A federal appeals court ruled 2-1 to affirm the dismissal of a case brought by cattle ranchers over the alleged mislabeling of beef as a “Product of the U.S.A.”
The class-action lawsuit was brought by ranchers Robin Thornton and Michael Lucero on behalf of a class of beef consumers against Tyson Foods, Cargill Meat Solutions, JBS USA Food Company, and National Beef Packing Company. The plaintiffs argued that it is unfair for beef to be labeled “products of the U.S.A.” when the cattle involved are raised overseas, and brought to the U.S. only for slaughter.
As attorney Blair Dunn explained the issue during oral arguments, cattle are brought onto American soil where they stand for minutes or hours, “Then they’re still receiving that same label, even though they didn’t really breathe much of the air here in this country, or eat much of the feed here.” That label, in turn, allows the “American” beef to fetch a premium price—a practice that is unlawfully deceptive under New Mexico law.
The legal issue central to the appeal, though, was whether the plaintiffs had the right to bring their state misleading labeling claims when defendants’ actions complied with federal regulations. A three-judge panel of the U.S. Court of Appeals for the 10th Circuit upheld the lower court’s decision, ruling that the plaintiffs’ argument was preempted by federal law, as it amounted to a desire to create standards “different from what the Food Safety and Inspection Service has already approved as consistent with the Federal Meat Inspection Act.”
Circuit Judge Nancy Moritz, a Barack Obama appointee, authored the 21-page opinion, which was joined by George W. Bush appointee Chief Circuit Judge Timothy Tymkovich. Moritz rejected the plaintiffs’ argument that New Mexico State law and federal law were sufficiently different as to allow a state law mislabeling claim to proceed even when defendants complied with USDA regulations. Moritz wrote:
In sum, each of plaintiffs’ state-law labeling claims—unjust enrichment, breach of warranty, violation of the UPA, and violation of state antitrust law— attempt to establish a labeling requirement different than that imposed and approved by the USDA and the FSIS under federal law.
Moritz’s opinion, however, was not without its criticism of the current labeling standards. She pointed out that those standards are a recent change that has been extremely problematic:
Notably, this permissive interpretation of what qualifies as a “Product of the U.S.A.” has not always been the governing standard; from 2008 to 2015, Congress took a more restrictive approach to country-of-origin labeling. Specifically, in 2008, Congress implemented a new law that established four categories for country-of- origin labeling: United States origin, multiple countries of origin, imported for immediate slaughter, and foreign country of origin. But this new law generated several years of international-trade issues with Canada and Mexico, including two disputes before the World Trade Organization and more than $1 billion in retaliatory tariffs imposed against the United States.
Circuit Judge Carlos Lucero (a Bill Clinton appointee who is unrelated to the plaintiff of the same surname) dissented, in what he humorously referred to as, “a meaty question of statutory interpretation.” Lucero wrote that Congress could not have intended to foreclose state regulation of false and misleading meat labeling, and argued that the applicable statute “expressly creates concurrent state jurisdiction” with federal regulations.
Lucero called the case “a paradigmatic example of the federal-state balance Congress intended” in enacting the Federal Meat Inspection Act (FMIA). He continued, arguing that if consumers are, indeed, deceived by the label “Product of the U.S.A.,” then that label violates both the FMIA and the USDA’s regulations. In that context, Lucero wrote, “Congress most assuredly could not have intended to rubber stamp deception as to the national origin of beef.”
