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September 2013 Archive for Ag in the Courtroom

RSS By: John Dillard, AgWeb.com

John Dillard grew up on a beef cattle farm and now works as an agricultural and environmental litigation attorney with OFW Law. His blog analyzes legal issues and court decisions that affect America’s farmers and ranchers.

 

 

 

Livestock & meat groups want COOL relief pending WTO review

Sep 25, 2013

On Monday, a group of trade associations representing the spectrum of America’s beef and pork production system issued an urgent plea to USDA Secretary Tom Vilsack and the Office of the U.S. Trade Representative Ambassador Froman. The coalition wants USDA’s Agricultural Marketing Service to hold off on enforcing new country of origin labeling requirements until the World Trade Organization has an opportunity to hear Canada and Mexico’s challenge to the new regulations.

The groups requesting the delay represent the meat industry, grocers, and livestock producers. They assert that implementation of AMS’s new COOL labeling requirements, which will ban commingling of products with different countries of origin will be disruptive at many different levels of the meat production value chain. The groups indicate that they are concerned that the new labeling scheme is vulnerable to a challenge before the WTO, which would require AMS to re-write the COOL Rule again.

These groups are right to be concerned about a WTO challenge to the COOL Rule. AMS has already had to re-write the COOL Rule once because WTO held that requiring labeling by country of origin discriminated against Mexican and Canadian livestock. The new rule is particularly vulnerable because it takes discrimination against Canadian and Mexican livestock to another level. Not only is meat required to be labeled indicating the country where livestock was born, raised, and slaughtered. The new rule also bans commingled packaging, which provides packers and grocers an incentive to purchase meat that was solely born, raised, and slaughtered in the US.

If WTO finds that the new rule is discriminatory against Canadian and Mexican livestock, then AMS will be required to re-write their COOL regulation or face substantial retaliatory tariffs that target, among other things, US beef and pork. Due the uncertainty of the WTO proceedings, the livestock, grocer, and meat groups requested that USDA delay enforcement of the new COOL Rule pending the outcome of the WTO matter.

Of course, COOL is not an uncontroversial matter and those of us in agriculture are not in consensus on the issue of mandatory COOL. Signatories to the letter to USDA and USTR include American Association of Meat Processors, American Meat Institute, National Cattlemen’s Beef Association, National Grocers Association, National Pork Producers Council,  North American Meat Association (Disclosure: My firm represents NAMA), and Southwest Meat Association. However, some farmer and rancher organizations, such as R-CALF, U.S. Cattlemen’s Association, and the National Farmer’s Union support the new labeling regime.

It remains to be seen whether USDA will consider delaying enforcement of the new COOL Rule. Presently, AMS is poised to begin enforcing the new COOL Rule on November 23, 2013. Regardless of whether USDA budges on its enforcement of the new COOL Rule, the COOL issue will not go away any time soon. In addition to the WTO challenge, the rule is also the subject of a fight between USDA and several meat and livestock trade associations in a federal appeals court.

You can view a copy of the letter to USDA and USTR here.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.  This column is not a substitute for legal advice.

Judge Denies Attempt to Stop New COOL Rule

Sep 11, 2013

Opponents of USDA's new mandatory Country-of-Origin-Labeling (mCOOL) rule received a setback this morning.  A federal judge denied the mCOOL opponents request for a preliminary injunction, which would have halted implementation of the new labeling rule pending ultimate resolution of whether the new mCOOL rule was lawful.

The opponents of the mCOOL rule argued that the new mCOOL compelled speech that was in violation of the First Amendment and that USDA's new rule was an "arbitrary and capricious" agency action that was not in line with Congress' intent in requiring country-of-origin labeling on fresh meat products. Furthermore, the opponents argue that compliance with the labeling requirements will require fundamental structural changes in the American meat industry that will lead to discrimination against Mexican and Canadian livestock. (Disclosure: I represent North American Meat Association, one of the plaintiffs in this matter).  

The new mCOOL rule bans the practice of "commingling" of animals with different countries of origin.  Prior to the new mCOOL rule, meat packages could contain meat from animals with different countries or origin so long as the packaging listed the potential countries of origin for meat products contained in the package.  For instance, a product could be labeled "Product of US & Canada" or "Product of US & Mexico."  Under the new mCOOL rule, packaging must now identify the country where the animal was born, raised, and slaughtered.  Complying with this rule will require meat processors to maintain separate production runs based on the country or origin of the livestock that they slaughter, which can be costly if a plant depends on imported livestock to handle seasonal fluctuations in supply.

Sample COOL label, as mandated by USDA.

A sample illustration of the new mCOOL label

Supporters of the new mCOOL rule argued that the new rule is necessary to provide consumers with more specific information regarding the origin of the meat they are purchasing.  Additionally, they asserted that the new rule was necessary to prevent consumer deception that they felt was present in the earlier rule, which allowed co-mingling of products with different origins.

Ultimately, the judge sided with USDA and the supporters of the new mCOOL rule.  The judge rejected the argument that the First Amendment prohibited compelled speech in the form of mandatory labeling by country or origin.  Instead, the judge held that USDA could require the more-specific labels as a disclosure designed to prevent consumer deception or confusion.

This dispute is likely far from being settled.  The opponents of the new mCOOL rule are expected to appeal this decision.  I will keep you updated on new developments as they occur.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer.  This column is not a substitute for legal advice.

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