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CENTER FOR SCI. IN THE PUB. INTEREST v. DEPARTMENT

February 9, 1983

CENTER FOR SCIENCE IN THE PUBLIC INTEREST, et al., Plaintiffs,
v.
DEPARTMENT OF THE TREASURY, et al., Defendants



The opinion of the court was delivered by: PRATT

 JOHN H. PRATT, District Judge.

 Plaintiffs, the Center for Science in the Public Interest (CSPI), a consumer health organization, and two individual consumers brought suit under the Federal Alcohol Administration Act and the Administrative Procedure Act against the Department of the Treasury (the Department) for rescinding alcoholic beverage ingredient disclosure regulations. *fn1" These regulations, promulgated in 1979, were designed to inform consumers, especially those with allergies, of the contents of alcoholic beverages. Defendant Wine Institute was permitted to intervene in support of the Department's decision to rescind and Banfi Products Corporation filed a brief as amicus curiae in support of plaintiffs' position. The case is now before us on the parties' cross-motions for summary judgment.

 I. History of the Action

 A. Statutory Background

 The statutory authority for the Treasury Department's regulation of alcoholic beverages [which it exercises through the Bureau of Alcohol, Tobacco, and Firearms (BATF)], is the Federal Alcohol Administration Act, 27 U.S.C. § 201 et seq. (1976) (the Act). The Act, originally passed in 1935, directs the Secretary of the Treasury to prescribe regulations

 
. . . with respect to packaging, marking, branding, and labeling and size and fill of container (1) as will prohibit deception of the consumer with respect to such products or the quantity thereof and as will prohibit, irrespective of falsity, such statements relating to age, manufacturing processes, analyses, guarantees, and scientific or irrelevant matters as the Secretary of the Treasury finds to be likely to mislead the consumer; (2) as will provide the consumer with adequate information as to the identity and quality of the products, the alcoholic content thereof . . . the net contents of the package, and the manufacturer or bottler or importer of the product. . . .

 27 U.S.C. § 205(e) (1976).

 At the time the Act was passed, the Director of the Federal Alcohol Control Administration, predecessor of BATF, explained the congressional intent of Section 205(e):

 
Now, the provisions of this bill show that the purpose was to carry that regulation into certain particular fields in which control of interstate commerce in liquors was paramount and necessary . . . .
 
These regulations were intended to insure that the purchaser should get what he thought he was getting, that representations both in labels and advertising should be honest and straightforward and truthful. They should not be confined, as the purefood regulations have been confined, to prohibitions of falsity, but they should also provide for the information of the consumer, that he should be told what was in the bottle, and all the important factors which were of interest to him about what was in the bottle.

 HEARINGS ON H.R. 8539 BEFORE THE HOUSE COMMITTEE ON WAYS AND MEANS, 74th Cong., 1st Sess. 10 (1935) (statement of Joseph H. Choate).

 On February 25, 1979, BATF, in order to implement its statutory mandate, published several proposed regulations calling for ingredient labeling in the Federal Register. Congress was aware of BATF's decision. In 1979, after the BATF announcement, the House Committee on Appropriations attempted to prohibit the expenditure of funds in connection with the promulgation of such regulations. H.R.REP. No. 248, 96th Cong., 1st Sess. 10 (1979). The Senate Committee on Appropriations, however, supported the proposed regulations:

 
On February 25, 1979, the Bureau published in the Federal Register several proposed regulations which would require the ingredient labeling of alcoholic beverages. The Committee believes that these regulations, accommodated for the substantive points raised by the industry and other interested parties, should be of benefit to the public.

 S.REP. NO. 299, 96th Cong., 1st Sess. 12 (1979):

 The Conference report reflects that the limiting amendment proposed by the House was rejected.

 
Amendment No. 7: Deletes language proposed by the House and stricken by the Senate which prohibits the use of funds for issuing or carrying out proposed rules on labeling of wine, distilled spirits and malt beverages.

 H.R.CONF.REP. NO. 471, 96th Cong., 1st Sess. 6 (1979).

 B. Promulgation of the Ingredient Labeling Regulation

 BATF has been considering ingredient labeling proposals for the last decade. It first proposed such regulations in 1974 but no final rule was promulgated at that time. The regulations which were proposed in February, 1979 and are the subject of this suit were published and a final rule was issued on June 13, 1980. *fn2" BATF explained that:

 45 Fed.Red. 40538 (1980).

 In its final publication on June 13, 1980 in the Federal Register, BATF devoted six pages to explaining its reasons for issuing the regulations. It detailed the steps of its Regulatory Analysis, which included an outline of the possible steps that could be taken to deal with the problem of ingredient disclosure, a consumer poll, and a cost-benefit study conducted by the BDM Corporation, a private consultant hired by BATF. The Bureau also received 1,873 comments in response to Notice No. 314 from consumers, special interest groups, industry members, doctors, government agencies, and members of Congress.

 The BDM study emphasized that widely different conclusions could be reached concerning the value of ingredient labeling, depending on the assumptions ...


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