Keeping COOL: Court rules USDA still has authority over specific details of labeling law
August 4, 2014
The U.S. court of appeals, on July 29 ruled to uphold the U.S. Department of Agriculture's rulemaking authority when it comes to writing specific details of the U.S. Country of Origin Labeling law.
In 2013 the American Meat Institute filed a lawsuit to halt USDA's implementation of the COOL final rule because of how it would interfere with their marketing methods.
USDA published their 2013 final rule which modified the original labeling requirements in order to bring the law into compliance with World Trade Organization requests from 2012 stating that, among other things, labels needed additional clarification, said Jess Peterson,
The final rule, released in May of 2013 included the following changes to the 2009 COOL law already in effect:
Muscle meat cuts would be required to have separate born, raised and slaughtered origin details when applicable.
Muscle cut commodities of different origins would not be allowed to be co-mingled.
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The definition of a retailer would be revised to include "any person subject to be licensed as a retailer under the Perishable Agriculture Commodities Act."
According to an AMI statement, their 2013 lawsuit, which included fellow plaintiffs 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, explained that they believed the final rule violates the United States Constitution by compelling speech in the form of costly and detailed labels on meat products that do not directly advance a government interest.
They also worried that the 2013 regulation exceeds the scope of the statutory mandate.
Nine of the eleven judges of the D.C Circuit who participated in the en banc review concluded that no First Amendment violation arises under the USDA's 2013 COOL regulations, said a USCA news release.
USCA director Leo McDonnell of Columbus, Mont., said that in this case, NCBA stated that "beef is beef no matter where it comes from." McDonnell said USCA, an intervenor in the lawsuit, disagrees. "Our animal health standards and inspections are much more stringent here than in foreign countries like Brazil," he said.
"There has always been a strong consumer preference for COOL. As we survey consumers, that is the number one criteria – they want to know where their beef comes from. And the courts recognized that this week. This was about freedom of speech, giving us the ability to tell consumers where their products come from."
McDonnell said the ruling was a win for cattle producers as well as consumers. "People need to realize that the COOL law is in effect, it has been for four or five years and it has hardly cost us anything. Our opponents including NCBA say this is costing us a lot of money. If this cattle market and this year's profits are the results of COOL, I say bring on more COOL, I can stand it."
While he considers it a success for the U.S. cattle industry, the court ruling didn't come cheap, McDonnell said. "It is a shame we are fighting this issue. It cost producers a lot of money and a lot of time and energy, but so be it. We are going to do it because we all know the value of differentiating our product in a competitive capitalistic society. COOL enhances competition, it empowers not only producers but it empowers consumers. It's about giving choices and that is what competition does. That is the American spirit."
Representatives from both the South Dakota Cattlemen's Association and Montana Stockgrowers Association, both NCBA state affiliates, mentioned concern over the WTO ruling of USDA's final rule. According to news reports, the WTO ruling has been shared with the U.S., Mexican and Canadian governments but has not been made public.
Jeff Smeenk, SDCA past-president, said he worries about trade disruptions as well as added costs associated with COOL.
"The South Dakota Cattlemen aren't in favor of doing anything that we believe would jeopardize international trade, because we believe that is a big part of why the cattle industry is where it is at today."
The Newell, S.D., cow-calf producer believes COOL is producer-driven, not consumer driven and because beef is already one of the highest priced proteins on the market he worries that labeling will drive the price to unaffordable levels.
"This isn't a consumer health issue. Adding this extra labeling is just going to add more cost to already one of the highest priced proteins in the grocery store," Smeenk said.
On the issue of COOL violating First Amendment rights, Smeenk said, "My opinion is the freedom of speech gives you the right to speak but doesn't say you have to speak. Right now COOL is mandatory so it's telling you that you have to say something." Smeenk said he's not sure if that is the AMI's logic but he believes it likely could be. Smeenk also said he does not know whether NCBA or the other groups will pursue further legal action but that an NCBA meeting is in progress over the weekend so the issue has likely been added to the agenda.
"The court's decision today [July 29] is disappointing. We have maintained all along that the country of origin rule harms livestock producers and the industry and affords little benefit to consumers. This decision will perpetuate those harms," said AMI Interim President and CEO James H. Hodges in an official statement. "We will evaluate our options moving forward."
NCBA affiliate Montana Stockgrowers Association supports labeling programs that promote beef products that are born, raised and processed in the United States. "However, such a program should be reasonable and fair, not adversely affect demand, and in no way cause or encourage the closure of international markets that are important to the cattle producers of Montana and the United States," they said in an official statement. MSGA places great importance on the coming WTO ruling as it relates to the fairness of the USDA COOL program, they said.
Nothing will change regarding the implementation of the COOL law, said Mike Maher, an Isabel, S.D., cattle producer who explains that USDA's 2013 updates to the law have been in effect for over a year.
Maher said COOL is a cut-and-dried issue to him. "Everything we buy is stamped where it's made. Why can't we stamp our food products? Meat is something we eat, it seems more important to label it than even our clothes and things like that."
Maher added that soaring cattle prices are evidence that COOL works in the producer's favor. "COOL opponents claimed last winter that COOL was negatively affecting our markets but I don't know where they've been. We've had record highs in the markets all year long."