Well Done

On August 14, the federal government, through the Department of Justice (DOJ), filed a Statement of Interest in a lawsuit between a group of food industry trade associations and New York City regarding the city’s food chain menu labeling rule, which requires certain food establishments to post calorie information and other nutritional information.[1] The lawsuit arose following NYC’s announcement in May that it would begin to enforce its own local menu labeling rule after FDA delayed the enforcement date of a similar federal menu labeling regulation for the third time. The trade associations sought an injunction to block NYC from enforcing its rule, and in its recent filing, the DOJ stated its agreement that the NYC rule should be barred on preemption grounds.

The city’s efforts to promote healthier eating habits and reduce obesity date back to 2008, when an earlier version of the menu labeling rule was first implemented. Other cities and states enacted similar menu labeling laws and, in an effort to create a national standard, Congress included a menu labeling requirement in the 2010 Affordable Care Act (ACA). FDA promulgated a final menu labeling regulation in 2015. NYC updated its rule to largely reflect the federal regulation, with the intention that the city rule would go into effect at the same time as the federal regulation. However, FDA has repeatedly delayed the effective date of the federal rule—first to December 2016 and then to May 2017. In May, the agency again delayed implementation of the federal regulation to May 2018. After this last delay, NYC announced it would begin to enforce its own rule beginning August 21, 2017.

The injunction brought by industry trade organizations representing chain restaurants and convenience stores argues that the federal regulation preempts the city rule. Federal preemption is the doctrine that federal law “preempts” or supersedes state law when the laws are in conflict. The ACA includes an express federal preemption clause for menu labeling at 21 U.S.C. § 343-1, which states that “no State or political subdivision of a State may directly or indirectly establish . . . any requirement for nutrition labeling of food that is not identical to the requirement of section 343 (q) of this title[, which contains restaurant menu labeling requirements].”

In its recent Statement of Interest, the DOJ likewise argued that NYC should be prohibited from enforcing its menu labeling rule on preemption grounds. Specifically, the DOJ argues that NYC’s August 2017 compliance date is in conflict with the federal law’s May 2018 compliance date. The Statement of Interest states: “Despite the unambiguity of Congress’ intent to create a national regime of menu labeling requirements, the City proposes to set its own unilateral compliance date that is in conflict with the FDA’s considered decision about the appropriate deadline. The City is expressly preempted from doing so.”

However, as discussed in our prior posts, Menu Labeling and Passive Federal Preemption and Menu of the Day, this lawsuit raises other new and important issues of preemption. For example, it is unclear whether the preemption doctrine applies here where no federal regulation is actually being enforced. And, if it does apply, can enforcement then be delayed indefinitely such that there is neither federal nor state governance? Further, what is FDA’s responsibility to take action pursuant to a congressional directive to do so? The DOJ states in response that “[t]he setting of a compliance date by a federal agency is no mere ministerial detail.” Further, the agency argues that FDA has not failed to regulate, but rather the continued delays are “based on ongoing interaction with affected stakeholders, in order to resolve critical implementation issues before finalization of the requirements.” The DOJ also relies upon two Supreme Court cases[2] that argue that preemption still applies even where a federal agency has not acted affirmatively.

Notably, FDA itself has been sued for its delay in enforcing the federal menu labeling rule. In June, the Center for Science in the Public Interest and the National Consumers League brought a lawsuit alleging that FDA’s rule delaying the compliance deadline of the federal menu labeling rule violates the Administrative Procedure Act (APA).[3] The plaintiffs state in their complaint that the delay—made without notice-and-comment rulemaking—is a final agency action with legally binding effect that constitutes an unlawful amendment to the federal rule, in violation of the APA. While these issues will eventually resolve through litigation, in the interim, retailers must determine what they are required to do to comply with local and federal law.