By Benjamin Goad - 03/28/14 12:10 PM EDT
A federal court on Friday rejected a legal challenge to Agriculture Department regulations requiring country-of-origin labeling (COOL) on cuts of meat sold in the United States, delivering a major setback to industry groups that oppose the rule as costly and unwarranted.
The D.C. Circuit Court of Appeals, second only to the Supreme Court in its influence, tossed out the industry bid for an injunction blocking the rule, siding with the Obama administration’s contention that they are supported by a compelling public interest.
The ruling comes in response to a challenge from a group of nine meat processing and packing trade groups, led by the American Meat Institute. On Friday, AMI blasted the ruling.
“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,” said AMI interim President James H. Hodges. “At this point we are evaluating our options moving forward.”
The industry has warned the regulations would be economically devastating and would potentially drive some meat processors out of business.
The groups argue that the regulations exceed the USDA’s statutory authority, and violate businesses’ First Amendment protection from compelled speech, since they would require costly labeling systems on meat that would not directly further a government interest.
“AMI argues that the rule merely satisfies consumers’ curiosity,” the court wrote in a 15-page decision. “But we can see non-frivolous values advanced by the information.”
The court cited case law that providing businesses with only minimal First Amendment interests when it comes to “not providing purely factual information.”
“The necessary changes to production are, to be sure, costly for the packers,” the court found, adding that such changes are a common result of warranted government regulation.
Issued a year ago and finalized in May, the so-called COOL regulations require that meat packaging give more information about where the animals were born, raised and slaughtered.
Under the rule, the label on a cut of beef could theoretically read “Born in Mexico, raised in Canada, slaughtered in the U.S.A.”
The rule serves two purposes: to provide consumers with more information, and to bring the United States in compliance with international standards. The World Trade Organization (WTO) ruled in late 2012 that previous labeling practices were unfair to Mexico and Canada.
The two countries, the United States’ top two meat trading partners, could retaliate with damaging tariffs if the WTO determines the new rules do not meet international standards. The WTO has yet to weigh in on the 2013 fix.
In blocking the injunction, the court did not take the WTO issues into consideration.