Sep 19, 2014
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April 2014 Archive for Ag in the Courtroom

RSS By: John Dillard,

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.




Lawyer Up! Vermont legislature passes GMO labeling bill

Apr 24, 2014

Yesterday, Vermont's legislature became the first state in the Union to pass a GMO labeling bill that is not contingent on other states passing similar legislation. Vermont's governor, Peter Shumlin, who has expressed reservations about the bill, is expected to sign the legislation into law. The law, which will not go into effect until July 1, 2016, requires food packages containing genetically-engineered ingredients sold at retail to contain a label indicating the presence of such ingredients. The law exempts meat, poultry and dairy products from animals fed GMO feed from its labeling requirements. It also exempts alcohol and food sold by restaurants and cafeterias.

The proponents of the legislation believe that this law is necessary because consumers have the right to know whether their food contains GMO ingredients. They also believe that the labeling initiative is important to protect organic farms from cross-pollination (although the bill does nothing to prevent cross-pollination). To support their argument that labeling is necessary, the legislature pointed to the fact that FDA does not conduct its own studies on the health effects of GMOs, nor does it conduct epidemiological studies on these crops. However, the legislation fails to mention that FDA does not conduct independent studies on the safety of any other new food product it approves. Also, my research efforts have also failed to find any evidence that FDA conducts long-term epidemiological studies on carrots.

Vermont has a history of passing labeling legislation that is ultimately rejected by federal courts for violating the First Amendment. For instance, when the anti-corporate cause du jour was labeling milk that contained rBST hormones, Vermont passed a first-in-the-nation labeling law. However, this law was promptly overturned because the state could not demonstrate that rBST milk differed from conventional milk in terms of health or safety effects, and accordingly, the state had no substantial interest in requiring a label.

Vermont's legislature is once again on vulnerable legal ground with its GMO labeling legislation. It has no science on its side indicating that GMO products are less healthy or safe than their conventional counterparts. Furthermore, labeling cannot advance the legislature's stated interest in protecting organic farms from cross-pollination with GMO crops. Even the state's Attorney General has expressed concern that his office may not be able to defend the legislation in court. 

Due to the law's tenuous legalality and near certainty that it will face a constitutional challenge, the legislature appropriated $1.5 million to Vermont's Attorney General office to defend the law. Additionally, the legislature is allowing private donors to contribute to the cost of defending the law. Those with a financial stake in stigmatizing GMOs, including large organic food companies, will likely open their coffers to the fund.

The litigation that will result from this law will be drawn out and likely go through at least one round of appeals. At this point, its impossible to absolutely guarantee which side of the issue will come out on top. But with this much at stake on both sides of the labeling issue, I can predict one group that will walk away winners - lawyers.

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.

Appeals Court to Re-hear COOL Case

Apr 04, 2014

 The suit brought by livestock and meatpacking groups against USDA's mandatory Country-of-Origin Labeling (mCOOL) rule lives to fight another day. A panel of the active judges (known in the legal world as an "en banc" panel) sitting on the D.C. Circuit Court of Appeals entered an order today (4/4/14) to vacate the D.C. Circuit's decision to uphold USDA's COOL Rule. The entire panel of the active judges on the D.C. Circuit will re-hear the case on May 19th.

As I mentioned in my assessment of the Circuit Court's original decision on the case, the original panel of judges suggested that the issue of whether mCOOL violated the First Amendment should be heard before an en banc panel. This unprecedented suggestion tipped off the reader that the Court was not confident that their fellow judges necessarily agreed with their findings.

The issue that the en banc panel will re-hear pertains to whether the government has a sufficient justification under the First Amendment to require mCOOL. The Court's original mCOOL decision departed from D.C. Circuit precedent, which had held that mandatory labeling regimes similar to mCOOL were only allowed to prevent or remedy consumer deception. Even though mCOOL is not designed to prevent or remedy consumer deception, the Court held that it is valid because it enables consumers to make purchasing decisions on the basis of protectionism.

The en banc panel's order requests the parties to submit briefs on the issue of whether the mCOOL decision should be governed by the Central Hudson standard or the Zauderer standard. Under the Central Hudson standard, the government is only allowed to compel commercial speech if the mandate serves a "substantial" governmental interest. As the name indicates, substantial governmental interests are not a dime a dozen. Substantial governmental interests generally involve protection of health and safety, and certainly do not involve "empowering" consumers to make protectionist choices.

The Zauderer standard is much easier to achieve, but it is only available to the government in certain circumstances. Under Zauderer, a goverment can require labeling of "factual and non-controversial" information. However, the D.C. Circuit has only allowed Zauderer to be used as a justification in instances where the mandatory disclosure prevents or remedies consumer deception. 

Drawing inferences from a Court's actions in circumstances like this is a risky proposition. However, it is clear that a majority of the D.C. Circuit's judges believe this issue needs a second look. I'll be following up on this issue as developments unfold.

A copy of the D.C. Circuit's order is below:

PER CURIAM ORDER, En Banc, filed [1487010] that this case will be heard en banc. It is FURTHER ORDERED that the judgment filed March 28, 2014, be vacated. It is FURTHER ORDERED that oral argument before the en banc court be heard at 9:30 a.m. on Monday, May 19, 2014. It is FURTHER ORDERED that, by 4:00 p.m. on April 18, 2014, the parties and amici refile each brief and the appendix initially filed in this case. It is FURTHER ORDERED that, by 4:00 p.m. on April 21, 2014, the parties file simultaneous supplemental briefs, not to exceed 7,500 words each, addressing the following issue: Whether, under the First Amendment, judicial review of mandatory disclosure of "purely factual and uncontroversial" commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), or whether such compelled disclosure is subject to review under Central Hudson Gas & Electric v. PSC of New York, 447 U.S. 56 (1980). 

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



Appeals Court Upholds mCOOL

Apr 01, 2014

On Friday, a unanimous panel of the D.C. Circuit Court of Appeals upheld USDA’s controversial mandatory Country-of-Origin Labeling (mCOOL) rule. The mCOOL rule requires that fresh muscle cuts of beef, pork, lamb and chicken sold at grocery stores must display a label indicating where the source animal was born, raised, and slaughtered. Although this ruling is a setback for the meat and livestock industry, the mCOOL rule is by no means settled. The WTO’s Dispute Settlement Board is in the process of deciding whether the labeling rule violates the United States’ treaty obligations.

Compliance with this labeling regime has created a substantial burden for meat packing operations located near our northern and southern borders because animals must be slaughtered, packaged, and stored separately based on their country of origin categorization. Several packing plants have cited mCOOL compliance as the one of the reasons for shuttering their plants, costing thousands of jobs and causing feedlots to search farther afield to find packing plants to slaughter their cattle.

Several livestock and meat organizations, such as NAMA (Disclosure: OFW Law represents NAMA in this matter), AMI, SMA, NCBA, NPPC as well as Canadian and Mexican livestock groups challenged the regulation in federal court in July 2013, seeking a preliminary injunction against USDA from enforcing the "born, raised, and slaughtered" rule. Several anti-animal agriculture groups, such as HSUS and Food and Water Watch, joined sides with anti-trade agricultural groups, such as U.S. Cattlemen, R-CALF, and National Farmers Union to support USDA’s efforts to defend the labeling regime. USDA and its supporters prevailed on the first round of litigation in September 2013. The plaintiffs immediately appealed the matter to the D.C. Circuit Court of Appeals.

The plaintiffs did not fare any better on the appeal to the D.C. Circuit. The plaintiffs argued that the mCOOL regulation violated Congress’s intent when it banned the practice of commingling products with different country of origin categorizations. Furthermore, the plaintiffs argued that the mCOOL rule violated the First Amendment by compelling commercial speech. The Court ultimately held that USDA had adopted a permissible interpretation of Congress’s intent when it banned the practice of commingling. Furthermore, the Court held that USDA had the authority to require a simple label so long as it contained factual and non-controversial information.

The Court’s ruling was a departure from previous labeling decisions in the D.C. Circuit. In prior decisions, the Court would only allow a government to require a label in instances where the government had a substantial interest (such as health or safety regulation) or to prevent consumer deception. Neither such interests were implicated in mCOOL. The Court, recognizing that its decision to expand the universe of permissible justifications for mandatory labels does not enjoy universal support, took the unprecedented step of suggesting that the case be re-heard anew by the entire panel of active judges on the D.C. Circuit.

Whether the parties will seek a rehearing remains to be seen. Nonetheless, mCOOL still faces a substantial hurdle in the WTO. In fact, mCOOL is no stranger to the WTO.  The first time around, the WTO determined that the prior mCOOL labeling regime, which allowed commingling, needed to be re-written because it discriminated against Canadian and Mexican livestock. Instead of heeding the WTO’s advice, USDA doubled down and eliminated the practice of commingling, which causes further discrimination against Canadian and Mexican livestock. We can expect the WTO to issue its initial decision in this dispute in June 2014.

I’ll be following this matter and posting updates 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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