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Meat Industry Loses Round 2 in Country-of-Origin Labeling Challenge

<p>The American Meat Institute is unlikely to succeed on its claims challenging the Mandatory Country of Origin Labeling (COOL) rule, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit held.</p>

WASHINGTON—The meat industry has lost another round in its legal challenge of 2013 regulations that require certain meats specify the country where an animal was raised, born and slaughtered.

The March 28, 2014 ruling by a federal appeals court leaves in tact the Mandatory Country of Origin Labeling (COOL) rule, which the Agriculture Marketing Service (AMS) adopted.  AMS' rule also prohibits comingling of meat cuts, which means meats that derive from different countries cannot be combined in the same package for retail, according to a lawsuit the American Meat Institute (AMI) and other organizations filed last year

AMI argued the rule violated the First Amendment, exceeded the authority of AMS, an agency within the U.S. Department of Agriculture (USDA), and was arbitrary and capricious because it imposed undue burdens on the industry. Several organizations joined AMI in the lawsuit, including the American Association of Meat Processors, Canadian Cattlemen’s Association, Canadian Pork Council, Confedaracion Nacional de Organizaciones Ganaderas, National Cattlemen’s Beef Association, National Pork Producers Council, North American Meat Association and the Southwest Meat Association. 

“We disagree strongly with the court’s decision and believe that the rule will continue to harm livestock producers and the industry with little benefit to consumers," AMI Interim President and CEO James H. Hodges said in a statement. “At this point we are evaluating our options moving forward."

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) held that AMI is unlikely to succeed on its claims challenging the COOL rule, affirming a lower court ruling that refused to preliminarily block implementation of the rule.

"AMI’s argument that the rule unlawfully 'bans' commingling fails at a key first step—the 2013 rule does not actually ban any element of the production process. It simply requires that meat cuts be accurately labeled with the three phases of production named in the statute," Senior Circuit Judge Stephen Williams wrote. "It appears that under current practices meat packers cannot achieve that degree of accuracy with commingled production."

The lawsuit, filed last year in the U.S. District Court for the District of Columbia, argued the rule failed to offer any public health or food-safety benefits. According to the complaint, the government estimates the rule could impose up to roughly $192 million in costs on the meat industry.

The costs will be incurred mostly by packers and processors of muscle cut covered commodities and retailers subject to requirements of the rule, according to AMS. The agency has estimated the rule could cost anywhere from  $53.1 million to $192.1 million with a midpoint of $123.3 million.

Other organizations have intervened in the case as supporters of the COOL rule, including the United States Cattlemen's Association (USCA), National Farmers Union, American Sheep Industry Association and Consumer Federation of America.

It's possible AMI will ask the entire D.C. Circuit Court to hear the case. If that occurs, "USCA will continue to defend the revised regulations before the Court," the cattlemen's organization said. "Defending COOL is USCA's highest priority and we are prepared for any eventuality."

AMS adopted a COOL rule in 2009, but Canada and Mexico challenged it before the World Trade Organization (WTO). According to the D.C. Circuit Court, the organization found the rule violated a WTO Agreement on Technical Barriers to Trade and AMS was given until May 23, 2013 to bring the rule into compliance.

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