indicated that
it “will consider exercising enforcement discretion with
regard to the use of a claim about reduced risk of CHD in the
labeling of phystosterol containing food” that did not meet
the requirements in the regulation. Among other things, the
FDA also indicated that qualifying health claims had to relate
to foods containing 400 mg per serving, had to specify “that
the daily dietary intake of phytosterols that may reduce the
risk of CHD is 800 milligrams (mg) or more per day,” and the
food had to satisfy the regulation’s other requirements
(suchas the 10 percent nutrient requirement). See id.
§ 101.83(c)(2)(iii)(B)–(D).
The FDA has also recognized that “a heart symbol” can
constitute a health claim. Id. § 101.14(a)(1). Where a health
claim is authorized and “where any graphic material (e.g., a
heart symbol) constituting an explicit or implied health claim
appears on the label or labeling, the reference statement or the
complete claim shall appear in immediate proximity to such
graphic material.” Id. § 101.14(d)(2)(iv). Most health claims
based on the benefits of consuming the substance “must
specify the daily dietary intake necessary to achieve the
REID V. JOHNSON & JOHNSON 17
claimed effect, as established in the regulation authorizing the
claim.” Id. § 101.14(d)(2)(vii). Health claims must also
conform “to all specific provisions in the appropriate
section.” Id. § 101.14(e)(2).
B
The challenged statements can be grouped into two
categories: (1) trans fat nutrient content claims; and (2) plant
stanol esters-based health claims.3
1
The preemption analysis of the “No Trans Fat” claim
turns on whether the statement is authorized by FDA
regulations. These regulations create two categories of
nutrient content claims, “expressed” and “implied,” imposing
a different set of requirements for each type of claim. 21
C.F.R. § 101.13(b)(1)–(2). The “No Trans Fat” claim is an
expressed claim because it “is [a] direct statement about the
level . . . of [trans fat] in the food.” Id. § 101.13(b)(1). FDA
regulations authorize expressed claims that “do[] not in any
way implicitly characterize the level of the nutrient in the
food and [are] not false or misleading in any respect (e.g.,
‘100 calories’ or ‘5 grams of fat’).” See id. § 101.13(i)(3).
3
Reid also challenges McNeil’s use of various symbols on Benecol’s
label. McNeil’s ability to use these symbols depends on its authority to
make the trans fat nutrient content claims and plant stanol esters-based
health claims. Because we find that none of Reid’s other claims are
preempted, his challenges to these symbols also survive. Furthermore,
Reid acknowledges that his contention that Benecol is a misbranded
cholesterol drug is only viable “[a]bsent regulatory allowance,” meaning
that it also rises or falls with his other health claims.
18 REID V. JOHNSON & JOHNSON
The FDA has provided guidance about whether a “No
Trans Fat” nutrient content claim is permissible for products
containing small amounts of trans fat. In one of its warning
letters,4 the FDA indicated that “No Trans Fat” is “an
unauthorized nutrient content claim . . . which has not been
defined by FDA.” The agency noted that the letter’s recipient
could “make a truthful statement on a product’s label that
specifies the amount of trans fat per serving.” See 21 C.F.R.
§ 101.13(i). In a second letter, the FDA similarly indicated
that “trans fat-free” is an “unauthorized nutrient content
claim.” We defer to the FDA’s interpretation of its own
rules, even if the product of an informal and non-final
process,5 unless its interpretation is clearly erroneous. See
Pub. Lands for the People, Inc. v. U.S. Dep’t of Agric.,
697 F.3d 1192, 1199 (9th Cir. 2012) (“Where an agency
interprets its own regulation, even if through an informal
process, its interpretation of an ambiguous regulation is
4
Reid argues that the district court erred by failing to take judicial notice
of the warning letters and that we should take judicial notice of the letters.
Judicial notice, however, is unnecessary for materials establishing the
legal principles governing a case. Von Saher v. Norton Simon Museum of
Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010); see also Von Koenig
v. Snapple Beverage Corp., 713 F. Supp. 2d 1066, 1073 (E.D. Cal. 2010)
(considering FDA warning letters for the purposes of a motion to dismiss).
Accordingly, it is not necessary for us to take judicial notice of the
warning letters in order to consider them. Because we do consider the
letters, it is also unnecessary for us to determine whether the district court
erred by failing to do so.
5
The FDA uses warning letters, among other enforcement measures, to
police objectionable food and beverage labels in lieu of a preapproval
process. POM Wonderful, 134 S. Ct. at 2239. Although “informal and
advisory,” the FDA issues warning letters to obtain voluntary and prompt
corrective action for what it considers to be significant violations of the
FDCA. The warning letters are publicly available on the FDA’s website.
REID V. JOHNSON & JOHNSON 19
controlling under Auer [v. Robbins, 519 U.S. 452, 461
(1997),] unless plainly erroneous or inconsistent with the
regulation.” (internal citations and alteration marks omitted)),
cert. denied, 133 S. Ct. 1464 (2013).
A nutrient content claim fails if it is “false or misleading
in any respect.” 21 C.F.R. § 101.13(i)(3) (emphasis added).
Because Benecol contains some trans fat (between 0 and 0.5
grams per serving), its “No Trans Fat” claim is misleading in
at least one respect. The structure of FDA labeling
regulations bolsters this conclusion. As noted, under section
101.62(b)–(c), the FDA has expressly allowed “No Fat” and
“No Saturated Fat” claims for products that contain less than
0.5 grams of fat or saturated fat per serving. By contrast, the
FDA explicitly decided not to authorize a “No Trans Fat”
claim in light of a lack of scientific information. See 68 Fed.
Reg. 41,434, 41,464–65. If a “No Trans Fat” claim is not
“false or misleading” under 21 C.F.R. § 101.13 (i)(3), a “No
Fat” or “No Saturated Fat” claim cannot be treated
differently. This would mean that section 101.62(b)–(c) is
redundant: If section 101.13(i)(3) authorizes “No Fat” and
“No Saturated Fat” claims for products with small amounts
of fat or saturated fat, then why would the FDA go to the
trouble of promulgating a separate regulation expressly
allowing these claims? It would be incongruous to have the
same rule for both “No Fat”/“No Saturated Fat” and “No
Trans Fat” claims, as the former is expressly permitted while
the latter is not due to a lack of scientific consensus about the
dangers of trans fat. Thus, the FDA’s reading of
section 101.13(i)(3)—that the regulation does not authorize
“No Trans Fat” claims—makes the most sense of the overall
labeling regime, as it gives meaning to section 101.62(b)–(c).
20 REID V. JOHNSON & JOHNSON
McNeil says its “No Trans Fat” claim is the equivalent of
its statement on the nutrition label that Benecol contains 0
grams of trans fat per serving, a statement it must make under
section 101.9(c)(2)(ii). FDA regulations allow a label to
include synonyms of authorized nutrient content claims, id.
§ 101.13(b)(4), which McNeil claims is exactly what its “No
Trans Fat” claim is. But, as noted, claims required on a
nutrition label under section 101.9(c), like Benecol’s “0
grams trans fat per serving” claim, are not nutrient content
claims and thus are not covered by section 101.13(b)(4)’s
synonym rule. That McNeil must say Benecol contains 0
grams of trans fat per serving on its nutrition label makes no
difference here.
The district court found that “No Trans Fat” was not
misleading, as any reasonable consumer would infer that
Benecol contains trans fat, given that partially hydrogenated
vegetable oil is disclosed as an ingredient. As noted,
however, there is no reason to believe that consumers
understand that partially hydrogenated vegetable oil contains
trans fat. Consequently, we conclude that Reid’s claims for
relief are not preempted to the extent they are predicated on
McNeil’s trans fat statements.
2
As for the plant stanol esters and cholesterol reduction
claims, McNeil admits that the claims fall short of 21 C.F.R.
§ 101.83(c)(2), which permits health claims related to plant
stanol esters that meet certain requirements. These health
claims do, however, meet the criteria described in the FDA’s
2003 letter about its enforcement intentions. McNeil argues
that, in spite of its noncompliance with section 101.83(c)(2),
the 2003 letter “created [a] federal policy preempting state
REID V. JOHNSON & JOHNSON 21
law.” We must decide whether this letter is entitled to
preemptive effect.6
The Supremacy Clause gives federal authorities the power
to preempt state law by declaring that the “Constitution, and
the Laws of the United States . . . [are] the supreme Law of
the Land.” U.S. Const. art. VI, cl. 2. “The phrase ‘Laws of
the United States’ encompasses both federal statutes
themselves and federal regulations that are properly adopted
in accordance with statutory authorization.” City of New York
v. FCC, 486 U.S. 57, 63 (1988). Thus, “a federal agency
acting within the scope of its congressionally delegated
authority may . . . render unenforceable state or local laws
that are otherwise not inconsistent with federal law.” Id. at
64 (internal quotation marks omitted). Because the
Supremacy Clause privileges only “[l]aws of the United
States,” an agency pronouncement must have the force and
effect of federal law to have preemptive force. See Fellner v.
Tri-Union Seafoods, LLC, 539 F.3d 237, 245 (3d Cir. 2008);
Wabash Valley Power Ass’n, Inc. v. Rural Electrification
Admin., 988 F.2d 1480, 1485–86 (7th Cir. 1993). Beyond the
constitutional text, there is nothing to guide us in determining
whether an agency action creates “law” for Supremacy
Clause purposes.
6
Although Reid suggests that the cholesterol reduction claims are not
authorized even if the 2003 letter is entitled to preemptive force, the FDA
explicitly found that “[t]he scientific evidence establishes that including
plant sterol/stanol esters in the diet helps lower blood total and LDL
cholesterol levels.” 21 C.F.R. § 101.83(b)(2). Thus, it appears that if
Benecol contains the minimum amounts necessary to make the health
claims at issue, it is consequently also proven to reduce cholesterol as far
as the FDA is concerned.
22 REID V. JOHNSON & JOHNSON
The Supreme Court has created a framework for deciding
whether Congress contemplated that a particular agency
pronouncement would have the force and effect of federal
law in the Chevron context. Under Chevron, when an agency
fills a gap in a statute that Congress explicitly or implicitly
left open for that agency to fill, its “regulations are given
controlling weight unless they are arbitrary, capricious, or
manifestly contrary to the statute.” Chevron, U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837, 843–44 (1984).
In other words, it’s the agency’s job—not ours—to fill with
“law” the statutory interstices Congress left open. We
intervene only when in doing so the agency has acted
unreasonably, exceeded the authority Congress delegated to
it, or failed to observe required procedures. But only those
agency pronouncements that Congress intended to carry the
“force of law” require Chevron-level deference, and we
determine whether an agency spoke with such force under the
standard set forth in United States v. Mead Corp., 533 U.S.
218, 234 (2001), and its progeny.
We conclude that this standard is pertinent to the
preemption analysis here. In both Chevron and preemption
contexts, a central inquiry is whether an agency has validly
created federal law pursuant to the gap-filling power
delegated to it by Congress. In the former situation, we
decide whether Chevron-level deference is due because
Congress intended for the agency’s pronouncement to carry
the force of law; in the latter, we decide whether state law is
preempted because Congress intended for the agency’s
pronouncement to carry the binding and exclusive force of
federal law. Creation of federal law should demand at least
the same formality for purposes of preemption as it does for
REID V. JOHNSON & JOHNSON 23
purposes of Chevron deference.7 We therefore join the Third
Circuit in declining to afford preemptive effect to agency
actions that do not carry the force of law under Mead and its
progeny. See Fellner, 539 F.3d at 245.
Applying this rule here, the 2003 letter lacks preemptive
effect. While some agency actions short of notice-and-
comment rulemaking may have the force of law,
“enforcement guidelines” like those set forth in the FDA’s
letter “are beyond the Chevron pale.” Mead, 533 U.S. at 234.
To begin, the letter itself does not indicate that the FDA
“set out with a lawmaking pretense in mind.” Id. at 233. The
letter is couched in tentative and non-committal terms. The
letter does not promise that the FDA will not enforce its
existing regulation applicable to health claims about plant
stanol esters. Instead, the letter provides that the FDA
“intends to consider the exercise of enforcement discretion”
in certain circumstances. The FDA has separately stated,
however, that such letters indicate that it “does not intend to
object to the use of the claim specified in the letter, provided
that the products that bear the claim are consistent with the
stated criteria.” Thus, the FDA appears to regard the letter as
providing firmer guidance regarding its own enforcement
discretion than the 2003 letter’s tentative language would
suggest. Still, the letter’s plain language does not authorize
any health claims that conflict with the FDA’s existing plant
stanol esters rule. The letter only expresses the FDA’s
7
We do not reach the question of how “the presumption against
preemption,” and the federalism concerns that animate it, might further
guide our evaluation of the preemptive effect of an action by the FDA
implementing the FDCA. See Wyeth v. Levine, 555 U.S. 555, 565 (2009);
Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449 (2005).
24 REID V. JOHNSON & JOHNSON
“intent” to “consider” enforcement discretion while the FDA
continues deliberations regarding whether a change to that
rule is appropriate. The FDA’s equivocal language regarding
its intention to foreclose its own ability to enforce non-
compliance with existing rules is a good indication that it did
not intend to foreclose state law challenges to health claims
that do not comply with existing rules.
Reading the FDA’s 2003 letter in the context of the
FDCA’s statutory scheme also militates against a finding of
preemption. The FDA can approve health claims effective
immediately, pending consideration of public comment and
publication of a final regulation. 21 U.S.C. § 343(r)(7). In
fact, the FDA issued its 2000 plant stanol esters rule pursuant
to this authority, and thereby approved of certain health
claims about plant stanol esters effective immediately. Food
Labeling: Health Claims; Plant Sterol/Stanol Esters and
Coronary Heart Disease, 65 Fed. Reg. 54,686, 54,713–54,714
(Sept. 8, 2000). The fact that the FDA did not invoke this
authority in setting forth the enforcement criteria in the 2003
letter also indicates that the FDA did not intend to issue a
standard with the force of law that would foreclose the public
protections under state law food labeling and false advertising
claims.
Similarly, we are not convinced that Congress intended
for an FDA pronouncement like that set forth in the 2003
letter to have the binding and exclusive effect of federal law.
Giving the 2003 letter preemptive effect would effectively
open an additional shortcut allowing the FDA to authorize
health claims without notice and comment. Shortcuts are not
inherently bad and, again, some agency actions short of
notice-and-comment rulemaking may have the binding and
exclusive force of federal law. But Congress demonstrated
REID V. JOHNSON & JOHNSON 25
that it knew how to create such a shortcut in enacting
21 U.S.C. § 343(r)(7), indicating that Congress did not intend
to create an additional, unstated means of rulemaking by way
of letters tentatively stating the FDA’s enforcement
discretion.
Finally, while not determinative of our decision, we are
concerned that allowing the FDA effectively to authorize
health claims by way of statements of its enforcement policy
could place those authorizations beyond judicial review. This
is so because agency decisions not to take enforcement action
are usually committed to agency discretion by law and thus
generally not subject to judicial review under the
Administrative Procedure Act. See 5 U.S.C. § 701(a)(2);
Heckler v. Chaney, 470 U.S. 821, 828–35 (1985).
Foreclosing challenges to, and judicial review of, the FDA’s
health claim approvals likely would not serve Congress’s
goals in the FDCA of increasing the protections of public
health and safety. See POM Wonderful, 134 S. Ct. at 2234
(“The FDCA statutory regime is designed primarily to protect
the health and safety of the public at large.”). Indeed,
Congress was careful to preserve judicial review of the
FDA’s actions even where the FDA makes a proposed
regulation effective immediately, pending consideration of
public comment and publication of a final regulation.
21 U.S.C. § 343 (r)(7) (“Such proposed regulations shall be
deemed final agency action for purposes of judicial review.”).
For these reasons, we hold that Reid’s claims for relief are
not preempted by the FDA’s 2003 enforcement letter. We
note that this conclusion, of course, in no way indicates that
Reid’s state law claims have merit.
26 REID V. JOHNSON & JOHNSON
V
McNeil also asserts that the district court erred by
rejecting its argument that Reid’s action is barred by the
primary jurisdiction doctrine. McNeil argues that the primary
jurisdiction doctrine applies here because “FDA expertise is
required to resolve the question of whether Benecol contains
sufficient plant stanol esters to reduce cholesterol and
whether the insignificant amount of trans fats undermine the
positive impact of plant stanol esters.” McNeil further
suggests that the FDA is in the process of an “ongoing
regulatory review” pending the completion of its final plant
stanol esters rule.
“The primary jurisdiction doctrine allows courts to stay
proceedings or to dismiss a complaint without prejudice
pending the resolution of an issue within the special
competence of an administrative agency.” Clark v. Time
Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). It “is a
prudential doctrine under which courts may, under
appropriate circumstances, determine that the initial
decisionmaking responsibility should be performed by the
relevant agency rather than the courts.” GCB Commc’ns, Inc.
v. U.S. S. Commc’ns, Inc., 650 F.3d 1257, 1263–64 (9th Cir.
2011) (internal quotation marks omitted). “It is useful . . . in
instances where the federal courts do have jurisdiction over
an issue, but decide that a claim requires resolution of an
issue of first impression, or of a particularly complicated
issue that Congress has committed to a regulatory agency.”
Id. at 1264 (internal quotation marks omitted). It applies in
“limited circumstances” and is “not designed to secure expert
advice from agencies every time a court is presented with an
issue conceivably within the agency’s ambit.” Clark,
523 F.3d at 1114 (internal quotation marks omitted).
REID V. JOHNSON & JOHNSON 27
McNeil’s argument has some facial appeal because the
preemption issues in this case turn on the interpretation and
applicability of the FDA’s regulations and other actions.
Nonetheless, the argument is ultimately unpersuasive. The
FDA has already addressed some issues that McNeil
identifies as requiring further regulatory review. For
example, the FDA has specifically declined to authorize “No
Trans Fat” nutrient content claims, and has issued warning
letters to companies making such claims.
Reid’s claims present no issues of first impression, as the
FDA has already addressed the substantive issues raised here.
Regarding plant stanol esters, there is already an interim final
rule on the books. Plus, it has been over a decade since the
FDA indicated that it would issue a new final plant stanol
esters rule.8 Cf. Baykeeper v. NL Indus., Inc., 660 F.3d 686,
692 (3d Cir. 2011) (concluding that there was little risk of
inconsistent rulings that would support the application of the
primary jurisdiction doctrine where the agency had not issued
any rulings for several years). Similarly, there is no
indication that the FDA is contemplating authorizing “No
Trans Fat” statements.9 The issue that this case ultimately
8
Any final rule might not govern the preemption analysis for the time
period covered by Reid’s action. See Elim Church of God v. Harris,
722 F.3d 1137, 1141–42 (9th Cir. 2013).
9
The FDA has shown no signs of backing away from its determination
that “trans fat free” nutrient content claims are not authorized. It stated:
Since 2003, both controlled trials and observational
human studies published on trans fatty acid
consumption have consistently confirmed the adverse
effects of trans fatty acid consumption on intermediary
risk factors (e.g., serum lipoproteins) and the increased
risk of CHD . . . . [Several notable] expert panels all
28 REID V. JOHNSON & JOHNSON
turns on is whether a reasonable consumer would be misled
by McNeil’s marketing, which the district courts have
reasonably concluded they are competent to address in similar
cases. See, e.g., Chacanaca, 752 F. Supp. 2d at 1124.
The “deciding factor” in determining whether the primary
jurisdiction doctrine should apply is “efficiency.” Rhoades
v. Avon Prods., Inc., 504 F.3d 1151, 1165 (9th Cir. 2007).
Because the FDA has made considered judgments on the
legal issues in this case, we reject McNeil’s argument. See id.
Consequently, the district court properly declined to dismiss
or stay the case pursuant to the primary jurisdiction doctrine.
VI
McNeil further argues that Reid’s action is barred by
California’s judicial abstention doctrine. See Alvarado v.
Selma Convalescent Hosp., 153 Cal. App. 4th 1292,
1297–1303 (2007). Having dismissed Reid’s claims on
preemption grounds, the district court never addressed this
issue. We therefore leave it for the district court’s
consideration on remand.
concluded that there is no threshold intake level for
industrially-produced trans fat that would not increase
an individual’s risk of CHD, or adverse effects on risk
factors for CHD. Moreover, the panels also agree that
trans fatty acids have a stronger effect on the risk of
CHD than saturated fatty acids.
Tentative Determination Regarding Partially Hydrogenated Oils; Request
for Comments and for Scientific Data and Information, 78 Fed. Reg.
67,169, 67,172 (Nov. 8, 2013). Accordingly, the FDA has tentatively
concluded that there is no scientific consensus that partially hydrogenated
oils, as the primary dietary source of artificial trans fat, are safe for use in
food. See id. at 67,173.
 REID V. JOHNSON & JOHNSON 29
VII
Reid’s basic contention in this case is that Benecol is
improperly being marketed and sold to consumers as health
food. At this early stage of the proceedings, we cannot say
whether he is right or wrong. It is clear, however, that
Benecol’s label prominently states that Benecol contains “No
Trans Fat.” That statement is not true. Although Benecol
may contain a relatively small amount of trans fat per serving,
the FDA found that the existing scientific evidence was not
sufficient for it to approve “No Trans Fat” claims. Despite
this finding, McNeil made such a claim. Given that the FDA
has indicated in warning letters that claims like “No Trans
Fat” are not authorized, McNeil cannot shield itself from
liability with the FDA’s regulations. We also hold that an
FDA letter stating a tentative enforcement policy does not
preempt state law. Consequently, we reverse the district
court’s decision dismissing Reid’s action. We affirm the
district court’s decision to the extent that it declined to invoke
the primary jurisdiction doctrine. We remand for further
proceedings consistent with this opinion.
AFFIRMED in part, REVERSED in part, and
REMANDED.
Parties shall bear their own costs.