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Appeals Court to Re-hear COOL Case

Published on: 13:21PM 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