The Tenth Circuit recently held that the Federal Meat Inspection Act (FMIA) gets the final word on what “Product of the U.S.A.” means for labels of beef products. Thornton v. Tyson Foods, Inc., No. 20-2124, 2022 WL 727628 (10th Cir. Mar. 11, 2022). The court based its decision on federal preemption, finding that the express preemption provision of FMIA preempted plaintiffs’ deceptive labeling claims under state law.
Case background. Since 2015, defendants including Tyson Foods, Inc. have imported live cattle from other countries, slaughtered and processed the cattle in the United States, and then labeled the resulting beef products as “Products of the USA.” Already-slaughtered beef imported into the country also gets the same label. Plaintiffs, a rancher and a consumer, both argued in their complaints that this practice is misleading, fraudulent, and deceptive under New Mexico law.
At issue is the FMIA, which permits labels that are “not false or misleading” and that the Food Safety Inspection Service (FSIS), an agency of the USDA, has approved. The FSIS has a Policy Book that defines “Product of the U.S.A.” as products that “at a minimum, have been prepared in the United States,” with no requirement that the animals be born or prepared in the United States. The FSIS approved defendants’ beef labels here.
Both the consumer’s and the rancher’s cases were removed to federal court, and the district court granted defendants’ motions to dismiss, concluding that federal preemption barred all of plaintiffs’ state law claims. The district court further concluded that, either way, plaintiffs had failed to state a claim under any of their theories of liability. Plaintiffs appealed the ruling to the Tenth Circuit.
Federal law and express preemption trump. The Tenth Circuit considered analysis of the beef labels under federal law. The court found it “undisputed” that the FSIS approved defendants’ labels “in line with the currently applicable and permissive regulatory framework and meaning of ‘Product of the U.S.A.’” Furthermore, the court found that, because the FSIS approved the beef labels, this approval was a determination that they were not “false or misleading” under the FMIA.
Next, the court evaluated the FMIA’s express preemption provision, which prohibits states from imposing any labeling requirements for meat products that are “in addition to, or different than” the federal requirements. The Tenth Circuit concluded that, because FSIS approval was a determination under federal law, the FMIA’s express preemption provision prohibited any additional arguments under state law.
In dissent, Judge Lucero argued the FMIA set separate, dual requirements—one, for the labels not to be misleading, and two, for the FSIS to approve those labels—and disagreed with the majority’s interpretation that FSIS approval automatically cleared the misleading hurdle under federal law.
State’s concurrent jurisdiction did not change analysis. Plaintiffs also relied on the FMIA’s concurrent jurisdiction provision, which allows states to exercise concurrent jurisdiction regarding labeling requirements, so long as state requirements are “consistent with” the FMIA. This provision, plaintiffs argued, should mean they could still make an argument under New Mexico law. Judge Lucero’s dissenting opinion agreed, as he thought whether the labels were misleading was an open question that should allow plaintiffs to make arguments under state law.
But the court found that this argument, too, was “doomed by the FSIS’s preapproval.” The majority reiterated that “plaintiffs’ concurrent-jurisdiction argument ignores the critical feature of this case”: that defendants’ products were not misbranded under federal law, so there was no open question. An analysis under state law would impose an additional requirement to what federal law calls for. Where federal preemption applies, additional state law analysis is barred.
The court pointed to a recent Ninth Circuit decision, Webb v. Trader Joe’s Co., 999 F.3d 1196 (9th Cir. 2021), in which the court found that federal approval of labels for poultry products preempted plaintiff’s attempt to impose additional requirements for those labels under state law. The court also cited a number of district court decisions and concluded the consensus favored its interpretation that additional analysis under state law is preempted by the FMIA for the beef labels in this case.
Key takeaways. The Tenth Circuit’s decision is a win for defendants. The Tenth Circuit’s determination that federal preemption prohibits additional requirements under state law for beef product labels should prove helpful for defendants facing class actions claims, who seek to limit plaintiffs’ arguments about other federally regulated products. Preemption is a topic that comes up frequently in disputes involving regulated industries like food and food labeling. Given the rise of food litigation in recent years, it is likely to continue to be an issue that parties should be prepared to confront until the cows come home.
Source: Morrison & Foerster LLP - Julie Y. Park and Lydia Davenport
