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From Health Law Daily, March 21, 2017

No more tears for creamery’s skim milk label

By Anthony H. Nguyen, J.D.

The Eleventh Circuit Court of Appeals vacated a lower court’s decision denying a dairy creamery’s contention that Florida had violated its First Amendment rights when the state prevented it from labeling and selling unfortified skim milk as "skim milk." While Florida was permitted to propose a definition for a given term, it did not follow that once it had done so, any use of the term inconsistent with its preferred definition is inherently misleading. The creamery’s label was not unlawful activity and not inherently misleading and it merited First Amendment protection (Ocheesee Creamery, LLC v. Putnam, March 20, 2017, Black, S.).

Background. Ocheesee Creamery, LLC, is a small dairy creamery located on its owners’ farm in rural Florida. The creamery sells all-natural dairy items, including whole milk, cream, and related items such as ice cream. It also sells all-natural skim milk, which is a byproduct of its cream production. Consistent with industry standards, the creamery produces cream causing it to rise to the top of the milk and then skimming it off. The leftover product is skim milk. The skimming process depletes most of the available vitamin A in milk; some producers will add vitamin A, but the creamery did not because it sells only all-natural, additive-free products.

Florida law prohibits the sale of milk and milk products that are not Grade "A," which requires that vitamin A lost in the skimming process must be replaced. The state issued two stop sale orders to the creamery about its skim milk products. The creamery was presented with two alternatives: (1) add vitamin A or (2) stop selling the leftover product. It chose the latter and began discarding the skim milk created after cream production. Concurrently, the creamery applied for a permit to sell the unenhanced milk under Florida’s imitation milk statute.

Initially, the state told the creamery it could sell its product without adding vitamin A so long as it bore the label "imitation milk product," but the creamery objected to this description. During negotiations over the labeling, the state proposed that the creamery label its skim milk as "Non-Grade ‘A’ Milk Product, Natural Milk Vitamins Removed." The creamery offered five alternatives that all included "skim milk" on the label. The state declined and the creamery filed suit in the lower court contending the state’s refusal to allow it to call its product "skim milk" amounted to censorship in violation of the First Amendment.

First Amendment and skim milk. Challenges to restrictions on commercial speech are evaluated with analysis consisting of a threshold question followed by a three prong test established by the Supreme Court. The threshold question asks "whether the expression is protected by the First Amendment" at all because some commercial speech remains unprotected. In the three prong test, the court must determine whether (1) the government’s interest is substantial; (2) the regulation directly advances the government’s interest; and (3) it is not more extensive than necessary to achieve that interest.

Florida asserted its regulation of speech as to the label was permitted because the creamery’s skim milk was simply prohibited for sale in the state. The appellate court noted that Florida could not fully escape the threshold question by characterizing its restriction as a regulation of speech relating to unlawful conduct because the creamery’s conduct is not unlawful, only its speech is. Thus, the appellate court focused on whether in using the term "skim milk" the creamery’s speech is inherently misleading or merely potentially misleading.

The district court held the creamery’s use of the term "skim milk" was inherently misleading because it conflicted with Florida’s definition of "skim milk," according to which the product would include replenished vitamin A. The appellate court noted, however, while true that a state was permitted to propose a definition for a given term, it did not follow that once a state had done so, any use of the term inconsistent with the state’s preferred definition is inherently misleading. The appellate court further added that all a state would need to do in order to regulate speech would be to redefine the pertinent language in accordance with its regulatory goals. Then, all usage in conflict with the regulatory agenda would be inherently misleading and fail the Supreme Court’s threshold test.

The appellate court pointed to the district court’s decision that conceded it "is undoubtedly true that a typical consumer would think ‘skim milk’ is simply milk from which the cream has been skimmed." Nevertheless, the district court maintained, Florida produced a study in which consumers indicated they would "expect skim milk to include the same vitamin content as whole milk." The appellate court disagreed, finding that consumers’ beliefs about skim milk’s attributes did not make the creamery’s labeling misleading, as unfamiliarity was not synonymous with misinformation. Florida’s study did not provide evidence that consumers expected anything other than skim milk when they read those words on the creamery’s bottles.

The appellate court held that the creamery’s label was not unlawful activity and not inherently misleading. As such, its commercial speech merited First Amendment protection. Under the three prong analysis, Florida’s interest in combating deception and in establishing nutritional standards for milk was valid. However, Florida failed to show its remedy for skim milk labeling was not more extensive than is necessary to serve that interest. The appellate court vacated the district court’s judgment.

The case is No. 16-12049.

Attorneys: Justin Pearson (Institute for Justice) for Ocheesee Creamery LLC. Ashley E. Davis, Office of the Attorney General, for Adam H. Putnam, Florida Commissioner of Agriculture.

Companies: Ocheesee Creamery LLC

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