The legal dispute began late last year after Miyoko's was told by the California Dept of Food & Agriculture to drop the terms 'butter,' ‘lactose-free,’ hormone-free’ and ‘cruelty-free,’ from its plant-based 'butter' (which is made from coconut oil, sunflower oil and cashew nuts) because "it is not a dairy product."
Miyoko’s - which said it was given no choice but to develop custom packaging for California (“creating a logistical nightmare”), change marketing and packaging materials nationwide at huge expense, or risk prosecution - filed a lawsuit in February 2020 in a bid to prevent the State from enforcing its demands, which it claimed violated its First Amendment rights.
'The state’s showing of broad marketplace confusion around plant-based dairy alternatives is empirically underwhelming'
In an order filed in the Northern District of California on Friday (Aug 21), US district judge Richard Seeborg granted Miyoko’s motion for a preliminary injunction to prevent the state enforcing its claims as regards the terms ‘butter,’ ‘lactose-free,’ ‘cruelty-free.’
Its motion was however denied as regards the terms ‘hormone-free,’ and ‘revolutionizing dairy with plants,’ on the grounds that ‘hormone-free’ was not technically accurate as plants contain naturally-occurring hormones, while the 'revolutionizing...' phrase was “plainly misleading.”].
As for the core claims around vegan 'butter,' Judge Seeborg explained: “The state’s showing of broad marketplace confusion around plant-based dairy alternatives is empirically underwhelming.
"In this early phase of the litigation, it therefore appears Miyoko’s decision to label its product as ‘butter’ is entitled to First Amendment protection.”
'Nowhere... does the state present testimony from a shopper tricked by Miyoko’s vegan butter'
While the standard of identify for butter stipulates that butter must contain at least 80% milkfat, argued Seeborg, the question at issue in this case is whether Miyoko’s use of the word ‘butter’ in close proximity to terms such as ‘vegan,’ ‘made from plants,’ and ‘cashew & coconut oil spread,’ amounts to misleading commercial speech.
Ultimately, he said, the evidence presented by the state “does not disturb the weight of evidence tending to show that Miyoko’s use of that word is likely not misleading… Nowhere, for instance, does the state present testimony from a shopper tricked by Miyoko’s vegan butter, or otherwise make the case for why Miyoko’s substitute spread is uniquely threatening to the public weal."
He also noted that consumer class actions taking issue with terms such as ‘almondmilk’ and ‘soymilk’ have not made much headway, with judges arguing that the federal standard of identity for ‘milk’ (which limits it to lacteal secretions from cows) does not preclude a company from using terms that feature the word ‘milk’ (eg. 'soy milk') as long as they use qualifiers such as ‘plant-based’ or ‘dairy-free’ and consumers are not confused.
He also noted that "an Arkansas district court recently rejected that state’s framing of commercial speech as misleading where the label of plant-based 'meat' products included ample terminology to indicate [their] vegan or vegetarian nature."
'This is a huge victory'
Founder and CEO Miyoko Schinner told FoodNavigator-USA: “This is a huge victory where it is meaningful for us.”
ALDF: 'This decision has significant industry-wide implications'
Tony Eliseuson, litigation program director at the Animal Legal Defense Fund, which is backing Miyoko's in the case, said: “To have a preliminary injunction granted means the judge has determined that it there is a substantial likelihood that Miyoko’s case will prevail on the merits.
"This decision has significant industry-wide implications, particularly for smaller companies that might not have the legal expertise or resources of Miyoko’s. Companies that make (and label) similar products now know any attempt to enforce the FDA regulations in this manner is likely unlawful under the First Amendment based on this preliminary injunction order. These companies may not simply acquiesce to the regulatory agency like they might have in the past.”
The California Department of Food and Agriculture did not immediately respond to requests for comment on the case.
*The Case is Miyoko’s Kitchen Inc vs Karen Ross (Secretary of the California Department of Food and Agriculture) and Stephen Beam (Branch Chief of the Milk and Dairy Food Safety Branch of the California Department of Food and Agriculture). 3:20-cv-00893 filed 02/06/20 in In the US District Court for the Northern District Of California.
Margarine by any other name?
According to FDA standards of identity, butter must contain 80% milkfat, while margarine must contain 80% fat but it doesn’t have to come from milkfat. Vegetable oil ‘spreads,’ meanwhile, typically contain up to 40% water.
While some commentators say brands such as Miyoko’s, Califia Farms and Kite Hill are using the term plant-based ‘butter’ in order to present what is basically margarine as something new and exciting, Miyoko’s argued that the State of California was violating its rights to free speech by “prohibiting the company from making truthful statements about the identity, quality, and characteristics of vegan and plant-based products.”
The brands pictured above have also argued that the inclusion of premium ingredients such as coconuts, cashews, almondmilk and tigernuts in these next-gen products differentiates them from traditional margarine brands that use cheaper vegetable oils such as soy, palm, and canola.
In his ruling on August 21, Judge Richard Seeborg acknowledged that the standard of identify for butter may stipulate 80% milkfat, but said the question at issue in this case is whether Miyoko’s use of the word ‘butter’ in close proximity to terms such as ‘vegan,’ ‘made from plants,’ and ‘cashew & coconut oil spread,’ amounts to misleading commercial speech. And the State, he argued, had not made that case.