THE domestic challenge to the U.S. Department of Agriculture's mandatory country-of-origin labeling (COOL) rule had its day in court Aug. 27, when oral arguments were heard from groups both for and against the law as well as from USDA.
The judge indicated that a decision on the injunction would come within 14 days after the hearing and will be important in the final months before packers and processors meet to abide by an updated COOL rule that USDA released in May.
The oral arguments first debated a preliminary injunction on whether or not to allow USDA to move forward with implementation of a rule that would require labels in the meat case indicating where an animal is born, raised and slaughtered.
Plaintiffs argued that the COOL rule violates their First Amendment rights by compelling speech, exceeds USDA's authority and breaks the Administrative Procedures Act by being arbitrary and onerous.
The plaintiffs, led by the American Meat Institute, include the National Cattlemen's Beef Assn., North American Meat Assn., Canadian Cattlemen's Assn., Canadian Pork Council, National Pork Producers Council, American Association of Meat Processors, Southwest Meat Assn. and Mexico's National Confederation of Livestock Organizations.
Although lawyers for the American Meat Institute brought up at the hearing the current World Trade Organization challenge of the COOL law by Mexico and Canada, each case is challenging different aspects of the law. The WTO case questions whether the law complies with international obligations, whereas the domestic case mostly focuses on the constitutional issue of free speech.
The National Farmers Union was granted intervener status and has been a longtime advocate of consumers' right to information provided under COOL.
At the hearing, National Farmers Union vice president of government relations Chandler Goule said he was thoroughly impressed with U.S. district court Judge Ketanji Brown Jackson's depth of knowledge of the briefs.
"She knows the issue very well. During the hearing, the plaintiffs did raise some good points, and the government refuted the different elements of why the rule needs to be changed," Goule said.
Goule was a congressional staffer under then-House Agriculture Committee chair Collin Peterson (D., Minn.) during the 2008 farm bill writing process that required a compromise on COOL, which was first written into the 2002 farm bill.
One of the complaints from the domestic meat industry is that the current rule comes nearly full circle to what was originally rejected after the 2002 farm bill. For instance, packers can now label product as commingled, even if it is produced solely in the U.S.
Goule said packers and processors have the means to trace each individual package of meat, especially considering the many voluntary initiatives such as Certified Angus Beef or naturally raised.
Plaintiffs argued that mandating labeling from the government is not as effective as the voluntary programs, which use the market as an incentive to make up for the cost differences associated with labeling.
Nick Giordano, vice president and counsel for international affairs at the National Pork Producers Council, noted that how the judge rules on the preliminary injunction could also provide insight into how a final ruling on the merits of the case will unfold.
"If a preliminary injunction is granted, that means it is more likely that the judge is going to find against the rule and in favor of the petitioning meat industry," Giordano said.
If the court doesn't enjoin the rule or stop implementation, he said the industry would be "pulled through a keyhole and made to make changes that could cause economic dislocations in the industry." Also, this would become partially unnecessary if WTO eventually rules against COOL.
Giordano said it is "very likely" that WTO will rule against the U.S. in the second or third quarter of 2014.
Canada officially called for a compliance panel review of the rule, and depending on the findings, it is expected that another appellate panel will have to examine the ruling as well.