Free Motion for Preliminary Injunction - District Court of California - California

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 1 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Trenton H. Norris (California State Bar No. 164781) Sarah Esmaili (California State Bar No. 206053) ARNOLD & PORTER LLP 90 New Montgomery Street, Suite 600 San Francisco, CA 94105 Telephone: (415) 356-3000 Facsimile: (415) 356-3099 Email: [email protected] Email: [email protected] Peter L. Zimroth (pro hac vice) Kent A. Yalowitz (pro hac vice) Nancy G. Milburn (pro hac vice) ARNOLD & PORTER LLP 399 Park Avenue New York, NY 10022 Telephone: (212) 715-1000 Facsimile: (212) 715-1399 Email: [email protected] Email: [email protected] Email: [email protected] Attorneys for Plaintiff CALIFORNIA RESTAURANT ASSOCIATION

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION CALIFORNIA RESTAURANT ASSOCIATION, Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. CV-08-03685 CW (Related to No. CV-08-03247 CW) PLAINTIFF'S AMENDED NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Hearing Date: August 28, 2008 Hearing Time: 2:00 p.m. Courtroom: Courtroom 2, 4th Floor The Honorable Claudia Wilken Complaint filed: July 22, 2008 Notice of Removal filed: August 1, 2008

20 v. 21 22 23 24 25 26 27 28 Defendants. THE COUNTY OF SANTA CLARA and THE SANTA CLARA COUNTY PUBLIC HEALTH DEPARTMENT,

CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 2 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

AMENDED NOTICE OF MOTION AND MOTION PLEASE TAKE NOTICE AS AMENDED that on August 28, 2008 at 2:00 p.m., or as soon thereafter as the matter may be heard, in the courtroom of the Honorable Claudia Wilken, located in Courtroom 2, 4th Floor, of the Oakland Division of the United States District Court for the Northern District of California, at 1301 Clay Street, Oakland, California, Plaintiff California Restaurant Association ("Plaintiff" or "CRA") will move, and hereby moves, for an order granting Plaintiff a declaratory judgment and preliminary injunction in Plaintiff's action pursuant to 42 U.S.C. § 1983 and California Code of Civil Procedure § 1060 enjoining the Santa Clara County Public Health Department from enforcing Santa Clara County's Ordinance No. NS-300.793 on grounds of federal preemption, state preemption and violation of the right to freedom of speech guaranteed by the First Amendment of the United States Constitution and article I, section 2 of the California Constitution. This Amended Notice of Motion and Motion and the supporting papers herewith are filed pursuant to the Court's August 15, 2008 Order Granting Plaintiff's Administrative Motion for an Expedited Briefing Schedule. This Motion is based on this Notice of Motion and Motion, the Memorandum of Points and Authorities submitted in support of the Motion, the Appendix of Exhibits in support of the Motion, the Declaration of Michael Andres, the Declaration of Debra DeMuth and the exhibits thereto, the Declaration of William Holmberg and the exhibit thereto, the Declaration of Stephanie Quirantes and the exhibits thereto, the Declaration of Scott Randolph, the papers and pleadings on file in this action and upon such further briefs, evidence and oral argument as may be presented to the Court in connection with this Motion. Dated: August 18, 2008 ARNOLD & PORTER LLP

By:

___________/s/_________________ Trenton H. Norris Attorneys for Plaintiff CALIFORNIA RESTAURANT ASSOCIATION

-1CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 3 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14

TABLE OF CONTENTS Page STATEMENT OF FACTS ...................................................................................................................1 A. Nutritional Information in Restaurants .................................................................................1 B. Santa Clara County Ordinance No. NS-300.793 ..................................................................1 C. No Evidentiary Support for the Ordinance ...........................................................................2 SUMMARY OF ARGUMENT ............................................................................................................4 LEGAL STANDARD...........................................................................................................................5 ARGUMENT ........................................................................................................................................6 I. Federal Law Preempts the Ordinance ...........................................................................................6 A. Overview of the Nutrition Labeling and Education Act of 1990 ..........................................6 B. Under the NLEA, Statements Describing the Amount of Calories Are "Claims"................7 C. Under FDA Regulations, Statements Describing the Amount of Calories Are "Claims"................................................................................................................................7 D. Restaurants Have Flexibility in Disclosing Nutritional Information ....................................8

15 E. The NLEA Preemption Provision Applies to the Ordinance ................................................9 16 17 18 19 20 21 22 23 24 25 26 27 28 II. F. Theories Advanced in NYSRA Are Inconsistent with the NLEA and the FDA's Regulatory Definition of "Claim".........................................................................................9 1. NLEA and FDA Regulations Do Not Distinguish Between Qualitative and Quantitative Statements..........................................................................................10 2. Definition of "Claim" Does Not Distinguish Between Voluntary and Mandatory Statements...................................................................................................12 3. 21 U.S.C. § 343(r)(1) Does Not "Carve Out" Certain Claims from the Reach of That Provision...........................................................................................................13 G. Plaintiff's Interpretation Harmonizes Requirements of the NLEA.....................................18 The California Retail Food Code Preempts the Ordinance.........................................................19

III. The Ordinance Violates the First Amendment Rights of Plaintiff's Members...........................20 A. The Ordinance Will Cause Irreparable Harm by Impermissibly Compelling Speech.................................................................................................................................20 B. Plaintiff Is Likely to Succeed on the Merits........................................................................22 1. The Ordinance Fails Under Central Hudson ................................................................23 -iCASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 4 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

a. The Ordinance Does Not Advance the County's Asserted Interest in Preventing Obesity in a "Direct and Material Way"...............................................23 b. The Ordinance's Infringement on Speech Is More Extensive Than Necessary to Serve the County's Asserted Interest ................................................24 2. The Ordinance Fails Under United Foods ....................................................................25 3. Rational Basis Review Is the Wrong Standard .............................................................26 IV. The Ordinance Violates the Free Speech Rights of Plaintiff's Members Guaranteed by the California Constitution..........................................................................................................28

- ii CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 5 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cases:

TABLE OF AUTHORITIES Page(s)

Alaska Trojan Partnership v. Gutierrez, 425 F.3d 620 (9th Cir. 2005)......................................................................................... 8, 14 Arkansas Elec. Coop. Corp. v. Arkansas Pub. Serv. Comm'n., 461 U.S. 375 (1983) .......................................................................................................... 20 ARP Pharmacy Servs., Inc. v. Gallagher Bassett Servs., Inc., 138 Cal. App. 4th 1307 (2d Dist. (Div. 4) 2006) .............................................................. 29 Central Hudson Gas & Electric Corp. v. Public Serv. Commission of New York, 447 U.S. 557 (1980) ................................................................................................... passim Christensen v. Harris County, 529 U.S. 576 (2000) .......................................................................................................... 14 Cincinnati v. Discovery Network, Inc., 507 U.S. 410 (1993) .......................................................................................................... 24 Crown Pac. v. Occupational Safety & Health Review Comm'n, 197 F.3d 1036 (9th Cir. 1999)........................................................................................... 14 Downey v. Crabtree, 100 F.3d 662 (9th Cir. 1996)............................................................................................. 14 Edenfield v. Fane, 507 U.S. 761 (1993) .................................................................................................... 23, 27 Elrod v. Burns, 427 U.S. 347 (1976) .......................................................................................................... 21 English v. General Electric Co., 496 U.S. 72 (1990) .............................................................................................................. 6 Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141 (1982) ............................................................................................................ 6 Gerawan Farming, Inc. v. Kawamura, 33 Cal. 4th 1 (2004) ...................................................................................................... 5, 28 Gerawan Farming, Inc. v. Lyons, 24 Cal. 4th 468 (2000) ...................................................................................................... 28 Greater New Orleans Broad. Ass'n v. United States, 527 U.S. 173 (1999) .......................................................................................................... 24 Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (1995) .......................................................................................................... 21 International Dairy Foods Ass'n v. Amestoy, 92 F.3d 67 (2d Cir. 1996)............................................................................................ 21, 22

- iii CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 6 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Page(s) IT Corp. v. County of Imperial, 35 Cal. 3d 63 (1983) ........................................................................................................... 5 Johanns v. Livestock Mktg. Ass'n, 544 U.S. 550 (2005) .......................................................................................................... 29 Jones v. Rath Packing Co., 430 U.S. 519 (1977) ............................................................................................................ 6 Kasky v. Nike, Inc., 27 Cal. 4th 939 (2002) ...................................................................................................... 28 Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) .......................................................................................................... 24 McDermott v. Wisconsin, 228 U.S. 115 (1913) ............................................................................................................ 6 Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) ............................................................................................................ 6 National Electric Manufacturers Ass'n v. Sorrell, 272 F.3d 104 (2d Cir. 2001).............................................................................................. 26 New York State Restaurant Ass'n v. New York City Board of Health, 509 F. Supp. 2d 351 (S.D.N.Y. 2007)................................................................. 7, 8, 10, 12 New York State Restaurant Ass'n v. New York City Board of Health, No. 08 Civ. 1000, 2008 WL 1752455 (S.D.N.Y. Apr. 16, 2008) ............................... 10, 12 Pacific Gas & Electric Co. v. Public Utilities Comm'n of California, 475 U.S. 1 (1986) ........................................................................................................ 21, 25 Public Citizen, Inc. v. Shalala, 932 F. Supp. 13 (D.D.C. 1996) ......................................................................................... 17 Riley v. National Federation of the Blind of N.C., Inc., 487 U.S. 781 (1988) .......................................................................................................... 21 Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) .................................................................................................... 24, 25 Sammartano v. First Judicial District Court, in & for County of Carson City, 303 F.3d 959 (9th Cir. 2002)............................................................................................. 20 Sherwin-Williams Co. v. City of Los Angeles, 4 Cal. 4th 893 (1993) ....................................................................................................... 20 United States v. Haggar Apparel Co., 526 U.S. 380 (1999) ............................................................................................................ 8 United States v. Mead Corp., 533 U.S. 218 (2001) .................................................................................................................... 8 United States v. United Foods, Inc., 533 U.S. 405 (2001) ................................................................................................... passim - iv CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 7 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Page(s) White v. Davis, 30 Cal. 4th 528 (2003) ........................................................................................................ 5 Wooley v. Maynard, 430 U.S. 705 (1977) .......................................................................................................... 21 Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985) .............................................................................................. 21, 26, 27 Statutes, Rules and Other Administrative Materials: Nutrition Labeling & Education Act, Pub. L. No. 101-535, 106 Stat. 4501 (1990) ........ passim 21 U.S.C. § 321(k) .................................................................................................................. 17 21 U.S.C. § 321(m) ................................................................................................................. 17 21 U.S.C. § 343 ......................................................................................................................... 6 21 U.S.C. § 343(q) .......................................................................................................... 6, 7, 15 21 U.S.C. § 343(r) ............................................................................................................ passim 21 U.S.C. § 343-1(a) ........................................................................................................ passim 21 C.F.R. § 101.9 ............................................................................................................. passim 21 C.F.R. § 101.10 ........................................................................................................... passim 21 C.F.R. § 101.13 ........................................................................................................... passim 21 C.F.R. § 101.45 .............................................................................................................. 8, 16 38 Fed. Reg. 2125 (Jan. 19, 1973) ............................................................................................ 6 41 Fed. Reg. 51001 (Nov. 19, 1976)......................................................................................... 6 58 Fed. Reg. 2302 (Jan. 6, 1993) ...................................................................................... 11, 12 61 Fed. Reg. 40320 (Aug. 2, 1996)......................................................................................... 17 Cal. Const. art. I, § 2 ........................................................................................................... 5, 28 Cal. Const. art. XI, § 7 ............................................................................................................ 19 Cal. Health & Safety Code § 113703.................................................................................. 4, 19 Cal. Health & Safety Code § 113705.................................................................................. 4, 19 Cal. Health & Safety Code § 114089.................................................................................. 4, 19 San Francisco Health Code §§ 468-468.8............................................................................... 10 Santa Clara County Ord. Code §§ A18-351­366 ............................................................ passim -vCASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 8 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1

MEMORANDUM OF POINTS AND AUTHORITIES STATEMENT OF FACTS A. Nutritional Information in Restaurants

Most restaurants in the unincorporated area of the County of Santa Clara publish no nutrition information at all about their food. Santa Clara County (the "County") does not wish to alter that fact. Instead, it has targeted a small number of restaurants that are affiliated with large chains--many of which have, for years, published comprehensive nutrition information about their food in brochures available at the restaurants, on posters, on packaging, on tray liners and on websites.1 The County wants to alter the way in which these few targeted restaurants convey nutrition information and has passed a new law, Santa Clara County Ordinance No. NS-300.793 (the "Ordinance"), requiring them to display statements showing calories on their menu boards and, in some cases, calories, saturated fat, trans fat, carbohydrates and sodium on their menus. These restaurants strongly disagree with the County's approach. They question the efficacy of the Ordinance in reducing obesity--the County's stated goal in passing the new law. They believe that there are better ways to communicate with their customers about health and nutrition, and that the new law may be counterproductive, with an overemphasis on a limited number of nutrients that can interfere with a healthy, balanced diet. See, e.g., DeMuth Decl. ¶ 12; Quirantes Decl. ¶¶ 15-18. The restaurants' views are earnestly held and well grounded. B. Santa Clara County Ordinance No. NS-300.793

The Ordinance amends Division A18 of the Santa Clara County Ordinance Code to require chain restaurants within the unincorporated area of the County with 14 or more establishments in the State of California to make statements showing select nutritional information on their menu boards, menus and food tags in the precise manner prescribed by the law. On their menu boards

See, e.g., Declaration of Michael Andres in Support of Plaintiff's Motion for Declaratory Relief and a Preliminary Injunction, dated July 17, 2008 ("Andres Decl.") ¶ 4; Declaration of Debra DeMuth in Support of Plaintiff's Motion for Declaratory Relief and a Preliminary Injunction, dated July 16, 2008 ("DeMuth Decl.") ¶¶ 5-9; Declaration of William Holmberg in Support of Plaintiff's Motion for Declaratory Relief and a Preliminary Injunction, dated July 17, 2008 ("Holmberg Decl.") ¶ 3; Declaration of Stephanie Quirantes in Support of Plaintiff's Motion for Declaratory Relief and a Preliminary Injunction, dated July 15, 2008 ("Quirantes Decl.") ¶¶ 7-13. -1CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 9 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

and food tags, these restaurants must make statements showing calorie content next to each menu item, in a size and typeface at least as prominent as that used for the name or price of the menu item. Santa Clara County Ord. Code § A18-353(c)(i). On their menus, these restaurants must make statements showing calorie content, saturated fat, trans fat, carbohydrates and sodium next to or beneath each menu item, also in a size and typeface at least as prominent as that used for the name or price of the menu item. Id. § A18-353(b)(i). Menus must further include a clear and conspicuous statement of the recommend daily limits for both saturated fat and sodium in a 2,000 calorie daily diet. Id. § A18-353(b)(ii).2 Failure to make these disclosures subjects restaurants to governmental sanction. Id. § A18-354. The Ordinance has established an inflexible regime. The new law rigidly requires prominent display of calories on both menu boards and food tags and calories, saturated fat, trans fact, carbohydrates and sodium on menus. It applies equally to customized and combination offerings. In such cases, the new law requires the restaurants' statements to show a "range," minimum to maximum, of the possible calories for each size offered for sale. Id. § A18-353(d). These "range" postings have been criticized as not useful to customers. Holmberg Decl. ¶ 4; Declaration of Scott Randolph in Support of Plaintiff's Motion for Declaratory Relief and a Preliminary Injunction, dated July 16, 2008 ("Randolph Decl.") ¶ 11. C. No Evidentiary Support for the Ordinance

No one knows how to reverse the trend of increasing obesity in the United States. Even on subjects as seemingly simple as the communication of nutrition information and how (or whether) consumers use the information, there are questions but no answers. After more than a decade of comprehensive nutrition labeling on packaged foods mandated by federal law, the incidence of obesity continues to rise. With respect to the much more complicated issue of foods sold by the variety of restaurants in the United States, one recent government-sponsored report concluded that

The Ordinance further requires the restaurants that use menu boards or food tags to make statements about calories, saturated fat, trans fat, carbohydrates and sodium in printed menus, pamphlets, brochures, posters or similar documents that are plainly visible to consumers at the point of ordering. Santa Clara County Ord. Code § A18-353(c)(ii). -2CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

2

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 10 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

there is no public health consensus on how consumers use nutrition information in restaurants or whether such information could help reduce the incidence of obesity: There is a clear need for more research regarding how the provision of nutrition information, claims (such as "low calorie"), and symbols influence consumer preference and choice for away-from-home food consumption situations. Of particular concern is how, when, and why consumers use nutrition information and claims during their decisionmaking processes. More specifically, a better understanding is needed of the types of factors that moderate consumers' responses to the provision of nutrition information and claims for away-from-home foods. The Keystone Forum on Away-From-Home Foods: Opportunities for Preventing Weight Gain and Obesity, Final Report, The Keystone Center, Washington, D.C. (May 2006), at 13 ("Keystone Report"), attached hereto as Appendix Exhibit I. The Report suggests many unanswered questions: How and where should information be provided? Under what circumstances is current behavior influenced and under what circumstances is future behavior influenced? For example, if consumers consume an extra 100 calories at lunch, will they eat a lighter dinner? Or, if they consume 100 fewer calories at lunch, will they replace these calories at other meals or between meals? Will they exercise more, or less? See Keystone Report 84. Dr. David Allison, one of the country's leading authorities on obesity, echoed this conclusion in analyzing the efficacy of a regulation adopted by the New York City Board of Health, which is similar to Santa Clara County's Ordinance. Dr. Allison concluded, based on an extensive review of the scientific literature, that no evidence supported the hope that posting calories on menu boards would lead to reduced obesity: [T]here is no body of data showing that implementation of R81.50 [New York City's regulation] would affect actual behavior or weight either in the short-term or long-term nor is there any body of evidence that the specific manner in which the R81.50 would require provision of caloric information would lead to better results in the short-term or long-term than any other method. Thus, I conclude that there is not competent and reliable evidence that providing restaurant patrons with calorie information on menu items will reduce individual or population levels of obesity. Nor is there evidence that the method of providing caloric information mandated by R81.50 will reduce levels of obesity more than the methods -3CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 11 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

currently used by the affected restaurants to provide this information. Exhibit E pp. 29-30 ("Allison Decl.") to DeMuth Decl. (emphasis in original). Dr. Allison went on to state that only "conjecture" could be drawn from the existing research. Id. at 33. SUMMARY OF ARGUMENT First, the Ordinance is preempted by federal law. By its terms, the Nutrition Labeling and Education Act of 1990 ("NLEA") subjects restaurants to regulations promulgated by the Food and Drug Administration ("FDA") concerning "nutrition claims." 21 U.S.C. § 343(r)(2); see 21 C.F.R. 101.13(b)(1). Further, that federal statute expressly preempts state laws like the Ordinance, in which a state or local entity "directly or indirectly" establishes any requirement respecting nutrition claims that is "not identical" to the regulatory requirements of federal law. 21 U.S.C. § 343-1(a)(5). Because the Ordinance imposes food labeling requirements different from (i.e. not "identical to") the federal regulations, it is expressly preempted by the NLEA and void under the Supremacy Clause. Second, the Ordinance is also preempted by California state law. The California Retail Food Code, Cal. Health & Safety Code § 113703 et seq. ("CRFC"), fully occupies the field of "health and sanitation standards for retail food facilities . . . ." Cal. Health & Safety Code § 113705. The "whole field" occupied by the CRFC includes the labeling of food in restaurants, including nutrition information. See Cal. Health & Safety Code § 114089(a), (b)(5). The requirements of the Ordinance thus fall within this fully occupied field of state regulation. Third, the Ordinance violates the First Amendment rights of Plaintiff's members by compelling them to speak and to convey a viewpoint with which they do not agree. The Supreme Court has consistently reviewed burdens on lawful and non-misleading commercial speech by requiring the government to prove that its regulation will directly advance a substantial public interest in a manner that is narrowly drawn to achieve the government's objective. Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of New York, 447 U.S. 557, 564 (1980). More recently, the Supreme Court has questioned whether this level of intermediate scrutiny is adequate to protect commercial speech and has applied even stricter scrutiny to laws that compel commercial speech. -4CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 12 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

United States v. United Foods, Inc., 533 U.S. 405, 409-11 (2001). The Ordinance cannot survive under either standard of review. Under Central Hudson, the County cannot carry its burden of demonstrating that the Ordinance will be effective in advancing the County's stated purpose of reducing obesity rates. Additionally, under Central Hudson, the County cannot explain why reasonable and less burdensome alternatives would be ineffective. The Ordinance also cannot pass muster under the holding of United Foods. There, the Supreme Court held that, even in the context of commercial speech, the government may not force a private party to convey the government's message as if it were the private party's message when the private party wants to convey a different message or no message at all. Fourth, the Ordinance violates Plaintiff's free speech rights guaranteed by Article I, section 2 of the California Constitution. Article I's free speech clause, which is "broader and greater" than the First Amendment, affords at least intermediate scrutiny (i.e., Central Hudson) to cases implicating free speech rights of commercial speakers. Gerawan Farming, Inc. v. Kawamura, 33 Cal. 4th 1, 15, 22 (2004) (internal quotations omitted). Thus, under this standard, the Ordinance violates the Plaintiff's members' free speech rights guaranteed by the California Constitution. LEGAL STANDARD Generally, a court determining whether to issue a preliminary injunction looks at two interrelated factors. See White v. Davis, 30 Cal. 4th 528, 554 (2003) (citing IT Corp. v. County of Imperial, 35 Cal. 3d 63, 69-70 (1983)). First, the court considers the likelihood that the plaintiff will prevail on the merits at trial. Id. Second, the court balances the interim harm that the plaintiff is likely to sustain if an injunction is denied with the harm that the defendant may suffer if an injunction is issued. Id. "The ultimate goal of any test to be used in deciding whether a preliminary injunction should issue is to minimize the harm which an erroneous interim decision may cause." IT Corp., 35 Cal. 3d at 73.

-5CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 13 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I.

ARGUMENT FEDERAL LAW PREEMPTS THE ORDINANCE The Supremacy Clause permits Congress to preempt any state law that conflicts with the exercise of federal power. "Pre-emption fundamentally is a question of congressional intent and when Congress has made its intent known through explicit statutory language, the courts' task is an easy one." English v. General Elec. Co., 496 U.S. 72, 78-79 (1990) (citation omitted). Federal regulations "have no less a pre-emptive effect than federal statutes." Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153 (1982). Enforcement of a preempted law imposes irreparable harm. Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381 (1992). A. Overview of the Nutrition Labeling and Education Act of 1990

The federal government has been regulating the labeling of foods in interstate commerce since Congress enacted the Pure Food and Drug Act of 1906; and since that time, there have been state labeling laws that have been impliedly and expressly preempted by federal law. See, e.g., McDermott v. Wisconsin, 228 U.S. 115 (1913); Jones v. Rath Packing Co., 430 U.S. 519, 540-43 (1977). For many years, the FDA has regulated nutrition labeling for foods in interstate commerce, including restaurant foods. See 38 Fed. Reg. 2125 (1973); 41 Fed. Reg. 51001 (1976). In 1990, Congress enacted the Nutrition Labeling and Education Act. 21 U.S.C. §§ 301, 343, 343-1. The NLEA has two principal substantive provisions, each of which has a corresponding preemption provision. The provision relevant here requires the FDA to regul ate health and nutrition "claims" made about food. 21 U.S.C. § 343(r). This power extends to all food in interstate commerce, including restaurant food (with limited exceptions not applicable here). 21 U.S.C. § 343(r)(5)(B). State laws about making nutrient content claims in the labeling of food-- including restaurant food--are preempted to the extent that they impose requirements that are not identical to the federal regulatory regime. 21 U.S.C. § 343-1(a)(5). Another provision of the NLEA sets forth detailed requirements for nutrition information labels (i.e., the familiar "Nutrition Fact Panel" on packaged food). 21 U.S.C. § 343(q). The NLEA does not require restaurants to post nutrition information labels, and restaurant food is excluded

-6CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 14 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

from operation of the corresponding express preemption provision. 21 U.S.C. §§ 343(q)(5)(A), 343-1(a)(4). Thus, the dispositive preemption issue is this: when restaurants post statements of nutritional amount on their menus--e.g., "100 calories"--are such statements "claims" within the meaning of the NLEA and implementing regulations? See 21 U.S.C. § 343(r)(1); 21 C.F.R. § 101.13(b)(1). If so, they are covered by the express preemption provision that corresponds to subsection 343(r), and non-identical state laws are preempted. 21 U.S.C. § 343-1(a)(5). If the statements are not "claims" within the meaning of the statute, state laws about them are not preempted by the NLEA's express preemption provisions. 21 U.S.C. § 343-1(a)(4). B. Under the NLEA, Statements Describing the Amount of Calories Are "Claims"

Subsection (r) declares food "misbranded" if it bears a "claim" unless the claim comports with applicable regulations. See 21 U.S.C. §§ 343(r)(1), (r)(2)(A)(i). The statute goes on to instruct the FDA to promulgate regulations that "permit statements describing the amount and percentage of nutrients in food which are not misleading and are consistent with the terms defined in [§ 343(r)]." NLEA, Pub. L. No. 101-535, § 3(b)(1)(A)(iv), 106 Stat. 4501 (set out in Historical Notes to 21 U.S.C.A. § 343). Thus, Congress specifically intended that the FDA promulgate regulations governing "statements describing the amount" of calories and other nutrients--such as "100 calories." Such statements are "claims" under the statute if they meet the FDA's regulatory definitions of "claims." C. Under FDA Regulations, Statements Describing the Amount of Calories Are "Claims"

Consistent with these statutory directives, FDA regulations confirm that a statement describing the amount of calories in numerical terms is a "claim" within the meaning of the statute and regulations. In 21 C.F.R. § 101.13(b)(1), the FDA defines an "expressed nutrient content claim" as "any direct statement about the level (or range) of a nutrient in the food, e.g., `low sodium' or `contains 100 calories.'" 21 C.F.R. § 101.13(b)(1) (emphasis supplied). Thus, the statement "contains 100 calories" is a claim. See New York State Rest. Ass'n v. New York City Bd. of Health, 509 F. Supp. 2d 351, 359-60 (S.D.N.Y. 2007) ("NYSRA I") ("[The definition in Section -7CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 15 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

101.13(b)(1)] appears to cover both an obvious characterization (`low sodium') as well as a simple statement about the amount of a nutrient in a food (`contains 100 calories')....Thus the FDA regulations treat a simple factual statement as to a nutrient amount as within the scope of § 343(r) and subject to (although expressly permitted by) FDA regulations."). The FDA's regulations, promulgated after notice and comment, are of "controlling weight," United States v. Haggar Apparel Co., 526 U.S. 380, 392 (1999), "binding in the courts unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute." United States v. Mead Corp., 533 U.S. 218, 227 (2001); see Alaska Trojan P'ship v. Gutierrez, 425 F.3d 620, 628 (9th Cir. 2005) ("When a statute or regulation defines a term, that definition controls, and the court need not look to the dictionary or common usage."). D. Restaurants Have Flexibility in Disclosing Nutritional Information

The FDA has promulgated a special rule for nutrient content claims by restaurants. 21 C.F.R. § 101.10. The rule expressly grants restaurants flexibility to present accurate information concerning nutrient claims in any reasonable manner: Nutrition labeling in accordance with § 101.9 [specifying nutrition facts required on labels] shall be provided upon request for any restaurant food or meal for which a nutrient content claim . . . is made, except that information on the nutrient amounts that are the basis for the claim (e.g., "low fat, this meal provides less than 10 grams of fat") may serve as the functional equivalent of complete nutrition information as described in § 101.9. Nutrient levels may be determined by nutrient data bases, cookbooks, or analyses or by other reasonable bases that provide assurance that the food or meal meets the nutrient requirements for the claim. Presentation of nutrition labeling may be in various forms, including those provided in § 101.45 [concerning certain unprocessed foods] and other reasonable means. 21 C.F.R. § 101.10. Thus, the FDA has given restaurants great flexibility to decide how to communicate nutrient information to customers and how to determine nutrient levels. For example, a restaurant may communicate nutrition information through in-store signs, posters, brochures, notebooks or charts, as contemplated in 21 C.F.R. § 101.45. Restaurants also may communicate nutrition claims through various "Nutritional Facts" formats set out in 21 C.F.R. § 101.9.

-8CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 16 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Section 101.10 allows restaurants to present nutrition information through "other reasonable means" as well. E. The NLEA Preemption Provision Applies to the Ordinance

The NLEA expressly preempts state laws like Santa Clara County's Ordinance, in which a state or local entity "directly or indirectly" establishes any requirement respecting nutrition "claims" that is "not identical to" the regulatory requirements of federal law. 21 U.S.C. § 343-1(a)(5). Because the Ordinance imposes requirements different from (i.e., "not identical to") the federal regulations, it is expressly preempted by the NLEA and void under the Supremacy Clause. The preemption statute provides, in part: no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce -- *** (5) any requirement respecting any claim of the type described in section 343(r)(1) of this title, made in the label or labeling of food that is not identical to the requirement of section 343(r) of this title, except a requirement respecting a claim made in the label or labeling of food which is exempt under section 343(r)(5)(B) [concerning certain kinds of claims by restaurants about cholesterol, saturated fat and dietary fiber and nutrients determined by the FDA to increase the risk of disease].... 21 U.S.C. § 343-1(a)(5) (emphasis supplied). There can be no doubt that the Ordinance imposes requirements "respecting any claim of the type described in section 343(r)(1)" because statements of the amount of calories, saturated fat, trans fat, carbohydrates and sodium are nutrient content "claims." And the Ordinance imposes requirements not "identical" to those of the federal law and its accompanying regulations. 21 C.F.R. § 101.10. In contrast to the significant flexibility afforded by § 101.10, the County dictates the content and presentation of nutritional claims. F. Theories Advanced in NYSRA Are Inconsistent with the NLEA and the FDA's Regulatory Definition of "Claim"

Santa Clara County's Ordinance is not the first of its kind. New York City promulgated a

-9CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 17 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

similar regulation in December 2006. 3 After a federal district court struck down that regulation on preemption grounds (NYSRA I, 509 F. Supp. 2d at 362-63), New York passed a revised version. The district court then upheld the revised regulation. See New York State Rest. Ass'n v. New York City Bd. of Health, No. 08 Civ. 1000, 2008 WL 1752455 (S.D.N.Y. Apr. 16, 2008) ("NYSRA II"). The decision in NYSRA II is on appeal to the Second Circuit. In the NYSRA cases, New York City and its amici have advanced three theories against preemption. These theories all center on the question whether a statement of nutritional amount-- e.g., "100 calories"--is a "claim" within the meaning of the statute and regulations. First, New York City argued that only qualitative statements (e.g. "low in fat") should be considered "claims" and that quantitative statements (e.g., "100 calories") should not be considered "claims" under the statute. The District Court rejected that theory in NYSRA I. Second, New York City argued that statements of nutrition "mandated" by a state or municipality are not "claims." Although the District Court in NYSRA II adopted that theory, New York City effectively abandoned it on appeal. Third, the Second Circuit invited the FDA to file an amicus brief. Although the FDA agreed that these first two arguments are incorrect, the FDA offered a third argument against preemption: there is a provision of the NLEA that excludes from the category of "claims" statements of nutrient amounts that appear as part of Nutrition Fact Panels; and that provision should also apply to statements on restaurant menus. (The Second Circuit has yet to rule on this theory.) We discuss these theories below. 1. NLEA and FDA Regulations Do Not Distinguish Between Qualitative and Quantitative Statements

The first theory offered by New York City was that the statement "100 calories" is not a "claim" within the meaning of the NLEA because it is a "quantitative" statement rather than a "qualitative" statement. This theory ignores the FDA's controlling regulations. The FDA defines an "expressed nutrient content claim" as "any direct statement about the level (or range) of a
3

The City and County of San Francisco enacted a comparable ordinance, Ordinance 40-08 (amending San Francisco Health Code §§ 468-468.8), on March 24, 2008. On July 3, 2008, Plaintiff filed an action challenging the constitutionality of Ordinance 40-08 in the United States District Court for the Northern District of California. - 10 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 18 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

nutrient in the food, e.g., `low sodium' or `contains 100 calories.'" 21 C.F.R. § 101.13(b)(1) (emphasis supplied). "Any direct statement" is different from "any qualitative statement." The FDA did not merely define "claim" to include "any direct statement" such as "contains 100 calories." It also went on to add regulations governing what are permissible and what are impermissible express and implied claims. Subsection 101.13(i) thus provides that a label "may contain a statement about the amount or percentage of a nutrient," so long as "[t]he statement does not in any way implicitly characterize the level of the nutrient in the food [such implicit characterizations being subject to other subparagraphs] and it is not false or misleading in any respect (e.g., `100 calories' or `5 grams of fat')." 21 C.F.R. § 101.13(i)(3) (emphasis supplied). In short, the FDA regulations promulgated under authority of subsection (r) define a "claim" to include "contains 100 calories" and expressly permit a claim of "100 calories." Section 3(b)(1)(A)(iv) of the NLEA specifically instructed the FDA to promulgate such a regulation--i.e., one that would "permit statements describing the amount and percentage of nutrients in food which are not misleading and are consistent with the terms defined in [§ 343(r)]." Pub. L. No. 101-535, § 3(b)(1)(A)(iv), 106 Stat. 4501 (emphasis supplied) (set out in Statutory Note to 21 U.S.C.A. § 343). This provision also instructs the agency that its regulations "shall identify claims described in section [343(r)(1)(A)] which comply with section [343(r)(2)]." Id. § 3(b)(1)(A)(i). The FDA's notice of final rulemaking for these regulations confirms the agency's intent to govern simple factual information like "100 calories." During the notice and comment period, the FDA was asked to exclude statements about "simple factual information" from the definition of "nutrient content claim" on the theory that such a statement is not "a claim that `characterizes the level of any nutrient'" within the meaning of the statute. 58 Fed. Reg. 2302, 2303 (Jan. 6, 1993). The comment argued that "a statement of the type contained in nutrition labeling--for example, that a food contains 25 calories per serving...--is not a claim characterizing the level of the nutrient." Id. Based on the statutes discussed above, the FDA rejected that contention, embraced the view that a quantitative factual statement about the amount of a nutrient is a "claim" that "characterizes the level" of the nutrient within the meaning of the statute, and promulgated final and binding - 11 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 19 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

regulations to that effect. The comment had argued that section 403(r)(1) of the Act excluded from the category of claims quantitative statements like those that appear in the Nutrition Fact Panel. But the FDA pointed out that the words of 403(r)(1) as well as the legislative history of the provision specifically state[] that the identical information [i.e., the identical information that would be required in the nutrition fact panel required by subsection (q)] will be subject to the descriptor requirements if it is included in a statement in another portion of the label (136 Congressional Record H5841 (July 30, 1990)).... Furthermore, section 3(b)(1)(A)(iv) of the 1990 amendments provides that the mandated regulations "shall permit statements describing the amount and percentage of nutrients in food which * * * are consistent with the terms defined in section 403(r)(2)(A)(i) of such Act." Again, if statements of the amount and percentage of nutrients were not subject to section 403(r)(1)(A) of the act, there presumably would have been no need for Congress to express its desire that such claims be permitted by the regulations. Accordingly, FDA concludes that section 403(r)(1)(A) of the act and therefore these final regulations apply to statements of the amount of a nutrient in food as well as to statements of the level of a nutrient in food. 58 Fed. Reg. at 2303-04 (emphasis supplied). The court in NYSRA I found these regulations dispositive on this argument. NYSRA I, 509 F. Supp. 2d at 359-60. 2. Definition of "Claim" Does Not Distinguish Between Voluntary and Mandatory Statements

In deciding NYSRA I, the district court suggested in dicta that the NLEA's definition of "claims" covers only "voluntary" statements, and that statements "mandated" by state law are not "claims." New York City altered its regulation as the NYSRA I court had suggested. In NYSRA II, the district court upheld the altered regulation. NYSRA II, 2008 WL 1752455, at *5. The district court's decision in NYSRA II that only "voluntary" statements are "claims" under the NLEA ignores the FDA's regulatory definition of "claim" (which definition the district court correctly found controlling in NYSRA I). The "voluntary/mandatory" theory cannot be reconciled with the FDA's dispositive definition. The FDA's definition says that a "claim" is "any direct statement." 21 C.F.R. § 101.13(b)(1). It does not say that a "claim" is "any voluntary direct statement." Furthermore, the FDA's regulations do use the word "voluntary" in another section. In permitting (but not mandating) certain statements on the nutrition information fact panel, section 101.9 specifies that those "permitted" statements on the nutrition panel are "voluntary." In each - 12 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 20 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

instance, the word appears as "VOLUNTARY" in capital letters. 21 C.F.R. § 101.9(c). In contrast, the word "voluntary" does not appear at all in the regulatory definition of claims, further emphasizing that "claim" is not limited to "voluntary" statements.4 Further, the purpose of a preemption statute is to preclude state mandates. If the "voluntary/mandatory" distinction were accepted, the very thing the preemption statute is designed to prevent--state mandates--would be removed from the coverage of the statute by the very fact that the state mandates it. A federal statute that expressly prohibits non-identical state mandates would become ineffective by the very fact that a locality adopts a non-identical state mandate. That is not a sensible way to read a preemption statute. Finally, the "voluntary/mandatory" distinction would lead to an anomalous conflict between state and federal law with regard to statements that all agree are "claims" under the NLEA. Under the "voluntary/mandatory" theory, states or localities could mandate sellers of packaged foods to "disclose" on the front label the number of calories (or any other nutrient). Similarly, if a state or locality were to "mandate" labeling of "low sodium" foods, the preemption statute would not apply because the statements would not be "voluntary" and thus would not be "claims" under the "voluntary/mandatory" distinction. Yet it is beyond dispute that "low sodium" is a "claim" under the NLEA--one of the very examples used in the definition of expressed nutrient "claims" in section 101.13(b)(1) of the FDA's regulations. 3. 21 U.S.C. § 343(r)(1) Does Not "Carve Out" Certain Claims from the Reach of That Provision

At the request of the Second Circuit, the FDA submitted an amicus brief in the appeal of NYSRA II. The FDA rejected the two theories advanced by New York City. However, it came up with a third theory against preemption. The FDA argued that the statement "100 calories" on a menu is not a "claim" because a portion of the statute "carves [it] out of the scope of nutrient

4

Section 101.9(c) of the FDA's regulations lists those statements that must be on the fact panel and those that are permitted but not mandated. The former include "calories." The latter (non mandatory) are: 21 C.F.R. § 101.9(c)(1)(iii) (calories from saturated fat), (2)(iii) (polyunsaturated fat), (2)(iv) (monounsaturated fat), (5) (potassium), (6)(i)(A) (soluble fiber), (6)(i)(B) (insoluble fiber), (6)(iii) (sugar alcohol), (6)(iv) (other carbohydrates). - 13 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 21 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

content claims." Brief of Amicus Curiae Food and Drug Administration at 12, New York State Restaurant Ass'n v. New York City Bd. of Health, No. 08-1892-cv (2d Cir. May 29, 2008) ("FDA Br."). According to the amicus brief, the carve-out appears in the unnumbered portion of section 343(r)(1), which provides, in part: [1] A statement of the type required by paragraph (q) [2] that appears as part of the nutrition information required or permitted by such paragraph is not a claim.... 21 U.S.C. § 343(r)(1). To come within the carve-out, the statement must meet both portions of the statutory sentence. It is true that a statement such as "100 calories" is "[a] statement of the type required by paragraph (q)." But such a statement in isolation on a menu does not "appear as part of the nutrition information required or permitted by such paragraph." In its Second Circuit brief, the FDA argued (incorrectly) that a statement of calories on the menu in a restaurant "appears as part of the nutrition information required or permitted by such paragraph [(q)]" (21 U.S.C. § 343(r)(1))--and is therefore "not a claim"--on the theory that a menu is "a place appropriate for such information at the point of purchase." FDA Br. 12. The FDA's amicus brief warrants no deference, as it does not comport with the statute or the FDA's regulations, is contrary to what the FDA said in its notice of rulemaking (p. 12 supra) and was not "arrived at after, for example, a formal adjudication or noticeand-comment rulemaking." See Christensen v. Harris County, 529 U.S. 576, 587 (2000).5 Contrary to the FDA's amicus brief theory, the statute does not say "appears in a place appropriate for such information at the point of purchase." It says "appears as part of the nutrition

5

See also Alaska Trojan P'ship v. Gutierrez, 425 F.3d 620, 628, 630 (9th Cir. 2005) ("[a]n agency's interpretation of a regulation must `conform with the wording and purpose of the regulation'"; rejecting agency's interpretation of regulatory term as it created internal inconsistency within the regulation as a whole) (citation omitted); Crown Pac. v. Occupational Safety & Health Review Comm'n, 197 F.3d 1036, 1038-40 (9th Cir. 1999) ("we need not defer to the Secretary [of Labor]'s interpretation where an `alternative reading is compelled by the regulation's plain language'"; declining to defer in the case before it, as the Secretary's construction "stretches the plain language of the regulation beyond its `plain and natural' meaning") (citation omitted); Downey v. Crabtree, 100 F.3d 662, 666 (9th Cir. 1996) (where Bureau of Prison's program statements "are not subject to the `rigors of the Administrative Procedure Act,'" they are, "only `entitled to some deference'"; rejecting agency's interpretation of statutory term because, "[w]hen the Bureau's `interpretation is...in conflict with the plain language of the statute, deference is [not] due'") (citations omitted; alteration to text in original). - 14 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 22 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

information required or permitted by such paragraph [(q)]." 21 U.S.C. § 343(r)(1). An isolated statement of nutritional amount does not "appear[] as part of the nutrition information required or permitted by [subsection (q)]." Subsection (q) does not require or permit such isolated statements. Rather, it requires a comprehensive and uniform set of nutrition information, requirin g the presentation of complete nutrition information and permitting the inclusion of certain optional nutrients (e.g., potassium). Subsection (q) reads, in part: "nutrition information that provides--the serving size, * * * the number of servings...per container, * * * the total number of calories...in each serving, * * * the amount of the following nutrients: [t]otal fat, saturated fat, cholesterol, sodium, total carbohydrates, complex carbohydrates, sugars, dietary fiber, and total protein contained in each serving, * * * [and] any vitamin, mineral, or other nutrient required [or permitted by regulation]." 21 U.S.C. § 343(q)(1); see NLEA, Pub. L. No. 101-535, § 2(b)(1)(C) (1990) (set out in historical notes after 21 U.S.C.A. § 343). Isolated statements of calories or other nutrients do not "appear as part" of the comprehensive nutrition information demanded by subsection (q). Rather, they highlight the importance of limited aspects of the food. Following enactment of the NLEA, the FDA promulgated a regulation implementing the statutory text quoted above. 21 C.F.R. § 101.13(c). The regulation represents the FDA's interpretation of the statute and was promulgated after notice and comment. That regulation contains three elements controlling when the "carve out" applies and when it does not. The regulation provides: [1] Information that is required or permitted by § 101.9...to be declared in nutrition labeling, and [2] that appears as part of the nutrition label, is not a nutrient content claim and is not subject to the requirements of this section. [3] If such information is declared elsewhere on the label or in labeling, it is a nutrient content claim and is subject to the requirements for nutrient content claims. 21 C.F.R. § 101.13(c) (emphasis supplied). The County's Ordinance does not satisfy any of these three elements. 1. Section 101.13(c) makes clear that the "carve out" applies only to "[i]nformation that

is required or permitted by § 101.9...to be declared in nutrition labeling." 21 C.F.R. § 101.13(c) (element [1] quoted above). The FDA promulgated section 101.9 under instructions from Congress - 15 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 23 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

that the agency ensure that the public can understand the "relative significance [of the information] in the context of a total daily diet." NLEA, § 2(b)(1)(A) (set out in Historical and Statutory Notes to 21 U.S.C.A. § 343). Section 101.9 thus specifies that the "nutrition information" to be declared in "nutrition labeling" must reflect uniformly determined serving sizes (§ 101.9(b)), must declare a uniform and comprehensive set of information (§ 101.9(c)), and must appear in specified formats (§ 101.9(d)). The Ordinance fails to meet these requirements. To begin, the Ordinance does not apply "per serving," but instead requires total number of calories, total number of grams of saturated fat, total number of grams of trans fat, total number of grams of carbohydrates and total number of milligrams of sodium. Santa Clara County Ord. Code § A18-353(a). The Ordinance requires menus to list the gross number of nutrients in any menu item--even an item intended to be shared. In addition, the Ordinance requires only selected statements of nutritional amount, not the uniform set of nutrition information demanded in 21 C.F.R. § 101.9(c). Section 101.9(c) states that "nutrition information" in nutrition labels and nutrition labeling "shall contain" a uniform set of nutrition information required by subsection (q) of the statute. The required nutrients are: calories, calories from fat, fat, saturated fat, trans fat, cholesterol, sodium, carbohydrate, dietary fiber, sugars, protein, vitamins and minerals. 21 C.F.R. § 101.9(c). The regulation also specifies that "[n]o nutrients or food components other than those listed in this paragraph as either mandatory or voluntary may be included within the nutrition label." Id. Finally, section 101.9(d) sets out the formatting requirements for the presentation of the "[n]utrient information specified in paragraph (c) of this section." 21 C.F.R. § 101.9(d)(1). The regulations include the familiar Nutrition Fact Panel as a "sample label [that] illustrates the provisions of paragraph (d) of this section." 21 C.F.R. § 101.9(d)(12). The regulations also specify a format for "nutrition labeling information" for certain multiple items. Such information "may be presented in charts with horizontal or vertical columns or as a compilation of individual nutrition labels." 21 C.F.R. § 101.45(a)(3). Restaurants may present nutritional information in conformity with section 101.45. See 21 C.F.R. § 101.10. The Ordinance is different from these formatting

- 16 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 24 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

requirements. It requires statements of nutritional amount "next to" each menu item, in the case of menu boards, or "next to or beneath" each menu item, in the case of menus. Thus, the Ordinance fails to meet the first element of section 101.13(c). It does not mandate "information that is required or permitted by § 101.9...to be declared in nutrition labeling," because it does not meet the serving size, uniform content, or formatting requirements of section 101.9. 2. The Ordinance fails to meet the second element of section 101.13(c): the statement

must "appear as part of the nutrition label." The statute defines "labels" and "labeling." The statute defines a "label" as any "display of written, printed, or graphic matter upon the immediate container of any article." 21 U.S.C. § 321(k) (emphasis supplied). In contrast, it defines "labeling" more broadly--as "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." 21 U.S.C. § 321(m) (emphasis supplied). Menus are not "labels," even though they are "labeling." See Public Citizen, Inc. v. Shalala, 932 F. Supp. 13, 16-17 (D.D.C. 1996); Food Labeling; Nutrient Content Claims and Health Claims; Restaurant Foods, 61 Fed. Reg. 40320, 40322-23 (Aug. 2, 1996). The regulation chose the word "label" for its second element, and a menu is not a "label." Because a menu is not part of a "label," a statement on a menu cannot be part of a "nutrition label." (Of course, the result would be the same if the regulation used the phrase "appears as part of the nutrition label or the nutrition labeling," because the regulations repeatedly refer to "nutrition labeling" to encompass the gamut of requirements under section 101.9.) 3. The third element of the regulation provides that if the information is "declared

elsewhere on the label or in labeling, it is a nutrient content claim." 21 C.F.R. § 101.13(c) (element [3] quoted above). In other words, if the statement appears anywhere other than in the nutrition labels, it is a "claim." Recently, sellers of some packaged foods have begun listing the number of calories per serving on the front panel of their foods--particularly in "100 calorie" packages of snack foods. The FDA agrees that, under the NLEA and its implementing regulations, these statements--"100 calories"--are "claims." FDA Br. 16. It makes no sense that the isolated statement "100 calories" on the front of a package would be a "nutrient content claim" but the same

- 17 CASE NO. CV-08-03685 CW NOTICE OF MOTION AND MOTION FOR DECLARATORY RELIEF AND A PRELIMINARY INJUNCTION

Case 4:08-cv-03685-CW

Document 18

Filed 08/18/2008

Page 25 of 36

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

isolated statement "100 calories" on a menu in a restaurant would not be a claim. That