DC Court of Appeals Allows Nonprofit Consumer Associations in Hormel Fake Ads Case
Faegre Drinker Biddle & Reath LLP
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(Reuters) – The District of Columbia Court of Appeals has just pinned a sheriff’s badge on consumer associations eager to target companies engaging in deceptive advertising.
The decision of the Court of Appeal of September 2 in Animal Legal Defense Fund v. Hormel Foods Corp found that when the District of Columbia Council amended its Consumer Protection Act in 2012 to empower nonprofit consumer organizations to sue “on behalf of the interests of a consumer or a class of consumers.” , the Council intended to give the groups statutory status.
Under this precedent – the first interpretation on appeal of the 2012 amendment – nonprofit consumer organizations do not need to show separately that they would meet the requirements of Article III, which are otherwise the criteria for appearing in DC Superior Court.
Justices Joshua Deahl, Phyllis Thompson and Roy McLeese have ruled that the animal rights group had standing under this provision of DC consumer law for an injunction preventing Hormel from advertising for its deli meats as natural or entirely natural, thus overturning a decision of the Superior Court of 2019. decision which granted summary judgment to Hormel.
In a further victory for consumers, the appeals court ruled that the nonprofit’s bogus advertising claims were not preempted by federal meat labeling regulations. The Federal Meat Inspection Act and the Poultry Products Inspection Act govern how meat is labeled, Deahl wrote in the court opinion, but are silent on advertising beyond l labeling.
In combination, court rulings should empower DC nonprofits that include consumer protection in their mission. “The court recognized that states have an important role to play in protecting consumers,” said David Muraskin of Public Justice, who is counsel for the Animal Legal Defense Fund. “States have ways of using this that can go beyond Congress.”
The Animal Legal Defense Fund brief argued that the whole point of the DC Council’s relaxed standing requirements for consumer associations was to allow groups to act as private attorneys general to monitor the market. The group argues that Hormel’s “all-natural” claims are misleading because its pigs are subjected to inhumane treatment.
Hormel’s attorney, Aaron Van Oort of Faegre Drinker Biddle Reath, did not respond to an email request for comment. Hormel’s brief argued, among other things, that the animal rights group lost the right to claim representative status because it initially claimed to meet the Article III requirements for organizational status under the 1982 test of the Supreme Court of the United States in Havens Realty v. Coleman. Hormel, who maintains that its pigs are raised and slaughtered humanely, also argued that the group could not claim standing under the DC provision for consumer associations because its primary mission is animal rights.
DC Court of Appeals dismissed Hormel’s confiscation argument, finding that although the nonprofit originally advanced a theory of organizational position, his complaint alleged facts to support it of its position under the provision exempting groups from the requirements of Article III. The court also found no basis for Hormel’s claim that an animal rights group cannot be defined as a nonprofit consumer protection organization.
“The undisputed evidence establishes that for more than a decade [the group] has gone to great lengths to ensure that consumers have accurate information about where their meat comes from, including by undertaking investigations, initiating regulatory actions, and initiating or participating in other legal challenges, and widely publicized the results of its efforts to educate consumers, ”said the notice of appeal. “This evidence leaves no room for a real dispute that ALDF is organized and operates, in part, to promote the interests of consumers.”
The case has caught the attention of notable amicus from public interest groups, stressing the importance of issues of representativeness and preemption. Public citizen emphasized the distinction between labeling and advertising, arguing that Congress and federal agencies have developed laws and regulations with this distinction in mind. The National Consumer League argued that the DC Council has relaxed the quality requirements for nonprofit consumer associations to avoid the costly discovery required to prove organizational quality under the Havens Realty test. “A discovery or close examination of the kind that has occurred in this case is neither necessary nor appropriate when a nonprofit seeks to bring an action on behalf of the ‘general public’,” said the group.
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