U.S. appeal court rejects injunction to block COOL

Tuesday, July 29, 2014

by SUSAN MANN

A coalition of meat and livestock groups from Canada, the United States and Mexico will be assessing where they go from here after a United States appeals court rejected its bid to implement an injunction blocking American Country of Origin Labelling.

The U.S. Court of Appeals for the District of Columbia Circuit released its decision on Tuesday. The coalition’s request for a preliminary injunction to halt country of origin labelling (COOL) has been working its way through the American court system as part of a larger lawsuit it launched in July 2013 to strike down the COOL law. Both the Canadian Cattlemen’s Association and the Canadian Pork Council are part of the coalition being led by the American Meat Institute.

All 11 judges from the U.S. Court of Appeals for the District of Columbia Circuit heard the case in May after a lower court denied implementing the injunction to block the United States Department of Agriculture’s May 2013 changes to the COOL law. The USDA made changes to its COOL law, first implemented in 2008, and brought them in last year after the World Trade Organization (WTO) ruled in 2012 the legislation doesn’t comply with the Americans’ trade obligations. It was Canada and Mexico that challenged the U.S. COOL law at the World Trade Organization.

The American COOL legislation requires beef and pork, among other products, to be labelled with details on where animals are born, raised and processed. The regulation means American-born, raised and processed animals must be segregated from Canadian and Mexican animals.

John Masswohl, Canadian Cattlemen’s Association government and international relations director, says the American appeal court judges ruled 9-2 to deny the injunction. The coalition’s lawyers will now “fully analyze the decision” and advise members on what the options for next steps are. “Then we can make a decision as to what we should do next.”

As for the larger lawsuit to strike down COOL, Masswohl says the case “hasn’t even been scheduled for its merits yet, let alone been heard.”

Masswohl says they’re disappointed the appeals court denied the injunction. “At least a couple of judges seemed to agree with us but not the majority of them.”

Both Masswohl and Gary Stordy, Canadian Pork Council public relations manager, say the American lawsuit is one of three avenues the Canadian organizations have to fight COOL, which is costing Canadian beef and pork farmers more than $1 billion annually since 2008 in lost sales and reduced prices. “We feel that it (the damage amount) has gone up since the rule has changed (in May 2013) but we haven’t come to the point in the WTO process where we would have to provide new analysis with new numbers,” Masswohl says, adding the updated analysis will be done when “we have to arbitrate what the retaliation amount would be.”

The other avenue is an appeal to the World Trade Organization of the American’s changes to its COOL law implemented last year. Those rules make COOL even more complex and discriminatory against Canadian and Mexican livestock and meat compared to the original COOL law, the groups say.

Masswohl says they expect to see a decision from the World Trade Organization sometime early this fall. Stordy says “the WTO process is our primary focus and where most of our efforts have been devoted.”

The third avenue is lobbying American congressional representatives to change or remove the discriminatory impact of COOL.

Stordy says the American lawsuit has helped to raise the profile of the WTO challenge and COOL among American elected officials. “It was quite noticeable in some of our conversations with elected officials that they were aware of the court case and therefore were aware of the WTO challenge.”

In its July 2013 press release announcing the livestock and meat groups’ lawsuit against COOL, the American Meat Institute said the USDA’s 2013 COOL changes 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.” The labels do not offer any food safety or public health benefit yet they impose costs the American government modestly estimated at $192 million as meat sold at retail has to list where the animals are born, raised and slaughtered.

The changes also violate the American Agriculture Marketing Act because they exceed the authority granted to the USDA in the 2008 Farm Bill, where COOL was first introduced, the Meat Institute release says. In addition, the COOL law changes are arbitrary and capricious and “will fundamentally alter the meat industry” by picking winners and losers in the marketplace “with no benefit to anyone,” the release says.

Meat companies along both the Canadian/U.S. and Mexican/U.S. borders depend on a steady supply of livestock that have been born in another country, according to the release. Yet retail organizations have said the costs of segregating, tracking and labelling meat according to the complex new rules will force them to reject Canadian and Mexican-sourced meat.

Masswohl says in the fall of 2013 meat companies in the U.S. were rejecting Canadian cattle but four to five months later with tight cattle supplies in the U.S. some companies started to bring Canadian cattle into the United States “on a very limited basis.” However Canadian producers are “still seeing those price discounts.” BF