From Miyoko’s Kitchen v. Ross, decided Aug. 21 by Judge Richard Seeborg (N.D. Cal.), but just recently posted on Westlaw:
Miyoko’s produces and sells a variety of plant-based, vegan products which are designed to resemble dairy products in appearance and taste. The company markets its foods using names that reference the products’ more common dairy analogues, such as a “vegan butter” and “vegan cheese.” These dairy references are always preceded by conspicuous terms such as “vegan” or “plant-based.” …
California law directs the Department to review food labelling for compliance with federal law. See Cal. Food & Agric. Code § 32912.5 (specifically directing as much “in connection with advertising and retail sales of milk, … dairy products, cheese, and products resembling milk products”). As pertains here, federal law forbids a retailer from selling “misbranded” food items (that is, items with “labelling [that] is false or misleading”), food items “offered for sale under the name of another food,” and food items that, though “purport[ing] to be or … represented as a food for which a definition and standard of identity” exists, do not “conform to such definition and standard ….” 21 U.S.C. § 343. For nearly a century, the standard of identity for butter has required a product “made exclusively from milk or cream, or both … and containing not less than 80 per centum by weight of milk fat.” 21 U.S.C. § 321a.
On December 9, 2019, Miyoko’s received written notice from the Department’s Milk and Dairy Foods Safety Branch indicating the label for its “Cultured Vegan Plant Butter” failed to comply with this regulatory framework. Noting that “the product is not butter” and may not imply it is “a dairy food without [traditional dairy] characteristics,” the Letter instructed Miyoko’s to remove five terms from the product’s label: “butter,” “lactose free,” “hormone free,” “cruelty free,” and “revolutionizing dairy with plants.” The Letter also objected to the display of the animal sanctuary imagery and the phrase “100% dairy and cruelty free” on Miyoko’s website, stating “[d]airy images or associating the product with [agricultural] activity cannot be used on the advertising of products which resemble milk products.” …
The court held that Miyoko’s use of “butter” (prefixed with “vegan” or “plant-based”), “lactose free,” and “cruelty free” were likely truthful and nonmisleading and therefore likely protected by the First Amendment. (The question had to do with likelihood, because the court was deciding whether to grant a preliminary injunction; the court’s analysis, though, seemed pretty confident on these points.)
But the court held that “hormone free” is literally false:
The parties do not seriously disagree about the truthfulness of Miyoko’s “hormone free” claim: because plants contain naturally-occurring hormones, and because Miyoko’s vegan butter is made of plants, it necessarily contains hormones as well….
Miyoko’s struggles to escape this result by reference to its prototypical consumer, who allegedly “understands that the phrase … in context with other phrases [on the label] … mean[s] that the company’s vegan butter does not contain the artificial hormones that are sometimes added to animal-based dairy products.” While there is something to be said for the connection a brand forges with its customers, this reasoning takes that concept a step too far.
[The Court’s First Amendment caselaw] insists, at the threshold, that commercial speech be true, and provides no exception for falsities made true by the target consumer’s supposed contextual awareness. Indeed, as the State persuasively points out, no court has ever repudiated a regulator’s authority to demand that products claiming to lack hormones actually lack hormones. Against this backdrop, Miyoko’s insistence that it would be “illogical for any consumer to believe” that a product labelled “hormone free” does not contain hormones falls decidedly flat…. Because its plant-based butter is not “hormone free,” there is no merit to Miyoko’s request for license to label it with that term.
And the court held likewise as to “revolutionizing dairy with plants”
[T]o “revolutionize” an industry requires “chang[ing] it fundamentally or completely” [citing a dictionary]. “Revolutionizing dairy” thus denotes direct interaction with animal-based milk products in a way that leaves them “fundamentally” different than they were before. Put simply, this is not at the core of what Miyoko’s—a maker of dairy replacements—does or seeks to do. Just like the statement that a vegan clothier’s motorcycle jackets “revolutionize leather with cotton,” or that a maker of non-alcoholic beverages “revolutionizes whiskey with seltzer,” this claim of Miyoko’s is plainly misleading. The State should not be enjoined from responding to its presence in the marketplace with appropriate regulatory action.
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