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GROCERY MFRS. OF AMERICA, INC. v. GERACE

March 8, 1984

GROCERY MANUFACTURERS OF AMERICA, INC., a Delaware Corporation, Plaintiff,
v.
JOSEPH GERACE, COMMISSIONER, NEW YORK DEPARTMENT OF AGRICULTURE AND MARKETS, and the NEW YORK DEPARTMENT OF AGRICULTURE and MARKETS, Defendants, JOHN R. BLOCK, SECRETARY OF AGRICULTURE OF THE UNITED STATES and the DEPARTMENT OF AGRICULTURE OF THE UNITED STATES, MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES OF THE UNITED STATES and the DEPARTMENT OF HEALTH AND HUMAN SERVICES OF THE UNITED STATES, Additional Defendants on Counterclaim.



The opinion of the court was delivered by: DUFFY

MEMORANDUM DECISION

KEVIN THOMAS DUFFY, District Judge

 Plaintiff Grocery Manufacturers of America ("GMA") has filed a complaint seeking injunctive and declaratory relief against the New York State Department of Agriculture and Markets ("Department") and Joseph Gerace, Commissioner the ("Commissioner") of the Department. *fn1" GMA claims, inter alia, that existing federal statutes and regulations governing the labeling of imitation foods including the labeling of imitation cheese products preempts a recently enacted New York statute, N.Y. Agric. & Mkts. Law § 63 (McKinney Supp. 1983), and its implementing regulations, 1 NYCRR Part 18. The federal regulations require only that nutritionally inferior products be labeled imitation. The New York statute, on the other hand, requires that all products that resemble or are intended to substitute for traditional or standardized cheese products -- whether nutritionally inferior, superior, or equivalent -- be labeled imitation.

 GMA claims that this alleged intrusion into a federally regulated field violates the Due Process, Commerce, Equal Protection and Supremacy Clauses of the United States Constitution and the Due Process and Equal Protection Clauses of the New York Constitution.Plaintiff also seeks relief under 42 U.S.C. § 1983 and requests attorneys fees. The matter is presently before me on plaintiff's motion for a preliminary injunction. The parties agree and I find that there are no unresolved material issues of fact. Summary judgment as to to plaintiff's motion for a preliminary and permanent injunction is therefore appropriate. See Fed. R. Civ. P. 56. To evaluate plaintiff's arguments, I turn first to an in depth descripton of the relevant statutes and regulations.

 BACKGROUND

 The labeling of all food products shipped in interstate commerce is regulated generally by the Federal Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq., and its implementing regulations promulgated by the FDA. 21 C.F.R. § Part 100, et seq. The Act requires that the label of a food bear its "common or usual name . . . if any there be," 21 U.S.C. § 343(i), and prohibits the sale of a food under the name of another food. 21 U.S.C. § 343(b). The FDCA further provides that a food which is an imitation of another food product is misbranded "unless the label bears, in type of uniform size and prominence, the word "imitation" and, immediately thereafter, the name of the food imitated." 21 U.S.C. § 343 (c). The statute, however, does not define the word "imitation." In 1973, the Food and Drug Administration ("FDA") promulgated regulations defining imitation food as food which "is a substitute for and resembles another food but is nutritionally inferior must be identified by an appropriate common or usual name or, if none exists, a descriptive term. *fn2" See 21 C.F.R. §§ 102.1(a) & (b); 21 C.F.R. § 1.17. Violators of the FDCA are subject to both civil and criminal sanctions. 21 U.S.C. §§ 332-34. Unlike its counterparts in meat, poultry and packaging, the FDCA contains no express preemption provision. *fn3"

 The production and labeling of all meat and poultry food products shipped in interstate commerce is regulated by the Federal Meat Inspection Act ("FMIA"), 21 U.S.C. § 601, et seq., the Federal Poultry Products Inspection Act ("PPIA"), 21 U.S.C. § 451 et seq., and their respective implementing regulations, 9 C.F.R. § 317, et seq. Both the FMIA and the PPIA are administered by the United States Department of Agriculture ("USDA") which has the authority to approve all labels for meat and poultry food products prior to their shipment in interstate commerce. 21 U.S.C. §§ 607(d)(meat) & 457(d)(poultry). The misbranding provisions of the FMIA and the PPIA are substantially identical to the FDCA provisions. Compare 21 U.S.C. § 343(c) with 21 U.S.C. §§ 453(h)(poultry) & 601(n)(meat). No formal regulation has been issued defining "imitation" under either the FMIA or the PPIA, however, proposed rules are presently pending, 44 Fed. Reg. 75991, 76007-09 (Dec. 21, 1979), and the USDA has as a matter of policy adopted the FDA's definition of the term. See In Re: Castleberry's Food Co., FMIA No. 36 at p. 10 (USDA 1981); Food Labeling: Tentative Positions of Agencies, 44 Fed. Reg. 75990 (Dec. 21, 1979); Affidavit of Robert G. Hibbert, Director of Standards and Labeling Division, Meat and Poultry Inspection Technical Service, United States Department of Agriculture sworn to on December 9, 1983 at P2-3; Affidavit of Donald Houston, Administrator of the Food Safety Inspection Service, United States Department of Agriculture sworn to on February 2, 1984 at P4. Violators of the FMIA and the PPIA are subject to both civil and criminal sanctions. 21 U.S.C. §§ 461 & 467 (poultry); 21 U.S.C. §§ 672-676 (meat). Both Acts have an express preemption provision allowing the states to exercise concurrent jurisdiction in enforcement of the Acts but prohibiting the states from imposing "[m]arking, labeling, packaging, or ingredient requirements in addition to or different than, those made under" the respective statutes. 21 U.S.C. §§ 467(e) & 678. *fn4"

 Section 63 of the New York Agriculture and Markets Law was enacted on July 22, 1982, and became effective one year later. *fn5" The statute requires, in part, that products deemed under New York law to be imitation cheese or imitation cheese food bear the word "imitation" on their labels in letters of the same collor, on a contrasting background, and of equal size as the letters of the brand name or product designation whichever is larger. *fn6" The statute further provides that service food establishments which offer products containing imitation chees or imitation chees food must (a) post a sign on the premises which states the names of the foods containing imitation cheese or imitation cheese food in block letters at least three inches in height against a contrasting background; (b) state on their menus the names of the products containing imitation cheese or imitation cheese foood must (a) post a sign on the premises which states the names of the foods containing imitation cheese or imitation cheese food in block letters at least three inches in height against a contrasting background; (b) state on their menus the ames of the products containing imitation cheese or imitation cheese food immediately after the product designation on the menu in letters of equal size; and (c) conspicuously label any container used by consumers which contains imitation cheese or imitation cheese food product. *fn7"

 The Commissioner of the New York Department of Agriculture and Markets issued final regulations implementing the statute which were to become effective on February 1, 1984. Pending the outcome of this litigation, however, the Commissioner has agreed not to enforce the statute and its regulations. The regulations define "imitation" cheese as "any food which is similar in texture, color, flavor, tast, and appearance" to cheese. 1 NYCRR §§ 18.1(c) & (d). Thus, the New York regulations require the word imitation on nutritionally equivalent or superior substitute cheese products instead of the federal requirement of the word "substitute" or other common or descriptive term. This conflict in definition as well as the additional labeling, sign posting and menu notification requirements form the basis of plaintiff's claims.

 STANDING

 Defendants' initial argument that GMA lacks standing to bring this action is without merit. *fn8" The standing of an association to assert the rights of its members is well established. See Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1976); National Motor Freight Ass'n v. United States, 372 U.S. 246, 9 L. Ed. 2d 709, 83 S. Ct. 688 (1963). In Hunt, the Court stated that an association may have standing if:

 The association . . . allege[s] that its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out a justiciable case had the members themselves brought suit. . . . So long as this can be established, and so long as the nature of the claim and of the relief sought does not make the individual participation of each injured party indispensable to proper resolution of the cause, the association may be an appropriate representative of its members entitled to invoke the court's jurisdiction.

 432 U.S. at 342-43, quoting Warth v. Seldin, 422 U.S. 490, 511, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975).

 Plaintiff's members are engaged in the business of producing, selling and distributing food products throughout the United States. Affidavit of Sherwin Gardner, Vice President, Science and Technology, GMA, sowrn to January 17, 1984. Implementation of the New York statute will have an immediate and direct effect on them. See e.g., Affidavit of Thomas Brennan, District Manager of Industrial Products, Schreiber Foods, Inc. sworn to on January 12, 1984. Moreover, since "neither the claims asserted, nor the relief requested, requires the participation of individual members in the lawsuit," Hunt, 432 U.S. at 343, the individual members themselves are not indispensable parties. Under the Hunt standard, therefore, GMA has standing to assert the rights of its members in contesting the labeling provisions of the New York statute.

 Further, GMA -- as the representative of manufacturers and distributors of food products -- is a proper party to press a challenge to the sign and menu posting requirements of the New York statute even though those provisions apply only to food service establishments. Uncontroverted affidavits submitted by GMA fully support a finding that it's member will suffer direct and immediate harm in the form of lost sales as the result of the sign and menu posting requirements of the New York statute. Affidavit of Thomas Brennan, District Manager of Industrial Products, Schreiber Foods, Inc. sworn to on January 12, 1984; Affidavit of George W. Cawman, Vice President of Marketing, Schreiber Food, Inc. sworn to on December 13, 1983; Affidavit of Olindo DiFrancesco, President, Olindo's Food, Inc. sworn to on January 17, 1984. As indicated by the affidvit of Thomas Brennan, supra, the likely consequence of the sign and menu posting requirements is that food service establishments will purchase only natural cheese products in order to avoid compliance with the statute and the stigma associated with the term "imitation." I find therefore that under the Hunt standard, GMA also has standing to challenge the sign and menu posting requirements of Secton 63.

 PREEMPTION

 Both the FDA and the USDA agree that the sign and menu posting requirements of the New York statute are not preempted by the FDCA, FMIA or the PPIA. GMA's challenge to those provisions under the Commerce Clause will be addressed in a later section. The more difficult matter raised by the New York Imitation Cheese Statute is whether the labeling regulations are preempted by the respective federal statutes under the Supremacy Clause of the United States Constitution. The Commissioner argues that the federal regulations govern only the labeling of imitation cheese and do not extend to the labeling of food products which merely contain artificial cheese. Thus, defendants contend that the state is not preempted from issuing its own regulations in the related field. *fn9"

 A. The Federal Meat and Poultry Acts

 (1) The Preemptive Effect of the Federal ...


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