Where’s the “Beef”? Oklahoma Federal Court Refuses to Enjoin Plant-Based Labeling Law

December 28, 2020

State-level attempts to regulate plant-based meat alternatives’ labeling has followed a familiar pattern. States pass a law restricting what plant-based companies may (or may not) say in their labeling and marketing. Then, federal courts enjoin their enforcement.

However, a recent decision from an Oklahoma federal court bucked that trend, holding that the plant-based claims at issue were potentially deceptive. Whether the court’s decision represents a one-off blip in the battles over plant-based labeling remains to be seen. Regardless, the decision will become an important citation for proponents and opponents alike.

In Upton’s Naturals Co. v. Stitt, plaintiffs Upton’s Naturals and the Plant Based Foods Association challenged Oklahoma’s recently passed Meat Consumer Protection Act. The act, which went into effect on Nov. 1, 2020, sought to prohibit misrepresentations of products as “meat that [are] not derived from harvested production livestock.” The act did provide for plant-based foods’ use of traditional terms associated with meat (e.g., burger, hot dog, chorizo) as long as the product’s labels proclaimed “that the product is derived from plant-based sources in a type that is uniform in size and prominence to the name of the product.” In response, the plaintiffs sued the state, alleging that the act’s requirement constituted a compelled disclosure violating the First and 14th Amendments. For instance, the plaintiffs alleged that Upton’s Naturals’ Ch’eesy Bacon Mac product would violate the act because, while the term “vegan” appeared on the product’s label, it was not as large or as prominent as the product name. As part of their suit, the plaintiffs sought to enjoin Oklahoma from enforcing the act.

In its opinion last month, the Western District of Oklahoma denied the plaintiffs’ request for an injunction, holding that they could not show a likelihood of success on the merits. To start, the court held that the state need only satisfy the Zauderer standard for disclosed commercial speech, meaning the state could require speakers to divulge “purely factual and uncontroversial information,” so long as the speech was “reasonably related” to a substantial government interest. Further, under Zauderer, the compelled disclosure could be neither “unjustified [n]or unduly burdensome.” Under this standard, the court held that it had “no trouble finding” plant-based meat labels “potentially misleading” based on the “natural inference a consumer would draw from the meat-related terms used.”

To the court, it was insufficient that Upton’s Naturals’ labels included the term “vegan” elsewhere on the principal display panel in smaller font than the product name. Instead, it held the state’s “size and prominence requirement [were] justified and not unduly burdensome” because they “ensure[d] that a reasonable consumer will not be misled by the product name, which uses an animal-based term when the product itself is plant-based.” Because the court held that the requirement furthered the state’s interest of “preventing confusion or deception of consumers,” it ultimately determined that the compelled disclosure likely did not violate the Constitution, that the plaintiffs would likely not succeed on the merits, and that injunctive relief was therefore inappropriate.

The Oklahoma court’s opinion broke from a number of coordinate courts that have enjoined substantively similar efforts to restrict plant-based labeling. For instance, in Miyoko’s Kitchen v. Ross, the Northern District of California partially enjoined the state from enforcing its labeling regulations as to Miyoko’s “vegan butter.” In its decision, the court held that California failed to show a likelihood of consumer confusion when the word “butter” appeared immediately next to (or at least in close proximity to) terms like “vegan” and “made from plants.” That court noted that the state’s attempts to show “broad marketplace confusion” around plant-based alternatives were “empirically underwhelming,” and as a result, the state lacked a governmental interest worth protecting.

Prior to that, the Eastern District of Arkansas enjoined Arkansas’ plant-based labeling law in Turtle Island Foods SPC v. Soman. That court held that terms like “burger” likely did not cause consumer deception when modified with “veggie,” and where the term “all vegan” appeared in the middle of the package. Such an argument “require[d] the assumption that a reasonable consumer will disregard all other words found on the label” and solely focus on the word “burger.”

And, while the Western District of Missouri denied Tofurky a similar injunction in Turtle Island Foods SPC v. Richardson, it did not reach the merits, instead denying the injunction only on the basis that the product labels in question were unlikely to cause any consumer confusion and, as a result, Tofurky did not reasonably risk violating the statute. That court’s decision relied heavily on guidance from Missouri making clear that plant-based products could conform by “prominently” disclaiming the product came from plants.

Whether the Upton’s Naturals decision represents a rarity or a growing division remains to be seen. However, that question may be put to the test sooner rather than later. In October, Tofurky’s manufacturer sued Louisiana over its meat labeling law in Turtle Island Foods v. Strain. According to Tofurky’s complaint, Louisiana’s law failed to provide any labeling alternative for plant-based products, a distinction that may make all the difference.

As the Oklahoma and Missouri courts have shown, plant-based labeling laws may survive past the injunction stage where a manufacturer may comply by labeling the product with a plant-based modifier, even if that disclosure must be in a specified size and prominence.

Where states have taken an all-or-nothing approach, like California and Arkansas, those laws have largely been enjoined. Either way, market participants will have their eyes trained on what the Middle District of Louisiana does next.