D.C. Circuit to Hear COOL Case En Banc

By Riëtte van Laack –

Does the same standard that applies when regulators require label statements that “correct a deception,” such as false advertising, also apply when they require label statements for other purposes based on the interests of the government?  This issue will be before the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) en banc in the rehearing of the appeal by American Meat Institute and others (“AMI”) challenging the U.S. Department of Agriculture’s (“USDA’s”) regulations requiring mandatory country of origin labeling (“COOL”) statements.  (See our previous posts here, here, and here.) 

AMI had argued that the government does not have a good enough reason to override the industry’s free speech rights and force them to make statements against their will.  According to AMI, the more demanding test of Central Hudson Gas & Electric v. PSC of New York, 447 U.S.56 (1980) ought to apply rather than the lesser standard of Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), because the COOL regulation was not an anti-deception regulation.  Under Zauderer, a commercial speaker has only a minimal First Amendment interest in not providing purely factual information with which it does not disagree, as long as the mandatory disclosure is reasonably related to the state’s interest in preventing or correcting deception.  The three judge panel of the D.C. Circuit, in a unanimous decision decided to follow other circuits that held that the Zauderer standard applies to more than disclosures that correct deception.  For example, in reaching its decision, the panel noted that the Second Circuit had extended it to “government interests in telling buyers that mercury-containing light bulbs do contain mercury and may not be disposed of until steps have been taken to ‘ensure that [the mercury] does not become part of solid waste or wastewater.’” The Court determined that previous D.C. Circuit decisions that AMI cited in its favor did not apply because those cases did not involve purely factual and uncontroversial information.  However, in a footnote it suggested that the full court hear the case en banc to provide a clear ruling on the issue.

Rehearings en banc are relatively rare.  The D.C. Circuit’s Handbook of Practice and Internal Procedures notes “Federal Rule of Appellate Procedure 35(a) expressly states that en banc hearings are not favored and ordinarily will not be ordered except to secure or maintain uniformity of decisions among the panels of the Court, or to decide questions of exceptional importance.”  Under the Circuit procedures, “[t]he Court sitting en banc consists of all active judges, plus any senior judges of the Court who were members of the original panel and wish to participate.”  Of the court’s senior Judges, only Judge Williams was a member of the original panel. 

On April 4, 2014, the D.C. Circuit issued an order setting the case for rehearing en banc.  Parties are to file supplemental briefs by April 21, 2014 addressing “[w]hether, under the First Amendment, judicial review of mandatory disclosure of ‘purely factual and uncontroversial’ commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer . . . or whether such compelled disclosure is subject to review under Central Hudson.”  Oral argument before the en banc court is scheduled for 9:30 a.m. on Monday, May 19, 2014.