Last year, Arkansas enacted a “Truth in Labeling” law that placed restrictions on companies’ ability to label edible products with the term “meat” and other meat-related words.[1]  Arkansas Act 501 took effect July 24, 2019.[2]

Turtle Island Foods SPC d/b/a/ Tofurky Company (“Tofurky”) is an Oregon-headquartered company in the business of selling plant-based meats made from soy, tempeh, wheat, jackfruit, textured vegetable protein, or other vegan ingredients.  In its advertising, Tofurky uses meat-related terms such as “chorizo” or “hot dog,” alongside words such as “all vegan,” “plant based,” or “veggie.”  The Act was a source of concern for Tofurky, especially the more sweeping prohibitions that would, for example, prohibit it from “[u]tilizing a term that is the same as or similar to a term that has been used or defined historically in reference to a specific agricultural product” on items being distributed in Arkansas.

Two days before Act 501 took effect, Tofurky brought suit seeking declaratory and injunctive relief, challenging the constitutionality of six provisions of Act 501.  It asserted that those provisions represented a “restriction on commercial speech that prevents companies from sharing truthful and non-misleading information about their products, does nothing to protect the public from potentially misleading information, and creates consumer confusion where none existed before in order to impede competition.”  Turtle Island Foods SPC v. Soman , 4:19-CV-00514-KGB, 2019 WL 7546141, at *1 (E.D. Ark. Dec. 11, 2019) (“Turtle Island”).  Shortly thereafter Tofurky brought a separate motion for preliminary injunction.  The defendant, the Director of the Arkansans Bureau of Standards (or “the State”), responded with what were ultimately unsuccessful arguments grounded in Tofurky’s alleged lack of standing; the federal district court’s obligation to abstain from deciding the matter; as well as arguments directed at the merits of Tofurky’s application for preliminary injunctive relief.  The district court granted Tofurky’s request; here is the meat of that decision.

Standing.  The Court was unpersuaded by the State’s arguments that Tofurky lacked standing.  It noted that in a pre-enforcement suit, a plaintiff has standing “‘where [it] alleges an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder.’”  Susan B. Anthony List v. Driehaus, 573 U.S. 149, 159 (2014) (internal quotes and citation omitted) (emphasis added).  Thus, the State’s “multi-pronged” argument—that Tofurky lacked standing because Tofurky has “not been assessed a civil penalty or fine under Act 501; the [State] has not taken steps to begin penalizing or fining Tofurky under Act 501; Tofurky has not alleged that it has taken any steps to remove its products from stores in Arkansas; Tofurky has not alleged that it has taken any steps to change its marketing practice for fear of Act 501’s mandates; and Tofurky does not appear to have removed any of its products or changed its labeling practices”—fell flat.  Indeed, the Court pointed out that there would be absolutely nothing preventing the State from retroactively levying hefty civil penalties against Tofurky at the conclusion of this litigation.  Turtle Island at *5.

Abstention. The State also tried to persuade the federal district court to abstain from addressing the constitutionality of Act 501 and, instead, defer to the Arkansas’ state courts to interpret the law.  This was an “improper” invitation according to the Court.  See id. at *6.  While state courts may be better positioned to narrow the construction of legislation to preserve its constitutionality, the Court noted that the State proffered no narrowed construction that would avoid the constitutional questions that plagued this particular law, nor could the Court envision how Act 501 was readily susceptible to a narrowed construction that would avoid the issues presented in this case.  Id. at *7.  The Court declined the State’s request to abstain.[3]

Preliminary Injunctive Relief.  The Court then got to the core of Tofurky’s application for preliminary injunctive relief—whether Tofurky demonstrated a likelihood of success on the merits of its claims.  With the parties in agreement that the challenged speech was “commercial,” the Court focused its analysis on whether Arkansas unconstitutionally restricted Tofurky’s speech or, as the State urged, whether Tofurky’s speech was “inherently misleading” and, in any event, the State had “a substantial interest in regulating the speech, Act 501 directly and materially advances the State’s interest, and Act 501’s restriction is no more extensive than necessary” to advance that interest.  Id. at *11.

After a review of certain Tofurky labels, the Court found nothing “inherently misleading” about them.  Though they utilize certain words that are “traditionally associated with animal-based meat,” those same labels used appropriate modifiers and/or displayed additional information to aid a consumer in understanding the contents of the package, i.e., “veggie burger,” or “Chorizo Style Sausage” also labeled as “all vegan.”  The State’s position “require[d] the assumption that a reasonable consumer will disregard all other words found on the label.”  See Ang v. Whitewave Foods Co., No. 13-cv-1953, 2013 WL 6492353, at *4 (N.D. Cal. Dec. 10, 2013) (“Under Plaintiffs’ logic, a reasonable consumer might also believe that veggie bacon contains pork, that flourless chocolate cake contains flour, or that e-books are made out of paper.”).  Rather, such modifiers and explanatory language on the packaging made it such that Tofurky would likely prevail on its argument that the labels were not inherently misleading.

And though the Court acknowledged that the State likely has a substantial interest in protecting consumers from falsely- or misleadingly- labeled food products, it also found that Tofurky would likely prevail (i) on its arguments that Act 501 does not directly and materially advance that interest given the likelihood that Tofurky’s labels are neither false nor misleading and (ii) on its argument that Act 501 is more extensive than necessary to achieve the State’s interest.  Id. at *13.  After finding that the remaining preliminary injunction considerations[4] favored Tofurky, the Court granted the application to enjoin enforcement of the six identified provisions of Act 501 as applied to Tofurky.

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Arkansas is one of a growing number of states seeking to ban the use of certain meat-adjacent words.  Many observers argue that these laws are aimed—not at protecting consumers—but rather at tamping down on a growing market for vegan and vegetarian substitutes for products traditionally made of beef, poultry, etc.   Motivation aside, courts engaging with these laws are skeptical that using terms like “hot dog” on labels that also prominently explain the package contents is not misleading and, moreover, that arguments to the contrary do not pass muster under any appropriate understanding of what makes out consumer confusion.