En Banc DC Circuit Upholds COOL Labeling Requirement Against First Amendment Challenge

Professor Ruthann Robson, City University of New York (CUNY) School of Law

In a 71 page opinion with two dissenting opinions for two judges, the District of Columbia Circuit en banc clarified the First Amendment standard for labeling requirements in American Meat Institute v. U.S. Department of Agriculture. 

Recall that the COOL - - - country of origin label - - - as applied to meat was explained by the DC Circuit as newly requiring the "production step," so that

instead of saying, “Product of the United States,” a label for Category A meat will now read, “Born, Raised, and Slaughtered in the United States.” Similarly, Category B meat might now have to be labeled, “Born in X, Raised and Slaughtered in the United States,” and Category C meat “Born and Raised in X, Slaughtered in the United States.”

The basic issue is a choice of precedent one: Should the consumer disclosure principle of  Zauderer v. Office of Disciplinary Counsel (1985) control or should the more rigorous ordinary commercial speech test of Central Hudson govern?

The panel's relatively brief opinion chose Zauderer and upheld the rule against the meat industry's First Amendment challenge, but the DC Circuit rather quickly vacated the opinion and granted en banc review. The panel itself noted that other panel opinions might be read to the contrary and suggested the "full court hear this case en banc to resolve for the circuit whether, under Zauderer, government interests in addition to correcting deception can sustain a commercial speech mandate that compels firms to disclose purely factual and non-controversial information."

The en banc opinion now holds "that Zauderer in fact does reach beyond problems of deception, sufficiently to encompass the disclosure mandates at issue here."  In so doing, it explicitly overruled R.J. Reynolds Tobacco Co. v. Food & Drug Admin decided in 2012.

As the DC Circuit reasoned,

Zauderer itself does not give a clear answer. Some of its language suggests possible confinement to correcting deception. Having already described the disclosure mandated there as limited to “purely factual and uncontroversial information about the terms under which [the transaction was proposed],” the Court said, “we hold that an advertiser's rights are adequately protected as long as [such] disclosure requirements are reasonably related to the State's interest in preventing deception of consumers.” (It made no finding that the advertiser's message was “more likely to deceive the public than to inform it,” which would constitutionally subject the message to an outright ban. See Central Hudson. *** The language with which Zauderer justified its approach, however, sweeps far more broadly than the interest in remedying deception. After recounting the elements of Central Hudson,Zauderer rejected that test as unnecessary in light of the “material differences between disclosure requirements and outright prohibitions on speech.” Later in the opinion, the Court observed that “the First Amendment interests implicated by disclosure requirements are substantially weaker than those at stake when speech is actually suppressed.” After noting that the disclosure took the form of “purely factual and uncontroversial information about the terms under which [the] services will be available,” the Court characterized the speaker's interest as “minimal”: “Because the extension of First Amendment protection to commercial speech is justified principally by the value to consumers of the information such speech provides, appellant's constitutionally protected interest in not providing any particular factual information in his advertising is minimal.” All told, Zauderer 's characterization of the speaker's interest in opposing forced disclosure of such information as “minimal” seems inherently applicable beyond the problem of deception, as other circuits have found.

Thus, the DC Circuit has resolved an important conflict and erected an obstacle for First Amendment challenges to labeling regulations.