April 4 (Bloomberg) -- Meat producers including Hormel Foods Group Inc. will get another chance to challenge country-of-origin labeling rules in a case pitting corporate free-speech rights against the government’s regulatory reach.
The U.S. Court of Appeals in Washington today threw out a March 28 ruling by a three-judge panel upholding the Department of Agriculture’s labeling requirements so all 11 judges on the court can reconsider a constitutional question of corporate free speech: Can regulators require labels only that “correct a deception” such as false advertising or can they demand data for other purposes such as addressing consumer confusion?
The regulations, which were adopted in May and took full effect in November, require producers to specify the country or countries where an animal was born, raised and slaughtered. Retail packages can’t mix muscle cuts from different countries under a general label.
Country-of-origin labeling forces meat producers to segregate animals and raises costs, according to the American Meat Institute and other opponents. They also argue the government doesn’t have a good enough reason to override their free speech rights and force them to make statements against their will, a contention the appeals court panel rejected.
“Admittedly, there’s consumer curiosity” about the origin of meat products, said Mark Dopp, general counsel of the meat institute, the Washington-based meat industry group leading the challenge to the rules. “But we don’t feel that rises to the level of a compelling government interest” that would be needed to justify the labeling mandate, he said.
The Consumer Federation of America argued in court papers supporting the government that the rule’s aim “to lessen confusion” is enough reason to compel labels that put factual statements on packages.
“Congress recognized that such confusion was particularly acute in the case of meat products,” the group said.
Allison Price, a spokeswoman for the Justice Department, which is defending the rule, declined to comment in an e-mail.
In deciding to re-hear the free speech issue, the court followed the panel’s urging that the entire court resolve which of two earlier cases should set the standard on corporate free speech in the circuit.
The panel’s ruling sustained a decision by U.S. District Judge Ketanji Brown Jackson in September rejecting the meat groups’ bid to block the rules pending a trial on the merits of their case.
The case is American Meat Institute v. U.S. Department of Agriculture, 13-cv-5281, U.S. Court of Appeals, District of Columbia, (Washington).
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