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Hormel Foods Corporation v. United States Department of Agriculture

September 8, 2011

HORMEL FOODS CORPORATION, PLAINTIFF,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, DEFENDANT,
FARMLAND FOODS, INC., KRAFT FOODS GLOBAL, INC., PURAC AMERICA, INC., SARA LEE CORPORATION, SMITHFIELD FOODS, INC., AND TYSON FOODS, INC., DEFENDANT-INTERVENORS.



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION

Hormel Foods Corporation, the plaintiff in this civil lawsuit, seeks declaratory and injunctive relief against the United States Department of Agriculture ("USDA") under the Federal Meat Inspection Act, 21 U.S.C. § 601 (2006), the Poultry Products Inspection Act, 21 U.S.C. §§ 453, 458 (2006), and the Administrative Procedure Act ("APA"), 5 U.S.C. § 702 (2006), for the "substantial harm," Complaint ("Compl.") ¶ 32, it claims to have suffered from the alleged failure of the USDA to rescind labels for certain meat and poultry products, Compl. at 1. Currently before the Court is the defendant's motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), or, in the alternative, for summary judgment pursuant to Federal Rule of Civil Procedure 56 ("Def.'s Mot."), as well as the plaintiff's cross-motion for summary judgment ("Pl.'s Mot."). After carefully considering the Complaint, each party's motions, their attachments, and the filings submitted in support of these motions,*fn1 the Court concludes for the following reasons that it must grant the defendant's motion to dismiss the complaint, and deny as moot the plaintiff's cross-motion for summary judgment.

I. BACKGROUND

A. Statutory and Regulatory Framework

Finding it "essential [to] the public interest that the health and welfare of consumers be protected by assuring that meat and meat food products distributed to them are wholesome, not adulterated, and properly marked, labeled, and packaged," Congress passed the Federal Meat Inspection Act ("FMIA") "to prevent and eliminate burdens upon [interstate or foreign] commerce, to effectively regulate such commerce, and to protect the health and welfare of consumers." 21 U.S.C. § 602 (2006). The FMIA, among other things, forbids "any act . . . intended to cause or [having] the effect of causing [articles from meat or meat products capable of use as a human food] to be adulterated or misbranded" while these products "are being transported in commerce or held for sale after such transportation." Id. § 610(d). The relevant definitions of the term "misbranded" provided by the statute apply to "any carcass, part thereof, meat or meat food product under one or more of the following circumstances:" (1) "if its labeling is false or misleading in any particular," id. § 601(n)(1); (2) "[i]f it bears or contains any . . . chemical preservative[s], unless it bears labeling stating that fact," provided that "the Secretary [of Agriculture]" has not "promulgated "regulations" exempting "compliance with the requirements of this [particular] subparagraph . . . " based on it being impracticable to do so, id. § 601(n)(11); and (3) "[i]f it fails to bear . . . the inspection legend and . . . such other information as the Secretary [of Agriculture] may require . . . to assure that it will not have false or misleading labeling and that the public will be informed of the manner of handling required to maintain the article in a wholesome condition," id. § 601(n)(12).

Similarly, Congress has declared its "policy . . . to provide for the inspection of poultry and poultry products and otherwise regulate the processing and distribution of such articles" through the Poultry Products Inspection Act ("PPIA"). 21 U.S.C. § 452. Like the FMIA, the PPIA forbids "any act . . . intended to cause or [having] the effect of causing [poultry products capable of use as human food] to be adulterated or misbranded" while those products "are being transported in commerce or held for sale after such transportation." 21 U.S.C. § 458(a)(3). And, again, like the FMIA, the PPIA defines the term "misbranded" to include the three definitions listed above with respect to meat or meat products. See id. § 453(h)(1), (11)-(12) (setting forth the same definitions of the term "misbranded" as those set forth in the analogous sub-parts of § 601(n)).

To implement these statutory provisions, the Food Safety and Inspection Service ("FSIS"), a component of the USDA, has issued a series of regulations concerning the appropriate methods for labeling meat and poultry products. One such regulation provides that "[c]ontainers of other product packed in, bearing, or containing any chemical preservative shall bear a label stating that fact." 9 C.F.R. § 317.2(j)(12) (2007). Another FSIS regulation provides:

No product or any of its wrappers, packaging, or other containers shall bear any false or misleading marking, label, or other labeling and no statement, word, picture, design, or device which conveys any false impression or gives any false indication of origin or quality or is otherwise false or misleading shall appear in any marking or other labeling. No product shall be wholly or partly enclosed in any wrapper, packaging, or other container that is so made, formed, or filled as to be misleading.

Id. § 317.8(a).

One labeling issue of concern to the FSIS is the use of the term "natural" on the labels of food products. According to the plaintiff, "'natural' products have become of increasing interest to many health-conscious consumers" over the last twenty-five years, as many consumers "seek to avoid ingestion of chemical preservatives, artificial flavorings and ingredients, and highly processed foods." Compl. ¶ 20. In 1982, the FSIS issued an internal policy guidance, the Food Standards and Labeling Policy Book ("Policy Book"), "that set forth the standards by which it would decide whether meat and poultry products could carry the term 'Natural' on their labels without being false and misleading, and thus without triggering the misbranding provisions of the FMIA or the PPIA." Id. ¶ 21. As written in 1982, the Policy Book designated two criteria for approval of a "Natural" product label: (1) the product could not "contain any artificial flavor or flavoring, coloring ingredient, or chemical preservative" within the meaning of 21 C.F.R. § 101.22, and (2) "the product and its ingredients" could not be "more than minimally processed." Compl. ¶ 22.

"[The] FSIS chose not to devise its own, novel definition of the term 'chemical preservative'" for use in the Policy Book. Id. ¶ 23. Instead, it adopted the definition provided in 21 C.F.R. § 101.22, which defines the term as "any chemical that, when added to food, tends to prevent or retard deterioration thereof [other than] common salt, sugars, vinegars, spices, or oils extracted from spices, substances added to food by direct exposure thereof to wood smoke, or chemicals applied for their insecticidal or herbicidal properties." 21 C.F.R. § 101.22(a)(5). The FSIS did, however, provide its own definition of the term "minimally processed," limiting it to the "traditional processes used to make food edible or preserve it or make it safe for human consumption" such as "smoking, roasting, freezing, drying, and fermenting," or "those physical processes which do not fundamentally alter the raw product and/or which separate a whole, intact food into component parts" such as "grinding meat, separating eggs into albumen and yolk, and pressing fruits to produce juices." Compl. ¶ 24.

"In August 2005, the FSIS revised [the 1982 Policy Book] concerning the 'Natural' label claim." Id. ¶ 28. The revision adopted the same criteria for determining whether a "natural" label can be carried on meat and poultry products without being misleading, but added an exception to this criteria for "[s]ugar, sodium lactate (from a corn source)[,] natural flavorings from oleoresins[,] or extractives," which the FSIS deemed "acceptable for 'all natural' claims."

Id. "This exception did not impose any limit upon the amount of sodium lactate that could be added to a food product and still have the product qualify for a 'Natural' label." Id. Since the revision, the FSIS has allegedly approved the sale of certain food products marketed with a "natural" label "without label disclosure of the fact that the products contain[ed] the added chemical potassium lactate and that this chemical has a preservative effect on the food." Id. ¶ 31.

B. The Plaintiff's Interest in Natural Labels

The plaintiff "is a Delaware corporation . . . [that] manufactures and sells to consumers in all [fifty] States prepackaged meat and poultry products, including ham and turkey." Id. ¶ 1. In accordance with the 1982 criteria set forth in the Policy Book for conditions under which a product may bear a "natural" label, "[the plaintiff] successfully developed a method for use of a high-pressure pasteurization process designed to inactivate micro-organisms that may be present in the product, and thus maintain the quality and flavor of its foods[] without having to add chemical preservatives to them." Id. ¶ 26. "In mid-2005"-before the FSIS amended its criteria for using labels bearing the word "natural" for meat and poultry products containing sodium lactate and approved individual applications to use the word "natural" on meat and poultry products containing potassium lactate-"[the plaintiff] received FSIS pre-marketing approval to sell and distribute under the 'Natural' label its Natural ...


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