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The following is a guest post by Sean McBride, founder of DSM Strategic Communications, former VP of Communications for the Grocery Manufacturers Association (now the Consumer Brands Association), and former VP of Communications for the U.S. Chamber of Commerce Legal Reform Institute.
The U.S. Supreme Court's June 28 ruling in a regulatory dispute between fishermen and the National Marine Fisheries Service will limit the regulatory power of federal agencies by ending the 1984 Chevron Doctrine.
Legal precedent has tipped the scales of justice in favor of agencies in court cases where the government has abused its power to make rules.
Chevron is widely seen as a key factor in the federal government's growing scope and power in recent decades, but what does this decision mean for food policy, particularly for food manufacturers?
The Biden administration is pursuing an ambitious food regulatory agenda. Based on the outcomes of the 2023 White House Food Summit, FDA is developing rules and regulations on food safety, sodium, front-of-package nutrition labeling, new nutrient health claim definitions, and food chemicals.
The FDA food initiative that may be most vulnerable to legal challenge is the voluntary sodium reduction guidelines for food companies. It may seem counterintuitive to think that voluntary means it is vulnerable, but the opposite may be true.
According to FDA After Chevron, the agency “… often treats informal guidance documents, letter decisions, and policy statements (which are not subject to notice and comment) as equally binding. Thus, FDA tends to exercise much more authority in practice than the letter of the statute would imply.” The authors also note that “[Supreme Court]Justice (Neil) Gorsuch's remarks during oral argument appeared to criticize FDA's routine reliance on informal guidance…”
That means FDA and sodium, a voluntary guidance agency that is intended to change industry behavior, may be the kind of crap SCOTUS should dump on the lower courts.
First, most regulatory agencies treat FDA guidance as if it were gospel. If a company does not at least directly follow FDA’s view on a topic (in this case, sodium reduction), they cannot afford to look badly at an agency that has so much power over their operations and reputation.
Second, many experts believe that the short-term sodium reduction goals by food category announced by the FDA and the longer-term guidance the agency is currently working on are unachievable and unlikely to have a significant impact on public health.
Finally, FDA has not conducted an adequate cost-benefit analysis to demonstrate the costs to industry and consumers and the public benefits of following the sodium guidelines in terms of reduced sodium intake, high blood pressure, and stroke.
The Achilles heel of FDA is its inability or unwillingness to conduct an authoritative cost-benefit analysis of its nutrition policies, which Congress takes a negative view of when agency policies are proposed without such an analysis.
In addition to failing to assess costs, FDA also failed to demonstrate that the government's nutrition policies since the 1990 Nutrition Labeling and Education Act have significantly reduced obesity and related diseases or improved public health.
In other words, FDA's front-of-package nutrition labeling efforts may not only be vulnerable to mandatory speech/Section 1 claims, but may also be vulnerable to Chevron-based claims of abuse of agency authority.
Another area of food policy to watch is the Food Safety Modernization Act (FSMA). FDA’s implementation of the 2011 law has been uneven and confusing at times. The law, which requires food companies to “know their supply chain” and make changes and plans to prevent foodborne outbreaks, was well-intentioned and has been embraced by the industry.
But FDA went too far too quickly in some FSMA channels, expanding its reach and ignoring practical considerations and legal data points in the process.
A cascade of food safety guidelines, rules, and regulations have been issued by the agency and placed in literally every corner of every farm, every processing facility, and every retail grocery store. Courts may be asked to decide whether some FSMA policies addressing prevention or traceability further the agency’s authority with little or no chance of protecting consumer health.
Of course, all legal challenges start with a plaintiff. Even if a Chevron-based legal challenge to FDA policy were viable, a motivated food company, trade association, or organization with legal standing would have to file a lawsuit. This is a tricky business these days, as consumer-sensitive brands are reluctant to take legal or advocacy actions that might be viewed negatively by some consumers.
While Chevron could open up unexpected avenues for challenging the FDA or other federal agencies on the legal front, most food industry experts are instead watching the 2024 election cycle closely as a more important step that will impact the food policy landscape and the FDA regulatory agenda in the coming years.
There are significant differences in food policy and market philosophy between the current and previous presidential administrations, so regulators don’t have to guess what will happen next under Biden or Trump. But if they want relief from regulators, there’s always the courts.
