Meatpackers, ranchers clash in Eighth Circuit over 'Product of the USA' labels

ST. PAUL, Minn. (CN) — Seeking to preserve a unified national standard for food labeling, meat processing giants told an Eighth Circuit panel Tuesday that allowing individual states to enforce their own labeling requirements would create a regulatory patchwork that undermines federal authority.

Attorney Aaron Van Oort, representing JBS Foods, Tyson, Cargill and National Beef from the firm Faegre Drinker, argued that the Federal Meat Inspection Act grants the secretary of agriculture exclusive power to determine if meat labeling is proper.

Van Oort asserted that once the federal government approves a label, states are legally barred from imposing requirements that are “different than, or in addition to” those federal standards — including grievances raised by South Dakota ranchers regarding the mislabeling of foreign meat as an American product.

“This scenario, this ‘scheme’ is not a trap for producers to rely on,” Van Oort said — arguing that a court cannot later say regulation was wrong and retroactively hit producers with damages. “You would be doing something that the court hasn’t done if you decided that way.”

Van Oort further claimed that if every state could set its own definitions for labeling, the national food supply would descend into chaos.

Tuesday’s hearing follows a lower court ruling that sided with South Dakota ranchers, allowing them to pursue claims that meat processors misled consumers with their “Product of the USA” labeling. Because the meat comes from a foreign country, ranchers say that labeling is harming domestic meat prices, as consumers turn to what they believe to be a cheaper, domestic product.

Under existing federal labeling policy, “Product of the USA” branding was permitted if the meat was merely processed in the country. While a stricter standard took effect this year, meat processing giants contend that the new rule cannot retroactively govern the validity of the old one.

“This case, no matter what it does, can’t answer the question about the secretary because we don’t have the administrative record,” Van Oort said. “The secretary is not here.”

The three-judge appellate panel appeared focused on the practical implications of the ranchers’ claims.

“You still have a problem, potentially 50 state laws that have different definitions,” U.S. Circuit Judge David Stras, a Donald Trump appointee, said — concerned that a ruling in favor of the ranchers would leave the door open for a country-wide labeling war.

U.S. Circuit Judge James Loken also questioned the feasibility of awarding damages to ranchers when the processors were following the government’s own rules.

“I’m talking about a practical defense to a tort claim for damages, [being] ‘we reasonably relied on the federal government’s statement of what we could do, we did it,” Loken, a George H.W. Bush appointee, said. “If someone doesn’t like the policy guidance … the APA gives them all kinds of remedies.”

Blair Dunn, attorney for the ranchers, maintained that federal oversight should not serve as a total shield against accountability, arguing if the secretary of agriculture’s standards are insufficient or “wrong,” states should have the power to protect their citizens from deceptive marketing.

While the processors may have followed federal guidance, Dunn argued they did not follow federal law barring product mislabeling that deceives consumers.

“They’re consistent with the guidance document, they are not consistent with the law,” Dunn said. “This court should not muddle those two, they are not the same.”

The appellate panel shared some of that skepticism, pressing Van Oort on whether the industry’s reliance on USDA policy was legally sufficient to block state claims — questioning whether such guidance documents carry the force of law.

The court, however, remained wary of being pulled into a policy debate.

" We’re a panel of three judges deciding a particular case, we’re not the staff of the congressional committee listening to legislative policy positions on both sides," Loken said.

During the hearing, a divide emerged over a potential timing “hole” in the law. The court questioned Van Oort on what happens if a state acts before the secretary has made a definitive ruling. Van Oort suggested that allowing states to “decide it first” would effectively preempt the federal government’s authority.

“The only question presented here is whether the state standard is consistent with the federal one,” Van Oort said, adding that state courts can decide preemption, but they can’t second-guess whether an existing federal standard is right or wrong.

U.S. Circuit Judge Lavenski Smith, a George W. Bush appointee, rounded out the Eighth Circuit panel.