Monday, December 16, 2019

court enjoins bar on "fake meat" labels; implications for FDA standards of identity?

Turtle Island Foods SPC v. Soman, No. 4:19-cv-00514-KGB (E.D. Ark. Dec. 11, 2019)

Unsurprisingly, the court here enjoins provisions of Arkansas law that tried to restrict the use of “meat” terms for meatless alternatives. The worrying part is that the breadth of the decision throws into doubt FDA’s general ability to set standards of identity for food products, though there are also ways to distinguish at least some of the reasoning. The big looming issue, as with the skim milk case relied on by the court here, is what should happen when consumers don’t actually understand the characteristics of the food at issue: (how) can the government protect them from mistaken beliefs that could harm them in those circumstances?  Where we think there’s a relatively robust consumer understanding, e.g. that almond milk is not dairy milk, then perhaps we can be less worried—though I will note that I haven’t seen good evidence about what consumers think about the comparability between almond and dairy milk on measures of nutrition as opposed to taste/function in a beverage.

Anyhow, plaintiff Tofurkey uses traditional meat-based terms like “chorizo,” “ham roast,” and “hot dogs,” alongside qualifiers like “all vegan,” “plant based,” “vegetarian,” and “veggie.” Tofurky alleged and the court accepted that Tofurkey’s products “comply with federal food labeling regulations as well as numerous state and federal laws that prohibit false and deceptive labeling and marketing for food products and consumer products more generally,” though see below for a possible qualification.

Arkansas law relevantly provides:

A person shall not misbrand or misrepresent an agricultural product that is edible by humans, including without limitation, by:. . .
(2)       Selling the agricultural product under the name of another food;. . .
(5)       Representing the agricultural product as a food for which a definition and standard of identity has been provided by regulations under § 20-56-219 or by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as it existed on January 1, 2019, unless:
(A)       The agricultural product conforms to the definition and standard; and
(B)       The label of the agricultural product bears the name of the food specified in the definition and standard and includes the common names of optional ingredients other than spices, flavoring, and coloring present in the food as regulations require;
(6)       Representing the agricultural product as meat or a meat product when the agricultural product is not derived from harvested livestock, poultry, or cervids [a mammal of the deer family];. . .
(8)       Representing the agricultural product as beef or a beef product when the agricultural product is not derived from a domesticated bovine;
(9)       Representing the agricultural product as pork or a pork product when the agricultural product is not derived from a domesticated swine;
(10)     Utilizing a term that is the same as or similar to a term that has been used or defined historically in reference to a specific agricultural product. . . .

[As you can see, the successful as-applied challenge to (5) does directly implicate FDA’s power, although there is no indication in this record that FDA considers Tofurkey to be in violation.]

The stated legislative purpose of the law was to protect consumers from being misled or confused by false or misleading labeling of agricultural products that are edible by humans.  As applied, it barred Tofurky from using words like “meat,” “beef,” “chorizo,” “sausage,” and “roast” to describe its plant-based meat products, since there was no exception for plant-based meat producers that clearly identify their products as being vegetarian, vegan, or made from plants.  Each violation was punishable by a civil penalty of up to $1,000. Although the relevant agency didn’t intend to begin enforcement of the subsections challenged by Tofurky until this dispute was resolved, the parties have not entered into a non-prosecution agreement, and the State didn’t contend that Tofurky would not face retroactive liability. Unsurprisingly, the court found that Tofurkey had standing and that it should not abstain.

Tofurkey brought both facial and as-applied challenges; facial challenges are hard to win, especially since the overbreadth doctrine doesn’t apply to commercial speech. Thus, the court confined its analysis to Tofurkey’s as-applied challenge.

On to Central Hudson: Arkansas argued that Tofurkey’s labels were inherently misleading because they use the names and descriptors of traditional meat items but do not actually include the product they invoke, including terms like “chorizo,” “hot dogs,” “sausage,” and “ham roast.” Moreover, Tofurky designs its food products to approximate the texture, flavor, and appearance of meat derived from slaughtered animals, which would further the misleadingness. 

Tofurkey responded that words such as “meat,” “burger,” and “steak” have been used for decades—and in some cases centuries—to describe foods that are not made from slaughtered animals, and that its labels clearly identified its products “all vegan,” “plant based,” “vegetarian,” “veggie,” and “made with pasture raised plants” on the front of the packages.  On this record, Tofurkey’s speech wasn’t inherently misleading. “[T]he simple use of a word frequently used in relation to animal-based meats does not make use of that word in a different context inherently misleading,” especially given the label disclosures. For example, the “Veggie Burger” label used “veggie” to motify “burger” and included the words “all vegan” in the middle of the and “white quinoa” next to a picture of the burger. Tofurky was likely to prevail on its argument that the labels’ repeated indications that its packages contain no animal-based meat dispelled consumer confusion and rendered the speech not inherently misleading. “[T]his is not a case of key information in minuscule type buried deep among many ingredients.”  Reasonable consumers would not disregard all those other words, any more than they’d think that “flourless chocolate cake contains flour, or that e-books are made out of paper.”  Nor was there evidence that consumers or potential consumers had been misled by the packaging, labeling, or marketing.

The court analogized to Ocheesee Creamery LLC v. Putnam, 851 F.3d 1228 (11th Cir. 2017), which helt that plaintiffs’ use of the term skim milk wasn’t inherently misleading just because it conflicted with the State’s definition of “skim milk,” according to which skim milk had to include replenished vitamin A. While “[i]t is undoubtedly true that a state can propose a definition for a given term …, 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.”

Because the speech wasn’t false or inherently misleading, the court moved to the rest of Central Hudson’s test.  The court assumed without deciding [!] that the state had a substantial interest in “protect[ing] consumers from being misled or confused by false or misleading labeling of agricultural products that are edible by humans.”  But the law didn’t, as required, “directly and materially” advance that interest, because Tofurkey’s speech was neither false nor misleading. And the challenged provisions were likely “more extensive than necessary to serve the State’s interest.” Although the state isn’t required to show that its restriction is the least restrictive means possible, the “blanket” restriction in the Arkansas law was “far more extensive than necessary, and Arkansas “disregard[ed] far less restrictive and precise means” for achieving its stated purpose, such as laws directed at prohibiting deceptive labeling and marketing of food products, and consumer products more generally. “There also is no convincing argument as to why each of these laws is ineffective at policing the alleged deceptive or confusing practices the State purports to target.” In addition, if it was still worried about “fake meat” in general, the state “could require more prominent disclosures of the vegan nature of plant-based products, create a symbol to go on the labeling and packaging of plant-based products indicating their vegan composition, or require a disclaimer that the products do not contain meat.”

Because of this analysis, the court declined to consider whether the real purpose of the law was to benefit the meat industry against a competitor.

So, the court held that requiring producers to comply with FDA standards of identity is unconstitutional without evidence of producer deceptiveness (provision (5) of the challenged law).  Suppose I want to put random red dye into my food products and list it as FD&C Red Dye No. 3: it is beyond dispute that the average consumer has no idea what’s in No. 3.  Can there be any deception given that incomprehension? Will courts accept the idea that the government can legitimately bootstrap an understanding into existence? (E.g., I don’t know what’s in Red Dye No. 3, but I believe that when Producer A uses the term it will be identical to Producer B’s use, making variant uses deceptive.)

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