Saturday, June 07, 2008

A turn for the worse on menu labeling

One of the industry’s key defenses against menu labeling has been rendered useless by a recent court filing that could also break up the trade’s Hail Mary play for softening the impact of nutrition-disclosure mandates. The actions, little-noticed outside of the regulatory and legal worlds, came not from the restaurant business’ usual adversaries on diet-related matters, but from the hoped-for ally known as the U.S. Food & Drug Administration.

The development was the latest in the prolonged legal effort by the New York State Restaurant Association to overturn a New York City requirement that local chain units post calorie counts on menu boards, regular bills of fare and drink menus. The association filed a lawsuit in federal court that asserts the city does not have the authority to regulate nutrition disclosure, since that power resides exclusively with the FDA.

Not so, the FDA itself said in a friend-of-the-court brief that was filed on May 29. The agency, which has been expressly granted the right to specify and police what nutritional information is printed on grocery-store items, told the court that it doesn’t have a hammerlock on menu disclosure. Only if a restaurant makes a health-related claim—such as pronouncing an item life-prolonging or cholesterol-reducing—do FDA rules pre-empt state or local regulations, the agency said.

The take-away for state and local jurisdictions that want to require restaurants on their turf to divulge nutrition information for all menu items: Knock yourself out.

The filing by the FDA, which had been requested by the 2nd U.S. Circuit Court of Appeals, in effect scuttles the pre-emption challenge that a number of restaurant groups have either eyed or actually tried in their efforts to fend off labeling mandates. But the damage to the industry’s defense strategies could go farther than that.

As I’ve mentioned in a column, there’s a growing sensibility within the restaurant industry that menu-labeling requirements are going to be a new reality, no matter how unpleasant the trade might find them. It’s a tide that the business may simply not be able to hold back. Some broad-minded thinkers are proposing behind closed doors that the industry temper the effects by suggesting the federal government take the lead on menu disclosure.

That way, the proponents argue, chains would have to meet only one set of disclosure standards from coast to coast, instead of a hodgepodge of obligations that could vary from town to town. Chains that operate in both Seattle and New York, for instance, will be required to provide one set of info on the West Coast, and another type on the East. Branches in the two cities will almost certainly end up with different types of menus and menu boards, which may be still different from the ones required for Santa Clara or San Francisco Counties in California.

But now the FDA has said that Congress didn’t want it to regulate restaurants, so states, counties and municipalities are the ones to fill the void. I’m certainly no lobbyist, but it seems that the industry would have to push legislation through Congress that would call for menu regulation by the agency. It could be one of the smartest things the industry has ever done. But a firefight will almost certainly erupt as rank-and-file operators balk at the notion of asking for government regulation. In the minds of those who are still thinking in yesterday’s terms, it’d be like pushing for a tax increase.

And then there’s the wild card that was dealt to the industry just this past week. A group of consumers has sued Applebee’s and Brinker International for allegedly misstating the nutritional information they voluntarily post on their menus. The class action suits allege that Applebee’s understated the fat content of its Weight Watchers-branded selections, and that Brinker similarly bent the truth the same on Chili’s Guiltless Grill section.

Those brands voluntarily disclosed information and ended up getting sued. When chain after chain after chain is posting analytical data to meet disclosure requirements, won’t the industry become the barrel where litigation-minded lawyers and consumers can draw a bead on the next fat tuna they’d like to fillet in court?

If the industry does proceed with its efforts to legislate federal labeling regulation, it would be well served to also incorporate some defenses against bounty-hunting of that nature.

1 comment:

  1. Right on the mark and the Congressional effort can't come too soon. Although those that have taken the time to study the NLEA, know it is clear that Congress left the door open to local and state regulation of restaurant menu labeling...just like the NRA lobbied them to ironic!