[co-author: Gregory Waterworth]
The U.S. Food and Drug Administration’s (FDA or the Agency) decision a couple of months ago to delay its Menu Labeling Rule until May 7, 2018, as discussed here, was met with mixed reactions from industry. While the National Association of Convenience Stores (NACS) and the National Grocers Association (NGA) had pushed for a delay of the Rule, as discussed here and here, the National Restaurant Association (NRA) supported the Rule so its members could avoid having to comply with a patchwork of state and local menu labeling requirements, as discussed here.
By way of background, the Agency’s Menu Labeling Rule (discussed here and here) requires restaurants and “similar retail food establishments” (e.g., convenience stores and grocery stores) that are part of a chain of 20 or more locations and that sell similar menu items to post on menus and menu boards: (1) calorie information; (2) a statement on suggested daily caloric intake; and (3) a statement that written nutrition information is available upon request (and provide such information upon request).
The NRA’s concerns came to fruition in May when, shortly after FDA announced the delay of its Rule, New York City (the City) Mayor Bill DeBlasio announced that the City would be enacting its own menu labeling requirements. Under the City’s rule, chain food retailers 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). The City is expected to begin issuing notices of menu labeling rule violations subject to fines on August 21, 2017.
In deciding to delay its Menu Labeling Rule, FDA was seemingly persuaded by the Trump administration’s calls to reduce regulations that burden businesses (see, e.g., here and here). Interestingly, however, the administration’s regulatory reduction agenda could end up having the opposite effect. For example, the Agency’s decision to delay its Rule could actually result in increased regulatory burdens on businesses, if, in fact, other cities and states decide to follow New York City’s lead by enacting their own menu labeling requirements (to the extent such requirements are not preempted by FDA’s delayed Rule). Just as the NRA feared, its members and other covered businesses now face the possibility of having to comply with a patchwork of state and local menu labeling requirements. That is, if such state and local requirements are not preempted.
Unsurprisingly, on July 14, 2017, the NRA’s 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 U.S. District Court for the Southern District of New York (Southern District) to halt New York City from implementing its menu labeling rule. In the suit, the groups representing restaurants, grocery stores, and convenience stores allege, among other things, that the City’s rule is preempted both expressly and impliedly by FDA’s Menu Labeling Rule, and thus seek to preliminarily and permanently enjoin the City from enforcing its rule.
These industry groups are not the only ones expressing preemption concerns over New York City’s menu labeling requirements. On the same day the groups filed suit, House Energy and Commerce Committee Chairman Greg Walden (R-Ore.), Health Subcommittee Chairman Michael Burgess, M.D., (R-TX), and Committee member Cathy McMorris Rodgers (R-Wash.) sent a letter to FDA Commissioner Gottlieb regarding state and municipal menu labeling rules. In the coincidentally-timed letter, Reps. Walden, Burgess, and McMorris Rodgers noted that they were “troubled to learn that despite the clear federal preemption in existing law, some states and municipalities are seeking to impose requirements that are inconsistent with federal nutrition-labeling standards,” and suggested that it is critical for the Agency to “publically issue a statement expressing its jurisdiction over [menu labeling] and that [FDA’s rule] preempts conflicting state and municipal requirements.”
While it remains to be seen whether or not FDA’s delayed Menu Labeling Rule does, in fact, preempt New York City’s analog of the same, the implications of the above-referenced case cannot be understated. As part of its regulatory reform agenda, the Trump administration has delayed certain federal rules, including the Menu Labeling Rule. If the Southern District finds that a delayed federal rule does not preempt a state or local analog of the same, states and localities could decide to implement their own rules on matters traditionally regulated by federal agencies, thereby subjecting industry to a compliance nightmare-worthy patchwork of requirements. We will continue to monitor this and other industry developments and provide more information as it becomes available.
