Late last week, groups representing restaurants, grocery stores, and convenience stores reached an agreement with New York City (the City) to ensure that the City will not enforce its analog of the U.S. Food and Drug Administration’s (FDA or the Agency) menu labeling rule against the groups’ members with 20 or more locations nationally until May 7, 2018, the compliance date of the Agency’s rule.
As explained previously, under the City’s rule, chain convenience stores, grocery stores, and restaurants with 15 or more locations nationwide are required to disclose calorie counts and full nutritional information (i.e., the same as FDA’s rule except for the location number threshold). Recall that on July 14, 2017, the National Restaurant Association’s (NRA) Restaurant Law Center (RLC), the Food Marketing Institute (FMI), the National Association of Convenience Stores (NACS), and the New York Association of Convenience Stores (NYACS) jointly filed suit in the Southern District to halt the City from implementing its menu labeling rule. In the suit, the groups alleged, among other things, that the City’s rule is preempted both expressly and impliedly by FDA’s menu labeling rule, and thus sought to preliminarily and permanently enjoin the City from enforcing its version of the same. Recall also that the Agency asked the U.S. District Court for the Southern District of New York (Southern District) to block the City from enforcing its analog of FDA’s delayed menu labeling rule (discussed here).
Importantly, and as alluded to above, nothing in the stipulation prevents the City from enforcing its menu labeling rule against covered establishments that: (1) are not members of NRA, FMI, NACS, or NYACS; or (2) are part of a chain with fewer than 20 locations nationally. FDA’s and the City’s rules are identical, except with regard to the location number threshold; the Agency’s rule applies to chains with 20 or more locations, whereas the City’s rule applies to chains with 15 or more locations. It is reasonable for covered establishments with between 15 and 19 locations to expect that the City will enforce its menu labeling rule against them. While the City believes it can enforce its rule against covered establishments with 20 or more locations that are not members of the trade groups identified above, such establishments could have an argument that the City’s rule is preempted by FDA’s rule.
The settlement followed an announcement by FDA Commissioner Scott Gottlieb, M.D., that the Agency will be providing “additional, practical guidance” on its menu labeling rule by the end of the year. In response, City Health Commissioner Mary Bassett noted that while “[w]e take the FDA at its word,…[s]hould the FDA fail to live up to this commitment, this case remains before the court. The city is prepared to defend its right, independent of FDA action, to enforce its requirements that give New Yorkers the information they need to make informed dietary decisions.”
While this case merely applies to the City’s menu labeling rule, it could have a chilling effect on other cities’ and states’ efforts to enforce their analogs of FDA’s delayed rules, in menu labeling and other contexts. We will continue to monitor these and other industry developments and provide more information as it becomes available.
