Friday, March 24, 2017

First Amendment bars labeling restriction for "skim milk" without added Vitamin A

Ocheesee Creamery LLC v. Putnam, 2017 WL 1046104, --- F.3d ----, No. 16-12049 (11th Cir. Mar. 20, 2017)

The Creamery here succeeded in its First Amendment claim to use the words “skim milk” to describe its product.

The Creamery produces cream by skimming it off the top of the milk; what’s left over is skim milk: “milk that has had the fat removed through skimming.”  The skimming process also removes almost all the vitamin A naturally present in whole milk because vitamin A is fat-soluble. “The Creamery prides itself on selling only all-natural, additive-free products, and therefore refuses to replace the lost vitamin A in its skim milk,” unlike most sellers.

Florida law prohibits the sale of milk and milk products that are not Grade “A,” which requires, among other things, that vitamin A lost in the skimming process must be replaced. The State told the Creamery it could sell its product without adding vitamin A so long as it bore the label “imitation milk product.” The Creamery offered alternative labels: (1) “Pasteurized Skim Milk, No Vitamin A Added;” [making Vitamin A sound bad] (2) “Pasteurized Skim Milk, No Lost Vitamin A Replaced;” [not particularly helpful] (3) “Pasteurized Skim Milk, Most Vitamin A Removed By Skimming Cream From Milk;” [possibly not bad] (4) “Non-Grade ‘A’ Skim Milk, Some Milk Vitamins Reduced By Skimming Cream From All-Natural Pasteurized Milk;” [less helpful] and (5) “The State Requires Us To Call This: ‘Non-Grade “A” Milk Product, Natural Milk Vitamins Removed.’ It Is All-Natural Skim Milk With Some Vitamin A Removed By Skimming Cream From Milk.” [why “some” now instead of “most”?]

The State proposed: “The State requires us to call this: ‘Non Grade “A” Milk Product, Natural Milk Vitamins Removed.’ All natural milk product with vitamins removed by separating cream from milk.” The Creamery alleged that it would “happily use” a disclaimer stating that its skim milk does not have the same vitamins as whole milk.

The court began, ominously, that burden of showing that the Creamery’s speech was misleading or unlawful and the burden of satisfying the other Central Hudson factors was on the government. The state said that the Creamery’s skim milk couldn’t lawfully be sold, but that wasn’t true: it was legal to sell skim milk without restored Vitamin A; it just had to be sold as “milk product” using an imitation milk permit.

The Creamery’s use of “skim milk” wasn’t inherently misleading just because it conflicted with the state’s definition. The court continued:

It is undoubtedly true that a state can propose a definition for a given term. However, it does not follow that once a state has done so, any use of the term inconsistent with the state’s preferred definition is inherently misleading. Such a per se rule would eviscerate Central Hudson, rendering all but the threshold question superfluous. All a state would need to do in order to regulate speech would be to redefine the pertinent language in accordance with its regulatory goals. Then, all usage in conflict with the regulatory agenda would be inherently misleading and fail Central Hudson’s threshold test. Such reasoning is self-evidently circular ….

[The court here indicates its lack of consideration of the wide range of speech regulations evaluated under Central Hudson, many of which could not be evaded by establishing a state standardized meaning for a term.]  “[S]tatements of objective fact, such as the Creamery’s label, are not inherently misleading absent exceptional circumstances,” and the Creamery’s choice of “skim milk” to identify its product was a statement of objective fact (citing dictionary definition).

The court continued:

This is not to say that a state’s definition of a term might not become, over time and through popular adoption, the standard meaning of a word, such that usage inconsistent with the statutory definition could indeed be inherently misleading. But the state must present evidence to that effect, and that has not been done here.

With a “but see” cite to Zauderer, where the Supreme Court upheld a regulation without further evidence where “the possibility of deception is as self-evident as it is in this case.”

Here, the State produced a study in which consumers indicated they would “expect skim milk to include the same vitamin content as whole milk.” But that wasn’t enough, because “[t]he State’s study provides no evidence that consumers expected anything other than skim milk when they read those words on the Creamery’s bottles, the State’s alternative definition notwithstanding.” [Yes, because consumers have never before had occasion to pull apart the aspects of skim milk with which they are familiar, given the regulation.  They don’t know that there’s any difference between “skim milk” and “skim milk with the same vitamins as whole milk.”] 

Because the label “skim milk” wasn’t inherently misleading applied to the Creamery’s product, the court proceeded to the Central Hudson three-part test, but even assuming the state’s interest was substantial, its method was more restrictive than necessary. “[N]umerous less burdensome alternatives existed and were discussed by the State and the Creamery during negotiations that would have involved additional disclosure without banning the term ‘skim milk,’” such as the Creamery’s willingness to accept: “It [the milk] is all-natural skim milk with some vitamin A removed by skimming cream from milk.” [Some or most?]  Although Central Hudson isn’t a least restrictive means test, the State didn’t show that barring the use of the term was “reasonable, and not more extensive than necessary to serve its interest” in avoiding deception and promoting nutrition.

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