Latest mCOOL regs will have USDA Singing “O Canada”

Published on: 21:20PM Jun 12, 2013

Canada stands on guard for a lot, and that includes its beef.

I recently had a chance to travel to British Columbia for a conference with state and provincial legislators that chair their respective agriculture committees.  On this trip, I encountered several kind, but candid, Canadians involved in their agricultural sector.  At the tip of everyone’s tongue was "country of origin labeling" and the devastating effect that it has on their livestock industry.  They were madder than that time the Marines marched around with an upside-down maple leaf at the World Series

Because turnabout is fair play, they were almost giddy at the proposed retaliations the Canadian government submitted to the World Trade Organization in response to the U.S.’s Mandatory Country of Origin Labeling (mCOOL) rule.  Another thing the Canadians should be giddy over is our First Amendment.

mCOOL has been flailing around, begging to be put out of its misery, since the 2002 Farm Bill.  While mandatory labeling of meat products by country of origin has been required by statute since 2002, Congress has a habit of speaking out of both sides of its mouth.  It restricted funds for implementing the law until 2008, when fears of tainted Chinese cat food ingredients tipped the scale in favor of putting mCOOL into effect.

In general, the law requires retailers to prominently display the country of origin for packages of beef, pork, chicken and other meat animals.  mCOOL proponents argue that mandatory labeling is necessary to properly inform consumers of where their meat is coming from so that they can make informed choices about which products to purchase.  Skeptics, myself included, argue that mCOOL’s primary purpose is to disrupt international trade by imposing so many regulatory and practical burdens that it is simply easier for American packers to stick to processing American livestock.

mCOOL cannot be defended to our trade partners with a straight face and is not doing American farmers any favors.  The WTO’s Appellate Body rejected the first iteration of mCOOL in 2012, holding that it discriminated against Canadian beef and pork.  As part of the WTO’s ruling, USDA was ordered to either eliminate mCOOL or re-write the regulation so as to not discriminate against international commerce.  This placed the Obama Administration in an awkward position wherein they had to concurrently re-write the mCOOL regulation while lobbying Congress to repeal the labeling law.  It remains to be seen whether Congress will repeal mCOOL in the Farm Bill, but USDA did re-write the mCOOL rule.  The new mCOOL rule is not much better than its predecessor; it requires additional burdesome labeling and is quite vulnerable to a WTO challenge for putting a technical trade barrier in place.

The new mCOOL rule is also vulnerable to a challenge under our First Amendment.  As we know, the First Amendment guarantees the right to free speech.  Encompassed in the right to free speech is the right to refrain from speech.  Commercial speech, such as advertising and labeling, is also protected by the First Amendment.

Mandatory labeling laws force or compel companies to engage in commercial speech.  We see compelled commercial speech on a daily basis.  Product warnings, nutrition labels, and exit signs are examples of compelled commercial speech (come to think of it, the government really takes the fun out of silica gel packets).  However, the government must clear multiple hurdles before it can compel commercial speech such as mandatory labeling laws.  One of those hurdles is proving that the government has a substantial interest in requiring mandatory labels.

In this instance, USDA states that its interest in requiring mandatory labels is to "provide consumers with more specific information."  USDA does not take the position that meat from one country is healthier than another, or that labels should be a warning to consumers.  In other words, the primary interest served by mCOOL is satisfying consumer curiosity about the journey that meat has taken to get to their plate. 

Unfortunately for USDA, federal courts have held that compelling commercial speech merely to satisfy consumer curiosity is unconstitutional under the First Amendment.  Such was the case in International Dairy Foods Assoc. v. Amestoy, where the Second Circuit Court of Appeals struck down Vermont’s mandatory rBST-labeling law, which was predicated on the government’s desire to satisfy consumer curiosity about whether their milk was produced by cows that received synthetic hormones.

My guess is that the courts will give mCOOL the same treatment and send this law to pasture.  That will give us something to cheer about on both sides of the border.

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.