mandatory disclosure doesn’t have to correct deception

American Meat Institute v. United States Department of Agriculture, No. 13-5281 (D.C. Cir. Mar. 28, 2014)

The court rejects challenges to meat labeling rules that demonstrate once again that commercial speech regulation and the post-Lochner settlement are inextricably linked. Here, the Department of Agriculture’s Agricultural Marketing Service adopted a rule implementing Congress’s requirement of country of origin labeling (COOL) for meat. Under the relevant statute, a US label is reserved for animals exclusively born, raised, and slaughtered in the US, while animals from multiple countries have to be labeled with their countries of origin.  The rule requires retailers of “muscle cuts” (meat other than ground meat) to list the countries of origin in which the source animals were born, raised, and slaughtered, distinguishing among those acts where required. The previous rule merely required the phrase “Product of” followed by a list of the countries of origin, and allowed commingling (in which cuts from animals of different origins, but processed on the same day, could all bear identical labels).  Canada and Mexico filed a WTO complaint against the previous rule, and a panel found against the US, apparently based on “an objection to the relative imprecision of the information required by the 2009 rule.”

Under the new rule, acceptable labels (assuming the truth of the statements) are “Born, Raised, and Slaughtered in the United States,” “Born in X, Raised and Slaughtered in the United States,” “Born and Raised in X, Slaughtered in the United States,” etc.  There’s no longer an exception for commingling.  The court of appeals first affirmed the district court’s ruling that the regulation didn’t unlawfully ban commingling.  The rule doesn’t ban any element of the production process; it just requires accurate labeling.  Under current practices, meat packers can’t provide accurate labels if they are engaged in commingled production.  The necessary changes may be costly, but that doesn’t “force segregation” as the plaintiff complained, “except in the sense that compliance with any regulation may induce changes in unregulated production techniques that a profit-seeking producer would not otherwise make.”  Here, the objection isn’t a First Amendment objection—it’s more in the nature of substantive due process.

The court turned to the First Amendment argument.  First, the plaintiff argued that Central Hudson ought to apply, not Zauderer, because this wasn’t an anti-deception regulation.  The court held that the disclosure was “purely factual and non-controversial,” and, unlike the challengers in United States v. United Foods, Inc., 533 U.S. 405 (2001), or R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205, 1212, 1216-17 (D.C. Cir. 2012), the plaintiff didn’t object to the content of the mandatory message.  It objected to the term “slaughtered,” but retailers are allowed to substitute the euphemism “harvested.”  (Harrumph.  The court recognizes that this is a euphemism; slaughtered is the factual and noncontroversial term—the animals’ lives are deliberately ended in a systematic way.  Producers may fear that consumers will be squeamished if reminded in any way that their meal once had a face, but that just shows how misguided the idea that disclosures should be “noncontroversial” is.  It’s a manipulable and ultimately meaningless standard.)

The plaintiff relied on International Dairy Foods Association v. Amestoy, 92 F.3d 67 (2d Cir. 1996), which invalidated a Vermont law requiring dairy manufacturers to put a blue dot on milk products from cows treated with recombinant Bovine Somatotropin (rBST), which the FDA had found to have no significant effect on the milk.  The government disagreed with Amestoy(yes!) but also distinguished it since the dot might have been seen by consumers “as a concession that the treatment might affect the quality of the milk.”  And here we get some lovely casual empiricism based on the court’s guesses about what consumers are like:

Although the government later seeks to justify the COOL requirements as possibly reassuring consumers who are anxious about potentially lax foreign practices, it seems a good deal less likely that consumers would draw negative hints from COOL information than from the required declarations about use of rBST. Reference to an apparently novel additive on milk cartons might well lead to an inference that the additive might have a dangerous effect, whereas the appearance of countries of origin on packages of meat seems susceptible to quite benign inferences, including simply that the retailers take pride in identifying the source of their products.   

So, without agreeing or disagreeing with Amestoy, the court found it distinguishable. 

Under Zauderer, a commercial speaker has only a minimal First Amendment interest in not providing purely factual information with which it does not disagree, as long as disclosure is reasonably related to the state’s interest in preventing deception.  Plaintiff argued that this meant that non-deception-related interests weren’t subject to relaxed Zauderer scrutiny, but rather to Central Hudson. But the court found that Zauderer extended to factual disclosures that did something other than correcting deception.  Other circuits have similarly extended it to, for example, “government interests in telling buyers that mercury-containing light bulbs do contain mercury and may not be disposed of until steps have been taken to ‘ensure that [the mercury] does not become part of solid waste or wastewater,’ and in alerting health benefit providers of the background decisions made by pharmacy benefit managers in their sales to the providers.”  Zauderer’s characterization of the speaker’s minimal interest in avoiding disclosure was “inherently applicable beyond the problem of deception.” To the extent that previous DC Circuit decisions seemed to say otherwise, they didn’t because they didn’t involve purely factual and uncontroversial information, though the panel suggested that the court go en banc to provide a clear ruling on the issue.

So what are the government’s interest in COOL?  Plaintiff argued that, as in Amestoy, disclosure was just a matter of consumers’ curiousity.  But the court found non-frivolous values advanced by the disclosure: “Obviously it enables a consumer to apply patriotic or protectionist criteria in the choice of meat. And it enables one who believes that United States practices and regulation are better at assuring food safety than those of other countries, or indeed the reverse, to act on that premise.” These interests weren’t so trivial or misguided as to fall below the threshold that would sustain a minimal intrusion on commercial speakers’ First Amendment interests.

Without likely success on the merits, the rule couldn’t be enjoined.  “There is, moreover, a public interest factor that we did not consider in our constitutional analysis, that of allowing the United States’s effort to comply with the WTO ruling to take effect. We are clearly in a poor position to assess the effects of any noncompliance.”  (But does this really matter? If the First Amendment barred the law had Congress adopted it on its own, could WTO compliance change the calculus?)
This entry was posted in commercial speech, disclosures, first amendment. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s