Written by: Amie Alexander, JD/MPS Candidate, William H. Bowen School of Law
The United States District Court for the Northern District of California issued an order granting Abbot Laboratories Inc.’s motion to dismiss in part for lack of jurisdiction. The Court stayed the case pending the issuance of final rules by the United States Department of Agriculture (USDA). The action arose as a punitive consumer class action suit in which plaintiffs asserted deceptive and unfair business practices of Non-GMO baby formula (“Similac Non-GMO”) manufactured and sold by Abbott Laboratories (“Abbott”).
Plaintiffs allegedly commissioned tests of Similac Non-GMO, which showed the presence of genetically-engineered soy; plaintiffs allege all formulations of Similac Non-GMO contain the same presence. Both named plaintiffs allegedly purchased Similac Non-GMO because they did not want to feed their babies formula containing GMOs, even though the formulations were more expensive than others. Plaintiffs alleged claims for violations under the Magnuson-Moss Warranty Act (See 15 U.S.C. § 2301) for breach of written warranty based on misleading labeling, claims for unjust enrichment, and other California and Tennessee state law violations. Plaintiffs brought suit on behalf of themselves, and a national class for all who had purchased Similac Non-GMO in the United States, along with sub-classes of purchasers in California and Tennessee.
Abbott moved to dismiss the complaint for failure to state a claim under FRCP 12(b)(6) based on federal law giving the USDA sole responsibility over GMO labeling (See the National Bioengineered Food Disclosure Act), and its argument that the complaint’s sole federal claim, the Magnuson-Moss Warranty Act, should fail as “product labeling is not a warranty that can give rise to liability under the statute.”
The Court denied Abbott’s motion to dismiss state law claims based on the preemptive federal law, but granted its motion to dismiss claims under the Magnuson-Moss Warranty Act. Further, the Court stayed the case pending USDA’s promulgation and issues of rules regarding GMO labeling, which are required for the implementation of the National Bioengineered Food Disclosure Act by July 29, 2018. The Court ordered parties to this suit to file a joint status report providing an update and positions on the lifting of the stay after the issuance of these rules.