Upton's Naturals Co. v. Stitt

UPTON'S NATURALS CO.;and THE PLANT BASED FOODS ASSOCIATION, Plaintiffs, v. KEVIN STITT, in his official capacity as Oklahoma Governor;and BLAYNE ARTHUR,in her official capacity as Oklahoma Commissioner of Agriculture, Defendants.

Case No. CIV-20-938-F

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

November 19, 2020

ORDER

Before the court is Plaintiffs' Motion for Preliminary Injunction, filed September 16, 2020. Doc. no. 5. Along with the motion, plaintiffs filed a supporting memorandum. Doc. no. 6. Defendants responded in opposition to plaintiffs' papers and plaintiffs replied. Doc. nos. 22 and 23. A hearing on the motion was held on October 28, 2020, at which the parties presented oral argument.¹ Doc. no. 24. After consideration of the parties' submissions and oral arguments, the court makes its determination.

I.

Plaintiffs Upton's Naturals Co. and Plant Based Foods Association² commenced this 42 U.S.C. § 1983 action seeking declaratory and injunctive relief against defendants, Kevin Stitt and Blayne Arthur, in their respective official capacities as Governor and Commissioner of Agriculture for the State of Oklahoma. Plaintiffs posit that the Oklahoma Meat Consumer Protection Act ("Act"), specifically, 2 O.S. § 5-107(C)(1),³ which became effective on November 1, 2020, violates the First and Fourteenth Amendments to the United States Constitution.

By way of example of the matters at issue, Upton's desires to sell, unencumbered by the requirements of the statute in question, a product it calls "Ch'eesy Bacon Mac" even though the product contains no bacon (or, for that matter, cheese):

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Plaintiffs' complaint is that the Act prohibits sellers of plant-based foods from using meat terms to describe their foods unless they have a disclaimer—in the same "size and prominence" as their product names—that their products are plant-based. Plaintiffs state that their food labels use meat terms including, but not limited to, "burger," "bacon," "chorizo, "hot dog," "jerky," "meatballs" and "steaks," to describe their foods. Additionally, they state that their food labels clearly mark their foods as "meatless," "plant-based" or "vegan" or with a similar term to let the consumer know their foods do not contain meat. However, plaintiffs state that these terms are not the same "size and prominence" as the product names which include the meat terms. Plaintiffs contend that in order to comply with the Act, they will have to re-design their labels or create special labels for Oklahoma, which will cause them to incur extra costs, or they will have to stop advertising and selling theirproducts in Oklahoma.⁴ According to plaintiffs, Upton's Naturals Co. and other members of Plant Based Foods Association will have to choose the latter. Plaintiffs argue that the Act abridges their freedom of speech because they are prohibited from communicating the name of their meatless product-such as "Classic Burger-in their preferred format, with the most prominent textual feature of the label being the one that most pointedly suggests that it has real meat content.

Plaintiffs now move, pursuant to Rule 65(a), Fed. R. Civ. P., for a preliminary injunction to enjoin defendants from enforcing the Act during the pendency of this litigation. They seek to preserve the status quo—no plant-based disclaimer in "type that is uniform in size and prominence" to product name—until the merits of their claims are resolved.

To obtain a preliminary injunction, plaintiffs must satisfy four requirements: (1) likelihood of success on the merits; (2) irreparable harm; (3) balance of equities; and (4) benefit to the public. Verlo v. Martinez, 820 F.3d 1113, 1126 (10^th Cir. 2016). Upon review and as discussed below, the court finds that plaintiffs cannot satisfy the first requirement—likelihood of success on the merits. Consequently, the court finds that it need not address the other three requirements. The court concludes that plaintiffs' motion should be denied.

II.

"The First Amendment, applicable to the States through the Fourteenth Amendment, prohibits laws that abridge the freedom of speech." National Institute of Family and Life Advocates v. Becerra, 138 S.Ct. 2361, 2371 (2018) ("NIFLA"). While the First Amendment's protection is broad, the Supreme Court has recognizedthat it has "applied a lower level of scrutiny to laws that compel disclosures in certain contexts," including cases analyzing the disclosure of "factual, noncontroversial information in . . . 'commercial speech.'" Id. at 2372.

The parties agree that the Act regulates commercial speech and compels the disclosure of information. The parties disagree as to the level of scrutiny the court should apply in deciding whether the Act violates the First Amendment. Plaintiffs urge the court to apply the intermediate level of scrutiny laid out in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566 (1980),⁵ while defendants urge the court to apply the lower level of scrutiny set forth in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985).

Under Central Hudson, the government may restrict commercial speech that is neither misleading nor related to unlawful activity, as long as the governmental interest in restricting the speech is substantial. 477 U.S. at 564. The law at issue must "directly advance[] the governmental interest asserted" and must not be "more extensive than is necessary to serve that interest." 447 U.S. at 566.

Under Zauderer, the government may require commercial speakers to divulge "purely factual and uncontroversial information" about their products or services, so long as it is "reasonably related" to a substantial government interest and is neither "unjustified [n]or unduly burdensome." 471 U.S. at 651. In the context ofdisclosures, a commercial speaker's "constitutionally protected interest in not providing any particular factual information in [its] advertising is minimal." Id. (emphasis in original). This is consistent with some bedrock principles of economic regulation, going back at least to the New Deal era, standing for the proposition that a requirement of simple disclosure of accurate information is much less susceptible to judicial intrusion than is substantive regulation.

Despite plaintiffs' arguments to the contrary, the court concludes that the lower level of scrutiny set forth in Zauderer should apply. The challenged provision of the Act does not restrict speech as in Central Hudson. It requires disclosure of information. (And the required disclosure is of information plaintiffs proclaim as a positive selling point for their products.) In addition, the court concludes that the Zauderer standard is not limited to inherently misleading speech. Courts have also held that it applies where the targeted speech is potentially misleading. See, Public Citizen Inc. v. Louisiana Attorney Disciplinary Bd., 632 F.3d 212, 218 (5^th Cir. 2011) ("A regulation that imposes a disclosure obligation on a potentially misleading form of advertising will survive First Amendment review if the required disclosure is 'reasonably related to the State's interest in preventing deception of consumers.'"); International Dairy Foods Ass'n v. Boggs, 622 F.3d 628, 641 (6^th Cir. 2010) ("Milavetz⁶ thus established that Zauderer applies where a disclosure requirement targets speech that is inherently misleading. We conclude that Zauderer also controls our analysis where, as here, the speech at issue is potentially misleading.") (emphasis in original).⁷ The court has no trouble finding that thespeech at issue is potentially misleading.⁸ Product packaging which labels a product as "Classic Burger," bacon, chorizo, hot dog, jerky, meatballs, or steak, when the product is actually a plant-based product, is potentially misleading to a reasonable consumer. While plaintiffs argue that the government cannot make these meat-related terms potentially misleading by virtue of its definition of meat,⁹ the court notes that all of the meat-related terms, except burger, are also defined in the Dictionary by Merriam-Webster, www.merriam-webster.com, to indicate they are animal-based. With respect to burger, however, plaintiff Upton's Naturals Co. specifically refers to its product as "Classic Burger," thereby indicating a traditional food made of beef. Although plaintiffs contend that defendants have failed to demonstrate with evidence that the speech is misleading, the court concludes that the government need not "conduct a survey of the . . . public before it [may] determine that the [advertisement] had a tendency to mislead" where "the possibility of deception is . . . self-evident." Zauderer, 471 U.S. at 652-653. The court is satisfied that the possibility of deception flowing from the use of meat-related termsfor the plant-based products is self-evident from the natural inference a consumer would draw from the meat-related terms used. (This is true whether we assume that the "reasonable consumer" through whose eyes we look at the labels in question is a hurried grocery shopper, or a shopper who might take the time to closely scrutinize a label before deciding which product to grab. That said, it is, to the undersigned, worthy of note-and unexceptionable to assume-that many shoppers just don't have the time, or perhaps even the inclination, to study product labels in more detail than may seem to be required to form an impression as to the essential nature of the product inside the package.) Further, the court opines the likelihood of deception "is hardly a speculative one." Milavetz, 559 U.S. at 251.

Plaintiffs suggest that their product packaging is not potentially misleading because it features terms, such as meatless, vegan, or plant-based, on the front label. The only packaging in the record before the court is the packaging of some of Upton's Naturals Co. foods. Upon review of the...