COOL faces court challenge

Tuesday, July 9, 2013

by SUSAN MANN

American and Canadian farming industry groups have stepped up their challenge of the United States’ amended mandatory County of Origin Labelling law by filing a lawsuit to block its implementation.

The lawsuit was filed Monday in the United States District Court for the District of Columbia. Two Canadian livestock groups have joined – the Canadian Pork Council and the Canadian Cattlemen’s Association. The other groups launching the lawsuit are: the American Association of Meat Processors, American Meat Institute, National Cattlemen’s Beef Association, National Pork Producers Council, North American Meat Association and Southwest Meat Association.

In a July 9 joint press release, the groups allege the United States Department of Agriculture’s May 23 amendments to the Country of Origin Labelling law violate the American Constitution and the Agriculture Marketing Act. The law is also arbitrary and capricious, the groups say. None of the allegations have been proven in court.

John Masswohl, Canadian Cattlemen’s director of government and international relations, says the lawsuit has two aspects. The first is a request for a temporary injunction to stop the May 23 amendments to COOL from being implemented. Even though the amendments became final on May 23, the USDA says it’s not enforcing them for the first six months, he notes.

The request is for the temporary injunction to be in place until the underlying constitutional challenge to the “whole COOL program can be heard,” he says. The temporary injunction could be installed within six months while the constitutional challenge could take years to complete.

“It’s unfortunate that it had to come to this because our objective was not to get rid of COOL altogether,” he says. “Our objective was for a very surgical amendment that would eliminate the discrimination against imported meat and livestock while keeping the county of origin labelling program.”

But now if the constitutional challenge is successful, the entire COOL program could be struck down.

The USDA’s amendments to COOL became final on May 23. They were implemented after the World Trade Organization (WTO) ruled in response to a Canadian and Mexican complaint that the existing COOL requirements violate the Americans’ WTO obligations. Last month, the Canadian federal government released a list of U.S. commodities it could target for retaliation. The federal government is seeking retaliatory compensation of about $1.1 billion annually after the WTO challenge of the May 23 COOL amendments is completed. The WTO challenge will continue independently of the industry groups’ lawsuit.

Gary Stordy, Canadian Pork Council public relations manager, says the lawsuit is one of three avenues the council is using to try to deal with COOL. “We wanted to be part of this process so we can follow and be engaged with this legal dispute.”

Another reason the Pork Council joined was to acknowledge the Canadian and American pork industries are integrated. “We have colleagues within the meat and livestock industry in the States bringing forward this challenge and we felt that it was important to participate,” he says.

He says the other two avenues the Pork Council has to deal with COOL are: the Canadian government process to launch a WTO challenge of the American government’s May 23 amendments; and advocacy, where pork council representatives discuss the situation with American legislators.

The Canadian Cattlemen’s says in its July 9 press release it has spent more than $2 million to cover legal and advocacy expenses so far to fight COOL.

In their July 9 joint press release, the American and Canadian groups say the USDA’s May 23 rules violate the American Constitution “by compelling speech in the form of costly and detailed labels on meat products that do not directly advance a government interest.”

In addition, the groups say the COOL rules are arbitrary and capricious because they impose vast burdens on the industry with “little or no countervailing effect.” The groups assert that because the labels don’t provide a food safety or health benefit yet impose costs, the government can’t require they be used. The groups also claim the new rules violate the Agriculture Marketing Act because they exceed the authority granted to the USDA in the 2008 Farm Bill.

The Pork Council says in its Tuesday press release there have been a 41 per cent decline in Canadian live swine exports to the United States since mandatory country of origin labelling was implemented in 2008 and a 46 per cent decrease in beef cattle exports. Damages to the Canadian livestock sector have exceeded $1 billion per year since 2008 due to price declines, lost sales and added costs. That damage figure doesn’t include additional damage caused by the May 23 amendments to COOL.

The Canadian livestock groups say the new rule the USDA implemented May 23 is even more onerous than the previous one. Stordy says the Pork Council is now tracking the additional damage caused by the new rules. Masswohl says the Canadian Cattlemen’s will also be updating its damage figure. BF