Opinion
Civil Action No. 04-690 Section "A" (1).
December 22, 2004
ORDER AND REASONS
Before the Court is a Motion for Partial Summary Judgment (Rec. Doc. 28) filed by plaintiff Piazza's Seafood World, L.L.C. ("Piazza"), and a Motion for New Trial on Plaintiff's Motion for Partial Summary Judgment (Rec. Doc. 23) filed by defendant, Bob Odom, individually and in his capacity as Commissioner of the Louisiana Department of Agriculture and Forestry ("the Commissioner"). Both motions are opposed and were submitted for consideration on the briefs on November 3, 2004, and September 21, 2004, respectively.
Piazza moves the Court pursuant to Rule 56 of the Federal Rules of Civil Procedure for partial summary judgment on the grounds that Louisiana Revised Statute §§ 3:4617(D) (E) are unconstitutional. The Commissioner moves for reconsideration of the Court's June 17, 2004, order enjoining enforcement of Louisiana Revised Statute § 3:4617(C). For the reasons that follow, the Motion for Partial Summary Judgment is GRANTED and the Motion for New Trial on Plaintiff's Motion for Partial Summary Judgment is DENIED.
I. FACTUAL AND PROCEDURAL BACKGROUND
Piazza imports seafood, including fish, crayfish, crabs, shrimp, and lobster, from various countries around the world. Piazza sells its imported seafood primarily through large national distributors. The distributors then sell the product to wholesale purchasers and end-users (restaurants) both in and outside of Louisiana. A small percentage of Plaintiff's products are sold to retail consumers.
One of the food products imported by Piazza is a catfish grown in China. According to Piazza, these Chinese-grown catfish are members of the family Ictaluridae and are biologically identical to domestic catfish that belong to that same family. Piazza asserts that its Chinese-grown catfish are direct descendants of Alabama catfish.
In March 2004, the Commissioner served three businesses in Jefferson, Orleans, and Baton Rouge parishes with ACS Stop Orders. Pla. Exhs. 2, 3, 4. The ACS Orders ordered the businesses not to "sell, offer for sale, apply, move, or remove" any of the fish purchased from or stored on behalf of Piazza due to violations of La.R.S. § 4617(C). Id. Section 4617, entitled Fraud by vendor or by purchaser, provides in pertinent part:
No one shall misrepresent the name, or type of any fruit, vegetable, grain, meat, or fish, including catfish, sold or offered or exposed for sale, to any actual or prospective consumer. "Catfish" shall mean only those species within the family Ictaluridae or the family Anarhichadidae and grown in the United States of America.
La.Rev.Stat. Ann. § 3:4617(C) (West Supp. 2004) (emphasis added). The Court concluded that this section of the statute, hereinafter referred to as "the Catfish Labeling Law," was preempted by federal law, and on June 17, 2004, the Court entered an order enjoining the Commissioner from enforcing it. The Commissioner seeks reconsideration of that order via the motion for new trial sub judice.
On April 26, 2004, and September 10, 2004, Plaintiff amended its complaint to challenge parts D and E of La.R.S. § 4617. Subsections D and E of the statute, hereinafter referred to as "the Cajun Labeling Law," provide:
D. No person shall advertise, sell, offer or expose for sale, or distribute food or food products as "Cajun", "Louisiana Creole", or any derivative thereof unless the food or food product would qualify for the ten percent preference for products produced, processed, or manufactured in Louisiana under R.S. 38:2251 and R.S. 39:1595. Food brought into and processed in Louisiana shall not be considered as food or food products made in Louisiana, for purposes of this Section, unless the food has been substantially transformed by processing in Louisiana.
E. No person shall advertise, sell, offer or expose for sale, or distribute food or food products that do not qualify under this Section for labeling as "Cajun", "Louisiana Creole", or any derivative thereof in any packaging that would lead a reasonable person to believe that the food or food product qualifies as "Cajun" or "Louisiana Creole" food or food products, as defined in this Section.
La.Rev.Stat. Ann. § 3:4617(D) (E) (West Supp. 2004) (repealed in part by 2004 La. Acts 9). Section 3:4617 as originally enacted contained subsection F which provided as follows:
F. The provisions of Subsections D and E of this Section shall not infringe upon rights acquired pursuant to any trademark or trade name legally registered with the state of Louisiana as of May 15, 2003.Id. § 4617(E). Effective May 6, 2004, the legislature repealed subsection F in its entirety. 2004 La. Acts 9.
Plaintiff asserts that its principal, Sal Piazza ("Piazza"), began marketing certain products under the brand names "Cajun Boy" and "Cajun Delight" (collectively referred to as "Cajun Boy") some time in 1976. Plaintiff asserts that it has a substantial investment of money and time in promoting its Cajun Boy products and claims sales of over fifty million dollars in the last five years alone. In 2000, Piazza registered the Cajun Delight name with the Louisiana Secretary of State. In April 2003 Piazza registered the Cajun Boy trade name with the Secretary of State.
II. DISCUSSION A. The Commissioner's Motion for a New Trial Regarding the Validity of the Catfish Labeling Law
The Commissioner moves the Court to reconsider its prior ruling that the Catfish Labeling Law is preempted by 21 U.S.C. § 343(t). The Commissioner asserts that Plaintiff did not present sufficient evidence to show that the Catfish Labeling Law was an obstacle to congress's purpose and intent in enacting § 343(t).
The Court gave detailed reasons in its June 17, 2004, order as to why the Catfish Labeling Law is preempted by federal law. The Commissioner has not persuaded the Court that its reasons were unsound. Moreover, although the Court did not expressly rule that the statute was unconstitutional, the Court nevertheless devoted a substantial section of its opinion to explaining why the Catfish labeling law in all likelihood violates the Dormant Commerce Clause. Even if preemption did not apply, the Court is convinced that the Catfish Labeling Law would nevertheless be unconstitutional. The Catfish Labeling law is a protectionist measure that discriminates against foreign commerce in favor of local interests. The Motion for New Trial on Plaintiff's Motion for Partial Summary Judgment is therefore DENIED.
B. Plaintiff's Motion for Partial Summary Judgment Regarding the Validity of the Cajun Labeling Law
Plaintiff argues that the Cajun Labeling Law is unconstitutional on its face because it violates: 1) the First Amendment, 2) the Commerce Clause (interstate and foreign), 3) the Equal Protection Clause, and 4) the Takings Clause. As explained below, the Court is persuaded that Plaintiff's First Amendment challenge has merit. The Court therefore declines to address the remaining constitutional arguments.
The parties agree that a trade name constitutes commercial speech, and that regulations on commercial speech are subject to the four-part test articulated by the Supreme Court in Central Hudson Gas v. Public Service Commission, 447 U.S. 557 (1980). InCentral Hudson, the Court explained that the first step in commercial speech cases is to determine whether the expression at issue is protected by the First Amendment. Id. at 566. Commercial speech is protected only when it concerns lawful activity and when is it not misleading. Id. The government can prohibit misleading advertising altogether without running afoul of the First Amendment. In re R.M.J., 455 U.S. 191, 203 (1982). If the speech is not misleading and consequently protected by the First Amendment, the court must then determine whether the asserted governmental interest is substantial. Central Hudson, 447 U.S. at 566. If the interest is substantial, the Court then must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than necessary to serve that interest. Id. Where the First Amendment applies to protect speech, the state bears the burden of establishing that its restrictions comply with constitutional mandates. See City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 416 n. 12 (1993).
Under Central Hudson, the threshold determination the Court must make is whether Plaintiff's use of the Cajun Boy trade name is subject to First Amendment protections. Plaintiff uses its trade name to sell seafood and the Commissioner does not dispute that this is a lawful activity. He argues, however, that Plaintiff's use of the Cajun Boy trade name to sell non-Louisiana seafood is misleading and deceptive. The Commissioner's position is that the First Amendment does not apply here because Plaintiff's speech is misleading.
According to the Commissioner, the public equates the term "Cajun" with "made in Louisiana." Thus, according to the Commissioner, Plaintiff uses the Cajun Boy name to mislead customers into believing that they are purchasing a product that is from Louisiana. The Commissioner notes that Plaintiff's products contain their country of origin on the packaging but that the print is much smaller than that used to proclaim the Cajun Boy name. The Commissioner denies that printing the true country of origin on the packaging has any meliorating effect on the misleading nature of the Cajun Boy brand.
In support of his argument that the term Cajun means Louisiana the Commissioner has submitted affidavits from the principals of two local marketing research firms. The first affidavit is from Ms. Elizabeth Thibodeaux Wolfers, President and CEO of Marketing Resources International, Inc. (Def. Exh., unnumbered). Ms. Wolfers claims to have polled Louisiana residents and based on 1209 completed surveys determined that the majority of Louisianians believe that a product labeled "Cajun" comes from Louisiana. (Id.). The second affidavit is from Ms. Mary L. Caplinger, Vice President of Discovery Group, Ltd., a market research firm. (Def. Exh., unnumbered). Ms. Caplinger states that she has provided consumer research services for various restaurants and food-related businesses. She states that in her opinion the term "Cajun" is inextricably and firmly linked with Louisiana. (Id.). The Commissioner has also submitted a page from the Food Standards and Labeling Policy Book published by the United States Department of Agriculture in May 2003. (Def. Exh. 3). The page appears to be part of some type of food glossary and for the term Cajun it states, "Refers to product made in Louisiana." (Id.).
Finally, the Commissioner has submitted for the Court's review an actual Cajun Boy crab meat container recently purchased at a local grocery store. (Def. Exh. 1). The Commissioner asserts that this container clearly demonstrates that Plaintiff seeks to mislead people into thinking that its foreign products are Louisiana products.
Plaintiff disputes that the term "Cajun" is synonymous with Louisiana. Rather, Plaintiff points out that dictionaries and encyclopedias define a Cajun as a member of a group of people in southern Louisiana who descended from French Canadians in Nova Scotia or a member of a group living in southern Louisiana, Alabama, and Mississippi of mixed ancestry. Plaintiff asserts that by definition, Cajun does not mean Louisiana. Plaintiff directs the Court's attention to the 1990 federal census which shows that about one-third of those citizens who describe themselves as "Acadian/Cajun" reside outside of Louisiana. Finally, Plaintiff asserts that in common food parlance the term "Cajun" refers to a style of spicy cooking and not the place from which the raw ingredients derived. Plaintiff argues that the affidavits submitted by the Commissioner are "woefully deficient" for numerous reasons and are not sound from an evidentiary standpoint.
Responding to the Commissioner's assertion that its use of the name Cajun Boy misleads the public, Plaintiff points out that the overwhelming majority of its sales are to wholesale food purchasers, institutional buyers and distributors, who are well aware that Cajun Boy products do not derive from Louisiana. Plaintiff adds that the packing sent to these customers is clearly marked with the product's country of origin. Plaintiff explains that during January 1, 2004, through September 30, 2004, Plaintiff's sales to retailers represented less than one percent of its business. (Piazza Affid., Pla. Reply Exh. 8). Plaintiff directs the Court's attention to the country of origin which is clearly printed on the side of the crab meat container submitted by the Commissioner. While denying that the public is likely to be misled by the retail packaging, Plaintiff asserts that the retail business is such a small percentage of its business that the Cajun Labeling Law, which deprives Plaintiff completely of the use of its trade name, is far broader than necessary to protect the public from deception.
As the Fifth Circuit recognized in Joe Conte Toyota, Inc. v. Louisiana Motor Vehicle Commission, the Supreme Court's commercial speech jurisprudence has created somewhat of a "hierarchy of misleading commercial speech." 24 F.3d 754, 756 (5th Cir. 1994). The highest level on the hierarchy is "actually misleading" commercial speech. Commercial speech is "actually misleading" only where the record contains actual evidence of deception. Id. (citing Peel v. Attorney Disciplinary Comm'n, 496 U.S. 91, 106 (1990) (plurality)). Commercial speech is "inherently misleading" when "the particular method by which the information is imparted to consumers is inherently conducive to deception and coercion." Id. (quotingPeel, 496 U.S. at 112 (Marshall, J. Brennan, J., concurring)). Inherently misleading commercial speech is that which is "inherently likely to deceive the public." Id. at 121 (O'Connor, J., Rehnquist, C.J., Scalia, J., dissenting). Commercial speech can be "inherently misleading" notwithstanding a lack of actual evidence of deception in the record. Id. Finally, the Supreme Court has recognized a third category of commercial speech as that which can be "potentially misleading." In re R.M.J., 455 U.S. at 203. States cannot place an absolute ban on potentially misleading commercial speech if the information can also be presented in a way that is not deceptive. Id. Restrictions on potentially misleading commercial speech may be no broader than reasonably necessary to prevent the deception. Id.
The record contains no evidence of actual deception so Plaintiff's use of the Cajun Boy trade name cannot be actually misleading. While neither party has expressly referred to the categories of "misleading" that have emerged in the jurisprudence, the Commissioner in essence is arguing that the Cajun Boy trade name is inherently misleading whereas Plaintiff denies that there is anything misleading whatsoever about his trade name. The Court disagrees with both parties and finds that Plaintiff's use of his trade name fits into the "potentially misleading" category of commercial speech.
First of all, with respect to Plaintiff's position, it is highly unlikely that the public at large has reviewed encyclopedias or dictionaries for the true meaning of the term Cajun. Trivia afficionados might appreciate that persons of Cajun heritage migrated here from afar but today it remains a fact that the majority of those persons considered to be Cajun live in Louisiana. The Court is unmoved by the fact that one-third of those persons claiming Cajun heritage do not live in Louisiana because those same persons might very well have relocated from Louisiana. Notwithstanding Plaintiff's arguments about the evidentiary weaknesses of the Commissioner's affidavits, this Court has no doubt that the overwhelming majority of citizens do in fact associate the term Cajun with Louisiana. Perhaps the more erudite of our citizenry along with history buffs might be less inclined to associate the term Cajun with Louisiana but the Court is confident that they do not in any stretch of the imagination associate the term with China, Vietnam, and the other foreign countries where Plaintiff obtains its products. Thus, even if the term Cajun does not mean Louisiana in a technical sense, the Commissioner's assertion that people generally associate the term Cajun with Louisiana is wholly credible.
Moreover, it is beyond cavil that southern Louisiana is a region widely known for its wonderful, fresh seafood. Therefore, when Plaintiff uses the Cajur. Boy trade name to distribute seafood from its place of business in Harahan, Louisiana, the average citizen might very well assume that the seafood he is purchasing is a Louisiana product. As Representative Fannin pointed out at the committee hearing on House Bill 891, Plaintiff's business might not be as successful if its product were called "China Boy" brand seafood rather than Cajun Boy. (Def. Exh. 4, at 9, Transcript of Hearing on HB 891 Before the House Comm. on Agric., Forestry, Aquaculture, Rural Dev., Mar. 31, 2004). The Court has no doubt that Plaintiff benefits from the association that people make, even if on a subconscious level, between the word Cajun and seafood. Of course, that association will always be an erroneous one because Plaintiff only sells foreign seafood products.
Nonetheless, the Court is not persuaded by the Commissioner's assertion that the Cajun Boy trade name is inherently misleading as opposed to potentially misleading. Two key facts weigh heavily in favor of this conclusion. First of all, the Commissioner has never disputed that the overwhelming majority of Plaintiff's customer base, i.e., those purchasing products sold under the Cajun Boy trade name, are seafood wholesalers rather than members of the general public. In other words, the majority of those customers who purchase under the Cajun Boy name are sophisticated buyers "in the business" so to speak and they know exactly what they are buying. They are not average citizens who might be confused, misled, or deceived by the Cajun Boy trade name. Further, it is undisputed that all of the product sent to those customers is labeled with the product's country of origin. Vis à vis this institutional customer base there would seem to be little opportunity for deception.
Therefore, any potential for misunderstanding or deception would lie only with retail sales where the public at large might purchase one of Plaintiff's products believing it to derive from Louisiana. But the only Cajun Boy retail packaging submitted into the record is the Cajun Boy crab meat container and it has the product's country of origin clearly printed on the outside of the package. (Def. Exh. 1). Customers can therefore easily determine prior to the purchase that the product in the container is not from Louisiana. In today's high tech global market, customers of all socio-economic backgrounds are likely more accustomed to discovering that seemly local products are no longer local. Thus, for any customer who cares to know, he can easily discern the product's country of origin before making the purchasing decision. If Plaintiff were using the Cajun Boy trade name on its packaging without disclosing the country of origin this would be a very different case. But throughout the course of this litigation the Court has not seen any Cajun Boy products that were packaged without the country of origin clearly displayed on the packaging. That some customers won't avail themselves of the information on the package does not make Plaintiff's use of its trade name inherently misleading. But some customers, however few, will surely buy the product based upon an erroneous association, so the Court cannot accept Plaintiff's contention that there is nothing whatsoever misleading about the use of its trade name. Because Plaintiffs' trade name is presented in away that is not deceptive, i.e., with the country of origin clearly displayed, Cajun Boy trade name is not inherently misleading but rather only potentially misleading.
The Commissioner points to "Plaintiff's misleading and deceptive conduct with regard to the use of 'Cajun'" because Piazza claims to have used the Cajun Boy name much earlier than what the documentary evidence establishes. (Def. Oppo. at 12). The Commissioner asserts that the longevity of Plaintiff's trade name is a material fact in dispute. (Id.). The Commissioner's reliance on such assertions is misplaced. The longevity of Plaintiff's trade name might very well be in dispute but it not material to the First Amendment analysis. Further, any alleged deception on the part of Piazza as to when he began using the Cajun Boy name likewise is not material to the First Amendment analysis. The Central Hudson analysis is concerned only with whether the speech at issue is misleading and deceptive to the public receiving the message. Allegations regarding the allegedly deceptive conduct of corporate principals have no place in the analysis.
Because Plaintiff's use of the Cajun Boy name constitutes potentially misleading commercial speech it is subject to First Amendment protections. Therefore, in order for the Cajun Labeling Law to pass constitutional muster, the Commissioner must establish a substantial governmental interest that is directly advanced by the Cajun Labeling Law. Assuming these requirements are met, the Commissioner must further establish that the Cajun Labeling law is no more extensive than necessary to serve that interest. The Court is not persuaded that the Cajun Labeling Law meets all of these requirements in light of the facts presented in this case.
The first part of the Commissioner's burden is to identify the substantial governmental interest that Cajun Labeling law is supposed to advance. The Commissioner's assertion that the Cajun Labeling Law has nothing to do with economic protectionism is wholly unconvincing. The transcript of the committee hearing on HB 891, which the Commissioner urges the Court to review in support of his position, belies that assertion. Representative St. Germain spoke candidly about the problems that our local seafood businesses have in competing with the foreign seafood market. (Def Exh. 1, at 10-11). However, the transcript also indicates that the legislature was concerned with the public being misled or deceived into buying a foreign product believed to be from Louisiana. It can hardly be disputed that the State's interest in protecting the public from misleading and deceptive marketing practices is substantial.
Given the State's substantial interest in protecting the public from misleading and deceptive marketing practices, Central Hudson's third and fourth prongs require the Commissioner to show that the Cajun Labeling Law directly advances the governmental interest asserted, and that it is not more extensive than necessary to serve that interest. In order to meet this burden, the Commissioner must establish a "reasonable fit" between the State's interests in preventing deceptive marketing and the means it has chosen to further that interest. City of Cincinnati, 507 U.S. at 416. The "fit" need not necessarily be perfect but it must be reasonable. Fla. Bar v. Went For It, Inc., 515 U.S. 618, 632 (1995) (quoting Bd. of Trustees v. Fox, 492 U.S. 469, 480 (1989)). The means chosen need not be "'the single best disposition but one whose scope is "in proportion to the interest served," that employs not necessarily the least restrictive means but . . . a means narrowly tailored to achieve the desired objective.'" Id. While the "least restrictive means" test has no role in the commercial speech context, the "reasonable fit" test does not equate with the less rigorous rational basis review. Id. (citing Fox, 492 U.S. at 480. "A regulation need not be 'absolutely the least severe that will achieve the desired end,' but if there are numerous and obvious less-burdensome alternatives to the restriction on commercial speech, that is certainly a relevant consideration in determining whether the 'fit' between ends and means is reasonable." City of Cincinnati, 507 U.S. at 418 n. 13 (citations omitted).
The Cajun Labeling Law is the means chosen by the State to prevent deceptive marketing with respect to non-Louisiana food products being passed off as Louisiana food products. As applied to Plaintiff whose products all derive from outside of Louisiana, the Cajun Labeling Law constitutes a total bar to its continued use of the trade name under which it currently conducts its business in Louisiana. Although the statute's goal is intended to strike at deception and misleading practices, it recognizes no exception for cases like this one where disclosure of truthful information eliminates the deceptive nature of the labeling. As applied in this case, the Cajun Labeling Law operates to completely stifle Plaintiff's protected speech while contributing very little toward advancing the State's interest in preventing deception. Such a lopsided application does not constitute a "reasonable fit" between the State's interests and the means employed to further those interests. The statute is, as applied here, far more extensive than necessary to serve the State's asserted interest. The Court can reach no conclusion except that the Cajun Labeling Law, as applied in this case, violates the First Amendment.
The Court does not, however, agree with Plaintiff's contention that the Cajun Labeling Law is facially invalid. The Court has no doubt that in some cases the use of the term Cajun to describe non-Louisiana products would be inherently misleading and inherently misleading speech is not subject to First Amendment protections. A fact crucial to the outcome in this case is that Plaintiff's disclosure of the product's country of origin takes Plaintiff's use of the term Cajun out of the inherently misleading category thereby implicating the First Amendment. Another crucial fact is that the Cajun Labeling Law does little to further the State's interest under these facts. But surely there are factual scenarios where the Cajun Labeling Law will apply unfettered by a First Amendment challenge. Therefore, the statute need not be invalidated in its entirety.
In sum, the Court finds that the Cajun Labeling Law, as applied to Plaintiff under these facts, is violative of the First Amendment.
Accordingly;
IT IS ORDERED that the Motion for Partial Summary Judgment (Rec. Doc. 28) filed by plaintiff Piazza's Seafood World, L.L.C. should be and is hereby GRANTED. The Commissioner is ENJOINED from enforcing La.R.S. 3:4617(D) (E) against Plaintiff;
IT IS FURTHER ORDERED that the Motion for New Trial on Plaintiff's Motion for Partial Summary Judgment (Rec. Doc. 23) filed by the Commissioner should be and is hereby DENIED.