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2nd Circuit Upholds NYC Law Requiring Restaurant Chains to Display Calorie Counts
Federal appeals court in New York is thought to be the highest court yet to hear a challenge to a municipality's calorie-posting rules
New York Law Journal
February 18, 2009
A New York City law requiring McDonald's, KFC and other chain restaurants to post calorie information on menus and menu boards is not pre-empted by federal law on disclosure of nutritional information, an appeals court ruled Tuesday.
The 2nd U.S. Circuit Court of Appeals also said Tuesday that requiring, for example, Chili's to tell customers that its smoked turkey sandwich contains 930 calories does not violate the First Amendment.
The court's principal holding was that the labyrinthian federal scheme for the labeling and branding of food did not pre-empt New York City Health Code §81.50, which was passed to combat the obesity epidemic and the health problems obesity creates.
"In requiring chain restaurants to post calorie information on their menus, New York City stepped into a sphere that Congress intentionally left often to state and local governments," the court said in New York State Restaurant Assoc. v. New York City Board of Health, 08-1892-cv.
Second Circuit Judges Rosemary Pooler and Sonia Sotomayor and, sitting by designation, Judge Jane Restani, chief judge of the U.S. Court of International Trade, upheld an April 2008 decision by Southern District Judge Richard Holwell.
New York City broke new ground nationally in 2006 when it changed its regulations to require that any restaurant that voluntarily publishes calorie information do so on menus and menu boards.
The New York State Restaurant Association, a group of 7,000 restaurants, challenged the regulation as a violation of the First Amendment. But it also argued that the regulation was expressly pre-empted by the federal Nutritional Labeling and Education Act of 1990, (NLEA), which was passed to "clarify and strengthen" the Food and Drug Administration's authority to require nutritional labeling on food and police claims about nutritional quality.
Judge Holwell ruled in September 2007 that the regulation was pre-empted, and declined to rule on the First Amendment issue.
New York City responded with a new measure in January 2008. This time, the city required all chain restaurants with 15 or more establishments nationally to show calorie content clearly on menus and menu boards.
Holwell then rejected the pre-emption argument and the First Amendment claim. Although the association fought for a stay while its 2nd Circuit appeal was pending, the new rules went into full effect in July.
Writing for the circuit, Pooler said the pre-emption scheme of the Nutritional Labeling and Education Act is complex, but "this scheme is simple when it comes to restaurant food -- the NLEA does not regulate nutrition information labeling on restaurant food, and states and localities are free to adopt their own rules."
And while the act does generally regulate nutrition content claims on food, Pooler said there was still room left for the city to require that calorie counts be prominently displayed, in part because the nutrition act's regime largely covers packaged food, not restaurant food.
The belief that New York City's regulation was not pre-empted by federal law was supported by the federal government, as the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration weighed in as amici. The FDA did so at the request of the circuit.
COMMERCIAL SPEECH
The restaurant association's First Amendment challenge fared no better.
Judge Pooler said the city's Regulation 81.50 involved commercial speech. Here, the restaurant association argued that the regulation should be subjected to "heightened scrutiny" and not Judge Holwell's standard, whereby he examined the regulation for "rationality."
"However," Pooler said, "the district court's conclusion was compelled by this Circuit's case law, which rested on our interpretation of Supreme Court precedent."
Under rational basis review, Pooler said New York had "plainly demonstrated a reasonable relationship" between the purpose of the regulation -- combating obesity -- and "the means employed to achieve that purpose."
Fifty-four percent of adults and 43 percent of children in the city are either overweight or obese, she said, and "obesity is a contributing factor for heart disease, diabetes, stroke and cancer, which caused 70 percent of deaths in New York City in 2005."
"Second," she said "the obesity epidemic is mainly due to excess calorie consumption, often from meals eaten away from home."
Pooler said it has been shown that chain restaurants "serve food that is associated with excessive calorie consumption and weight gain," consumers have distorted perceptions of how many calories are in certain foods and the federal law's nutrition fact panel found that voluntary activities by restaurants were "woefully inadequate" in informing most customers of about calorie content.
Senior Counsel Fay Ng of the Law Department's Appeals Division and Senior Counsel Mark Muschenheim of the Administrative Law Division led the city's defense of the regulation.
"The court's decision means that this important public health initiative will continue here in New York City, as well as encourage other municipalities to adopt similar disclosure requirements," Muschenheim said in a statement.
In a phone interview, he added that while other municipalities have followed New York's lead in requiring calorie posting, the 2nd Circuit is the highest court yet to hear a challenge in the issue.
Health Commissioner Thomas R. Frieden said that most chain restaurants have complied with the regulation.
Rick Sampson, president of the New York State Restaurant Association, said the group is considering an appeal.
Sampson said business has been down at most restaurants since the calorie regulation took effect, but he said much of the decline likely stems from the national recession.
Kent Yalowitz, Peter Zimroth, Nancy Milburn, Brandon Cowart and Amalia Jorns of Arnold & Porter represented the restaurant association.
