(Adds reaction, more from ruling)
By Lawrence Hurley
WASHINGTON, July 29 (Reuters) - A U.S. appeals court on Tuesday rejected a food industry challenge to a federal rule concerning labeling requirements for meat, marking a potential setback for other businesses fighting federal regulations on free-speech grounds.
For the second time, the U.S. Court of Appeals for the District of Columbia Circuit said the 2013 regulation could be enforced. It requires labels on muscle cuts of meat to list the country of origin and other details.
The impact of the ruling may not be limited to meat labeling. The rationale embraced by the court could apply in other cases in which business interests object to regulations on free speech grounds.
“It will certainly give the government a wider range of arguments they can use to defend various compelled disclosure requirements,” said Jonathan Adler, a law professor at Case Western Reserve University School of Law.
For instance, one case that could be affected is a challenge to a U.S. Securities and Exchange Commission rule that forces public companies to disclose if their products contain “conflict minerals” from a war-torn part of Africa. In April, the appeals court threw out part of that rule, but the SEC has asked for a rehearing, citing the meat labeling case.
The American Meat Institute and related trade associations had sought a preliminary injunction to prevent the labeling rule from taking effect, saying it violated companies’ free speech rights.
”We have maintained all along that the country of origin rule harms livestock producers and the industry and affords little benefit to consumers,“ the meat group’s interim president James H. Hodges said in a statement.” A spokesman said the group has not yet decided whether to appeal to the U.S. Supreme Court.
A U.S. Justice Department spokeswoman declined to comment.
A three-judge panel of the court originally upheld the rule in a March opinion, but the full court of 11 judges decided to rehear the case. The full court agreed with the panel on Tuesday, but the court was split, with three judges dissenting.
The appeals court judges reheard the meat labeling case to interpret a 1985 Supreme Court precedent on what is known as “compelled commercial speech.” The question before the judges was whether the government can only require disclosures when its aim is to prevent deception or whether it has broader authority that would cover other types of speech.
The appeals court embraced the latter interpretation, which would potentially give the government more freedom to compel speech in different contexts.
The labeling regulation requires retailers to list not just the country of origin of the meat, but also information on when and where animals were born, raised and slaughtered. It strengthened a previous 2009 regulation.
The case decided on Tuesday is American Meat Institute v. U.S. Department of Agriculture, U.S. Court of Appeals for the District of Columbia, No. 13-5281. (Reporting by Lawrence Hurley; Editing by Jeffrey Benkoe, Lisa Von Ahn and Tom Brown)