Court rejects argument against COOL

USDA followed instructions of Congress, judge says

By MATEUSZ PERKOWSKI

Capital Press

A feedlot company in Eastern Washington has lost its legal challenge to USDA's country-of-origin labeling regulations for beef.

Easterday Ranches, a 30,000-head feedlot near Pasco, Wash., filed suit against the agency in 2008, alleging that new labeling regulations for beef conflict with existing rules developed by the U.S. Treasury Department.

The feedlot company claimed labeling requirements would raise its record-keeping and operational costs.

The rules would also "deter slaughter facilities from purchasing Canadian-born cattle raised at plaintiff's feedlots, or will, at a minimum, reduce the price that slaughter facilities will be willing to pay for such cattle," according to the complaint.

Easterday Ranches initially asked a federal judge to postpone and overturn the USDA's labeling rules, but that motion was rejected.

The company then argued that USDA should create an exception to COOL that would allow cattle imported from Canada and Mexico to be labeled as a product of the U.S. if they were slaughtered in the U.S.

Under Treasury Department regulations implementing the North American Free Trade Agreement, beef is considered a U.S. product if it undergoes a "substantial transformation" -- in this case, slaughter -- within the country.

Easterday Ranches argued that COOL regulations impermissibly repealed the Treasury Department's rules.

U.S. District Judge Robert Whaley rejected that argument on Feb. 5, ruling that the Treasury Department rules relate to tariffs and were not in conflict with retail-oriented COOL regulations.

In developing the labeling requirements, USDA was following the instructions of Congress contained in the 2008 Farm Bill, Whaley wrote in his ruling. Creating an exception for beef in COOL regulations would have violated federal administrative law, he said.

"The USDA's action implementing regulations mirroring the language of the Farm Bill cannot therefore be found to be arbitrary and capricious," according to Whaley.