June 25, 2009 11:42 AM

Do FDA Regulations Preempt Consumer Fraud Class Actions?

Posted by Zach Lowe

Van Beckwith of Baker Botts acknowledged that momentum might not be on his side as he argued Wednesday on behalf of Snapple that a consumer fraud lawsuit against the beverage company should be tossed out under the doctrine of federal preemption, according to the Legal Intelligencer, an Am Law Daily sibling publication. 

A federal district court dismissed the case in 2007, ruling, in part, that the Food and Drug Administration's labeling regulations preempt consumer fraud suits focused on misleading labels, the paper says. But a three-judge panel of the U.S. Court of Appeals for the Third Circuit appeared to embrace the notion that preemption is a less powerful doctrine in the wake of the landmark U.S. Supreme Court ruling in Wyeth v. Levine this year, according to the Intelligencer.

"A lot has happened," Judge D. Brooks Smith said to Beckwith, according to the paper.

"Much has happened, I agree," Beckwith replied. He went on to argue that the issue in Wyeth--warning labels on drugs--is distinct from the issue in the Snapple case, which concerns the company's allegedly false claims that its drinks were "all natural." In reality, the drinks were sweetened with high-fructose corn syrup, a sweetener that has been tied to obesity, the Intelligencer says. (Snapple no longer uses it). 

Lawyers for the class of plaintiffs in the case have asked the Third Circuit to reinstate the lawsuit, and the three-judge panel appeared likely to do so yesterday, the paper says. If they do, it will be the latest in a series of blows to preemption that includes the Wyeth ruling, President Barack Obama's memo, released last month, declaring that federal preemption should be the exception rather than the rule, and another recent Third Circuit ruling that revived a consumer fraud suit against Chicken of the Sea over mercury content of the company's tuna, the Intelligencer says. 

The Snapple case as a result has attracted wide attention from trade groups. The Grocery Manufacturers Association, the American Beverage Association and the Corn Refiners association have all hired Hogan & Hartson partner Lorane Hebert to file an amicus brief on their behalf supporting Snapple, court records show. The organization Public Citizen and the Center of Science in the Public Interest has also filed an amicus brief.

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