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D.C. appeals court empowers consumer nonprofits in Hormel false ad case

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The District of Columbia Court of Appeals in Washington, D.C., U.S. REUTERS/Andrew Kelly

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(Reuters) - The District of Columbia Court of Appeals just pinned a sheriff’s badge on consumer nonprofits itching to go after corporations engaged in deceptive advertising.

The appellate court’s Sept. 2 ruling in Animal Legal Defense Fund v. Hormel Foods Corp concluded that when the Council of the District of Columbia amended its consumer protection law in 2012 to empower consumer nonprofits to sue “on behalf of the interests of a consumer or a class of consumers,” the council intended to give the groups statutory standing.

Under this precedent -- the first appellate interpretation of the 2012 amendment -- consumer nonprofits need not separately show that they would meet Article III standing requirements, which are otherwise the test for standing in D.C. Superior Court.

Judges Joshua Deahl, Phyllis Thompson and Roy McLeese held that the animal-rights group had standing under that provision of D.C.’s consumer law to sue for an injunction to block Hormel from advertising its deli meats as natural or all-natural, reversing a 2019 Superior Court decision that granted summary judgment to Hormel.

In an additional win for consumers, the appeals court ruled that the nonprofit’s false advertising claims were not pre-empted by federal regulations on meat labeling. The Federal Meat Inspection Act and the Poultry Products Inspection Act govern how meat is labeled, Deahl wrote in the court’s opinion, but are silent on advertising beyond labeling.

In combination, the court’s holdings should empower D.C. nonprofits that include consumer protection in their mission. “The court recognized that states have an important role in protecting consumers,” said David Muraskin of Public Justice, who is counsel for the Animal Legal Defense Fund. “States have ways to use that that may exceed Congress.”

The Animal Legal Defense Fund’s brief argued that the whole point of the D.C. Council’s relaxed standing requirements for consumer nonprofits was to allow the groups to act as private attorneys-general to police the marketplace. The group contends that Hormel’s “all-natural” claims are deceptive because its pigs are subjected to inhumane treatment.

Hormel counsel 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 had forfeited the right to assert representative standing because it initially claimed to meet Article III requirements for organizational standing under the U.S. Supreme Court’s 1982 test in Havens Realty v. Coleman. Hormel, which contends that its pigs are humanely raised and slaughtered, also argued that the group could not claim standing under the D.C. provision for consumer nonprofits because its primary mission is animal rights.

The D.C. appeals court rejected Hormel’s forfeiture argument, concluding that even if the nonprofit originally posited an organizational standing theory, its complaint alleged facts to support its standing under the provision exempting groups from Article III requirements. The court also found no merit in Hormel’s assertion that an animal rights group can’t be defined as a consumer protection nonprofit.

“The undisputed evidence establishes that for more than a decade [the group] has undertaken substantial efforts to ensure consumers have accurate information about how their meat is sourced—including by undertaking investigations, filing regulatory actions, and bringing or participating in other legal challenges—and it has broadly publicized the results of its efforts in order to educate consumers,” the appellate opinion said. “That evidence leaves no room for any genuine dispute about the fact that ALDF is organized and operating, in part, for the purpose of promoting consumer interests.”

The case attracted notable amicus attention from public interest groups, underscoring the significance of both the standing and pre-emption issues. Public Citizen emphasized the distinction between labeling and advertising, arguing that Congress and federal agencies have crafted laws and regulations with that distinction in mind. The National Consumers League argued that the D.C. Council relaxed standing requirements for consumer nonprofits to avert the costly discovery required to prove organizational standing under the Havens Realty test. “Extensive discovery or scrutiny of the kind that occurred in this case is neither necessary nor appropriate where a nonprofit organization seeks to bring suit on behalf of the ‘general public,’” the group said.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin. Reach her at alison.frankel@thomsonreuters.com

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