On June 4, 2021, a panel of judges from the Ninth Circuit Court of Appeals affirmed the dismissal of consumer poultry labeling claims against Trader Joe’s on the ground that those claims were federally preempted. The consumer claims alleged that Trader Joe’s labels on poultry were misleading under California law because they had different percentages of retained water than was displayed on their labels.

Poultry labeling, including a retained water data collection process and label production, is regulated by the federal Poultry Products Inspection Act (“PPIA”) and the Food Safety and Inspection Service (“FSIS”) (an agency within the U.S. Department of Agriculture).

The plaintiff purchased poultry products from Trader Joe’s with a label stating that those products contained “up to 5% retained water.” She then had those products examined by a food testing lab, which concluded that the products had 9% retained water, more than the 5% on the label. She filed suit under California law alleging that the poultry products included “unlawfully large amounts” of retained water, which caused consumers to pay more for economically adulterated and misbranded products.

The district court dismissed the case with prejudice, finding that the plaintiff’s complaint failed to allege that her testing protocol was consistent with Trader Joe’s requirements under federal law. Because federal law and FSIS regulations governed poultry water labeling requirements, imposing additional requirements under California law was not permitted.

The panel affirmed the district court's dismissal and held that federal law expressly preempts claims relating to regulated labels that would impose requirements that are “in addition to, or different than those” already required by federal law. Thus, the plaintiff’s state law claims were preempted because they would have the effect of forcing the business to follow both the FSIS-required protocol, and an additional protocol under California law.