NINE U.S., Canadian and Mexican meat and livestock organizations filed their initial brief as part of an appeal of a Sept. 11 decision by the U.S. District Court for the District of Columbia denying a motion for a preliminary injunction in a lawsuit to block implementation of the U.S. Department of Agriculture's May 2013 final rule on country-of-origin labeling (COOL).
Appellants include the American Association of Meat Processors, American Meat Institute, Canadian Cattlemen's Assn., Canadian Pork Council, National Cattlemen's Beef Assn., National Pork Producers Council, North American Meat Assn. (NAMA), Southwest Meat Assn. and Mexico's National Confederation of Livestock Organizations.
NAMA reported that the court has granted an expedited schedule. The appellants are seeking a decision by Nov. 23, when enforcement is scheduled to begin. The court is under no obligation to decide the case prior to that date, and it has not committed to doing so, NAMA said, although the briefs made clear that is desirable.
First briefs were being submitted Sept. 23. The government and the appellee-intervenors (U.S. Cattlemen's Assn., National Farmers Union, American Sheep Industry and Consumer Federation of America) will file their opposition briefs on Oct. 23, and the appellants will file their reply brief on Nov. 1. The court date for oral arguments will then be scheduled as soon as possible after Nov. 1, NAMA reported.
The brief argues that the trial court incorrectly accepted the Agricultural Marketing Service's (AMS) argument, which was inconsistent with the rationale offered by AMS in the final COOL rule, that the new final rule "is to correct misleading speech and prevent consumer deception" that purportedly occurred because of requirements AMS imposed in its 2009 version of the rule.
"Even putting aside the absurdity of a government agency referring to itself as an agent of 'deception,' the district court should have rejected AMS's belated declaration because it was a plainly impermissible post hoc rationalization. Yet, the district court accepted it anyway," the brief notes.
The appellants also contended that when the trial court accepted AMS's rationalization, it applied the wrong legal standard regarding the First Amendment and compelled speech because the mandated labels at issue are not voluntary deceptive advertising.
In their complaint, the plaintiffs explained that the final rule violates the U.S. Constitution by compelling speech in the form of costly and detailed labels on meat products that do not directly advance a substantial government interest.
They also claimed that the 2013 regulation exceeds the scope of the statutory mandate because the statute does not permit the kind of detailed and onerous labeling requirements the final rule puts in place and that the rule is arbitrary and capricious because it imposes vast burdens on the industry with little to no countervailing benefit.
As the domestic case moves forward, the World Trade Organization continues to examine the merits of the updated COOL rule regarding its impact on trade with Canada and Mexico.
NAMA and six other U.S. trade associations wrote to Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Ambassador Michael Froman Sept. 23 to request that enforcement of the COOL final rule be delayed until the resolution of the WTO dispute, which may not be until sometime in 2014.
"Staying enforcement until the WTO dispute is resolved will reduce the uncertainty that the entire meat supply chain faces in complying with a regulation that likely will be deemed noncompliant with the United States' WTO obligations," the organizations wrote.
Speaking recently in Calgary, Alb., Canada's International Trade Minister Ed Fast told media that the recent amendment to COOL will further hinder the ability of Canadian cattle and hog producers to freely compete in the U.S., which is why the Canadian government requested the establishment of the WTO compliance panel and released a list of possible retaliatory measures.
Fast said U.S. COOL is "offsides," and Canada will impose prohibitive tariffs on U.S. goods if COOL is not fixed. Canada has said it would seek retaliatory compensation of approximately $1.1 billion on U.S. commodities.
"I think you get the drift: We mean business on COOL," Fast said. "Along with industry across the continent, we will continue to fight against this unfair treatment. We will continue to press the U.S. to implement a legislative, not regulatory, solution that eliminates the discrimination against foreign livestock in the United States. The United States must bring its COOL measure in line with its WTO obligations."
A newsletter for the Canadian Cattlemen's Assn. noted that the pending U.S. farm bill might be the "most logical legislative vehicle" by which to make a change to COOL, and the group "hopes that the conferees will seize the opportunity to takes thousands of U.S. jobs out of jeopardy and head off retaliation by Canada and Mexico on U.S. exports."
Although amendments were debated within the Senate and House agriculture committees during farm bill markups regarding COOL, nothing was agreed upon.