“I come from a state that raises corn and cotton and cockleburs,” Missouri Congressman Willard Duncan Vandiver told a U.S. Navy banquet in 1899. “[F]rothy eloquence neither convinces nor satisfies me. I am from Missouri. You have got to show me.” This is one of the sayings credited for making Missouri known as the “Show-Me” state.
Missouri recently became the first state in the Union to enact a ban on labeling products as “meat” unless they are “derived from harvested product livestock or poultry.” Mo. Rev. Stat. § 265.494(7). To some, this was the Missouri General Assembly taking up the “show-me” mantle. The Missouri Cattleman’s Association lauded the law as an important consumer protection measure. The Association said the statute would prevent “mislead[ing] consumers into thinking” plant-based or laboratory-grown food products “are actually meat produced by farm and ranch families.” Mike Deering, the Executive Vice President of the Association, told The New York Times the law is about “[m]aking sure that consumers kn[o]w what they [are] buying.” After all, “[y]ou cannot market a station wagon as a Porsche.” (Unless, of course, you are Porsche.)
At least one maker of meat substitute products is having none of this. Turtle Island Foods says the new law is less about it having to “show me” to consumers than it is a “protect me” call from the traditional meat industry. Turtle Island makes the TOFURKY brand of meat replacement products. TOFURKY products include vegetarian versions of chicken, sausages, roasts, and hot dogs. Turtle Island filed a lawsuit in federal district seeking to block enforcement of the new Missouri law. In the suit, Turtle Island asserts the Missouri General Assembly had “no evidence of consumer confusion about the ingredients or source of plant-based meats” prior to enacting the statute. Far from a consumer protection measure, Turtle Island says that the law is “intended to protect the animal agriculture industry from competition from plant-based meat and clean meat producers.” According to Turtle Island, the law “was introduced and enacted with the intent of commercially harming the plant-based and clean meat industries . . . to protect the conventional meat industry from competition.”
Turtle Island asserts three constitutional challenges to the meat law. Turtle Island claims the Missouri statute violates the First Amendment, the dormant commerce clause, and that the statute is unconstitutionally vague. It is interesting that Turtle Island alleges that “FDA has never brought an enforcement action against a plant-based food company for labeling its products as ‘meat’ analogues or using the term ‘meat’ or related terms.” Despite this, Turtle Island does not assert that the Missouri law is preempted by the federal Food, Drug, and Cosmetic Act or any other federal law. The Missouri Attorney General’s Office has committed to defend the constitutionality of the statute.
In any event, at least in the short term, the Missouri law is unlikely to be enforced by the Missouri state government. Three days after Turtle Island filed suit, the Missouri Department of Agriculture, the agency charged with enforcing the meat advertising law, published a memorandum regarding its enforcement strategy. The Department stated it will not refer meat substitute products for prosecution under the new law if the labeling for those products contains the following two elements: (1) a “[p]rominent statement on front of the package, immediately before or immediately after the product name, that the product is ‘plant-based,’ ‘veggie,’ ‘lab-grown,’ ‘lab-created,’ or comparable qualifier” and (2) a “[p]rominent statement on the package that the product is ‘made from plants,’ ‘grown in a lab’ or a comparable disclosure.” (Query whether TOFURKY product labels, several of which are shown on pages 12 and 13 of Turtle Island’s complaint, already meet this standard.) The Department also announced that it would refrain from making any referrals for prosecution until January 1, 2019 “[t]o allow for any necessary label changes to be made.”
That is not the end of the story though. Private plaintiffs might not exercise such restraint. Missouri’s Merchandising Practices Act bars “[t]he act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce.” Mo. Rev. Stat. § 407.020.1. The statute is enforceable by a consumer who “purchases . . . merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the” unfair trade practice. Id. § 407.025.1. Damages and attorney’s fees are available under the Act. Id. There is also a provision for consumers to bring class action lawsuits under the statute. Id. § 407.025.3.
A private consumer plaintiff could use the new Missouri statute as a vehicle to impose liability under the Missouri Merchandising Practices Act. “Merchandise” under the Act includes, among other things, “objects, wares, goods, [and] commodities.” Id. § 407.010(4). Food products such as meat substitute products are arguably “objects” or “goods” and thus “merchandise” within the scope of the Act. Given all of this, a consumer could bring a claim that they were duped into buying a meat substitute product. As a theory of liability, the consumer could point to the new Missouri meat advertising law, Mo. Rev. Stat. § 265.494(7), and allege that the meat substitute product was mislabeled as “meat”. That would be a violation of the new law and, by extension, a violation of the Merchandising Practices Act. In this regard, consumer-plaintiffs could cite a Missouri regulation which defines an unfair trade practice as “any practice which . . . [o]ffends any public policy as it has been established by the . . . statutes or common law of this state” that “[p]resents a risk of, or causes, substantial injury to consumers.” Mo. Code Regs. Ann. tit. 15, § 60-8.020(1). The violation of the new meat advertising law would be the predicate offense giving rise to liability under the Merchandising Practices Act.
What should meat substitute and lab-grown meat companies be thinking and doing about all of this? At the very least, they should take steps to comply with the labeling standards set out in the Missouri Department of Agriculture’s memorandum. This means they should disclose their products are “plant-based” or “lab-grown” in prominent text on the primary packaging display. It is important to note that compliance with this standard would not, in and of itself, bar a claim from being brought under the Merchandising Practices Act. Compliance could, however, still be used as a shield. It stands to reason that labeling that meets the standard established by the government agency charged with enforcing a particular law is by definition not “deceptive” or “unfair.”
Coca-Cola’s defense in the POM Wonderful LLC v. Coca-Cola Co. litigation is a potential playbook for defending against a consumer claim. In that case, POM sued Coca-Cola for false advertising. POM alleged that it was losing sales of its 100% pomegranate blueberry juice to Coca-Cola’s 0.5% pomegranate blueberry juice. Coca-Cola’s label facially complied with FDA regulations promulgated pursuant to the federal Food, Drug, and Cosmetic Act. The district court and the Ninth Circuit ruled that POM’s claim was precluded. The Supreme Court unanimously reversed the Ninth Circuit, ruling that POM’s false advertising claim could be brought before a jury even if FDA regulations addressed the label. See POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228, 2241 (2014).
You had to be bullish about POM’s chances on remand. The Supreme Court’s decision was unanimous. Justice Kennedy, who wrote the opinion in POM Wonderful, even said Coca-Cola’s label “cheats consumers” at oral argument. POM wins at trial, right? Not so fast. A California federal jury returned a verdict for Coca-Cola. At trial, Coca-Cola successfully argued that Coca-Cola followed FDA regulations when it came up with its label. While compliance was not an absolute bar to liability, it still played a critical role in Coca-Cola’s defense. Coca-Cola was able to use its compliance with FDA regulations to secure a defense verdict. POM Wonderful was a federal Lanham Act case. It is instructive not only for fending off challenges brought by competitors (e.g., the false advertising lawsuit brought by Unilever against the vegan JUST MAYO mayonnaise back in 2014), but also for defending against potential unfair and deceptive trade practices claims in Missouri and other jurisdictions.
Another potential response: change the law. The Kansas City Star reported on a 2017 effort to amend Missouri’s Merchandising Practices Act. Reform proponents did not mince words. One critic of the Act said without change “Missouri will continue to be viewed as a judicial hellhole run by trial lawyers that new businesses should avoid.” One of the amendments sought would have exempted any business “regulated by the Federal Trade Commission or any other regulatory agency.” Opponents of change said the amendment would “gut” the Act. The exemption is broad. Is there any business under the sun not subject to some regulatory body?
Reform proponents may want to take a more nuanced approach. Instead of trying to exempt businesses from the Act entirely, exempt conduct that complies with an applicable regulatory regime. Other jurisdictions do precisely this. Delaware’s Deceptive Trade Practices Act contains an exemption for “[c]onduct in compliance with orders or rules of, or a statute administered by, a federal, state, or local governmental agency.” Del. Code Ann. tit. 6, § 2534(a)(1). If this provision were part of the Act, and a claim were brought against a meat substitute product label that complied with the Missouri Department of Agriculture’s memorandum, then the claim would arguably be barred as a matter of law.
Food companies should continue to keep tabs on the direct and indirect effects of the new Missouri law. The “Show-Me” state model could spread to other agriculture-rich states. Meat substitute companies will need to engage the appropriate state stakeholders. After all, as the sign on one famous Missourian’s desk read, “the buck stops here!”