In a complaint submitted to the US District Court for the Southern District of New York on July 14, the trade groups argue their members “face the risk of irreparable harm” if the city goes forward with its plan to begin enforcing Aug. 21 a requirement that chain restaurants with 15 locations or more nationwide, including grocery and convenience stores, must label calories and key nutritional facts on prepared food.
This harm includes the risk of fines up to $600, as well as the cost of “business disruption and other harms,” argue the trade groups, including the Food Marketing Institute, the National Association of Convenience Stores, New York Association of Convenience Stores and the Restaurant Law Center.
They also argue their members “face enormous and ultimately unrecoverable costs to comply with a regulatory regime now that is likely to change by May 2018,” which is when the Federal government has said it will begin enforcing its version of the labeling rule.
FDA repeatedly has delayed menu labeling requirements, which were required nationally for the first time under the Affordable Care Act, in response to extensive comments from industry citing the rule’s complexity, significant burden and lingering questions.
For example, when FDA delayed the rule, it acknowledged there are unanswered questions about how to determine calorie counts for foods of various sizes, such as fried chicken pieces, how to display calorie disclosure signage for self-service foods and how to distinguish menus from advertisements, according to the complaint.
Despite FDA’s decision, New York City officials were unwilling to wait for the federal rule to go into effect and announced May 18 that inspectors from its Departments of Health and Consumer Affairs would begin enforcing on May 22 the menu labeling requirements by first issuing educational warnings and then on Aug. 21 fines for non-compliance.
Lyle Beckwith, senior vice president of government for NACS says in a statement that New York City’s decision to “jump the gun and start imposing fines when FDA hasn’t even figured out how disclosures should be made … holds stores to standards that no one can meet and undermines the point of having a federal law in the first place.”
Grounds for preemption
Angelo Amador, executive director for the Restaurant Law Center, agrees and adds in a statement that the federal requirement is “the law of the land” and provides preemptive protections for industry players in New York City.
The complaint fleshes out this idea by arguing that the Nutrition Labeling and Education Act, passed in 1990, bars state and local governments from adopting any requirement for nutritional labeling of food that is not identical to the federal requirement.
The document acknowledges there was a carve-out for the local regulation of food served in restaurants or other establishments for immediate consumption, but that when the ACA mandated nutrition labeling it overrode the carve out and triggered preemption.
As such, the complaint asks not only for the court to halt enforcement of the New York City regulation, but to do so until the federal labeling rule goes into effect and to declare the federal law preemptive of the city regulation.