Turtle Island Foods SPC v. Soman

Decision Date30 September 2022
Docket Number4:19-cv-00514-KGB
PartiesTURTLE ISLAND FOODS SPC d/b/a TOFURKY COMPANY PLAINTIFF v. NIKHIL SOMAN in his official capacity as Director of the Arkansas Bureau of Standards DEFENDANT
CourtU.S. District Court — Eastern District of Arkansas

TURTLE ISLAND FOODS SPC d/b/a TOFURKY COMPANY PLAINTIFF
v.
NIKHIL SOMAN in his official capacity as Director of the Arkansas Bureau of Standards DEFENDANT

No. 4:19-cv-00514-KGB

United States District Court, E.D. Arkansas, Central Division

September 30, 2022


ORDER

Kristine G. Baker United States District Judge

Turtle Island Foods SPC, d/b/a The Tofurky Company (“Tofurky”) brings this action seeking declaratory and injunctive relief under 42 U.S.C. § 1983 to challenge the constitutionality of Arkansas Act 501, Arkansas Code Annotated § 2-1-301, et seq. (“Act 501”) (Dkt. Nos. 31, ¶¶ 1, 3; 43, at 1). Specifically, Tofurky challenges six provisions from Act 501, Arkansas Code Annotated § 2-1-305(2), (5), (6), (8), (9), and (10) (Dkt. No. 44, at 1). Tofurky asserts that these provisions represent 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 (Dkt. No. 31, ¶ 2). As such, Tofurky claims that Act 501 violates the Free Speech Clause of the First Amendment and the Due Process Clause of the Fourteenth Amendment (Id.).[1]

This Court previously entered a preliminary injunction Order determining that Tofurky has Article III standing to bring this legal challenge (Dkt. No. 25, at 8-12); that this Court should not abstain from addressing the constitutionality of Act 501 (Dkt. No. 25, at 12-15); and that Tofurky

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met its burden to justify the grant of a preliminary injunction enjoining the State from enforcing the challenged provisions of Act 501 as applied to Tofurky: Arkansas Code Annotated § 2-1305(2), (5), (6), (8), (9), and (10) (Dkt. No. 25, at 16-34). Later, the parties jointly moved to consolidate the preliminary injunction hearing with the trial on the merits (Dkt. No. 40). The Court granted the parties' joint motion, but because Tofurky asserted that it was entitled to all of the relief identified in its amended complaint, including facial declaratory and injunctive relief, the Court permitted both parties to address the request for additional relief in supplemental briefing (Dkt. No. 42).

For the following reasons and for those reasons explained in its preliminary injunction Order, the Court determines that Tofurky has Article III standing to bring this legal challenge (Dkt. No. 25, at 8-12); that this Court should not abstain from addressing the constitutionality of Act 501 (Dkt. No. 25, at 12-15); and that Tofurky meets its burden to justify the grant of an injunction consistent with the terms of this Order enjoining the State from enforcing the challenged provisions of Act 501 as applied to Tofurky: Arkansas Code Annotated § 2-1-305(2), (5), (6), (8), (9), and (10) (Dkt. No. 25, at 16-34). The Court grants, in part, and denies, in part, Tofurky's request for facial declaratory and injunctive relief consistent with the terms of this Order (Dkt. Nos. 31, 43).

I. Procedural Background

Tofurky filed its complaint on July 22, 2019 (Dkt. No. 1). Act 501 took effect on July 24, 2019. See Ark. Code Ann. § 2-1-305. The State filed its answer to Tofurky's complaint (Dkt. No. 13). Though the complaint mentioned a motion for a preliminary injunction, Tofurky separately moved for preliminary injunction (Dkt. No. 14). Along with its motion for preliminary injunction, Tofurky included a declaration from Jamie Athos, President and Chief Executive Officer of Tofurky; a declaration from Marcus Onley, Policy Coordinator at The Good Food Institute; a

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declaration from Candice Misenheimer, a legal assistant at the law firm of James, Carter & Priebe, LLP; and a brief in support of the motion (Dkt. Nos. 14-1, 14-2, 14-3, 15). The State filed a response in opposition to Tofurky's motion for preliminary injunction (Dkt. No. 17). Along with its response in opposition, the State included a copy of Act 501 and a declaration from Mr. Soman (Dkt. Nos. 17-1, 17-2). Although the Court conducted a hearing on the motion, the parties presented only argument at that hearing, no additional evidence.

The Court entered an Order granting Tofurky's motion for a preliminary injunction on its as applied challenge on December 11, 2019 (Dkt. No. 25).

Tofurky filed an amended complaint for declaratory and injunctive relief (“the operative complaint”) on April 15, 2020 (Dkt. No. 31). The operative complaint removed Tofurky's Dormant Commerce Clause claim and corrected a typographical error (Dkt. No. 29). The State answered the operative complaint on April 16, 2020 (Dkt. No. 32).

On September 23, 2020, the parties filed a joint motion, pursuant to Federal Rule of Civil Procedure 65(a)(2), asking the Court to consolidate the preliminary injunction proceedings with the trial on the merits (Dkt. No. 40). The parties stipulated “that no discovery is necessary and agreed that the record before the Court on Plaintiff's motion for preliminary injunction is sufficient for the entry of a final order and judgment related to the six provisions of Act 501 challenged by Plaintiff here.” (Id., at 1). Tofurky acknowledged that the Court limited its preliminary injunction analysis to its as-applied claim, but in the joint motion Tofurky requests all the relief identified in the amended complaint including facial declaratory and injunctive relief (Id., at 2). The State respectfully disagreed with the Court's resolution of the preliminary injunction motion and preserved its rights of appeal (Id., at 3). The Court granted the parties' joint motion to consolidate

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the preliminary injunction proceedings with the trial on the merits and set a schedule for the parties to provide the Court with supplemental briefing (Dkt. No. 42).

Tofurky filed a supplemental memorandum in support of its request for facial declaratory and injunctive relief (Dkt. No. 43). Tofurky asks the Court to: (1) declare that Arkansas Code Annotated § 2-1-305(6), (8), (9), and (10) facially violate the First Amendment; (2) declare that Arkansas Code Annotated § 2-1-305(10) facially violates the Fourteenth Amendment's Due Process Clause; (3) permanently enjoin the State from enforcing Arkansas Code Annotated § 2-1305(6), (8), (9), and (10); (4) declare that Arkansas Code Annotated § 2-1-305(2) and (5) violate the First Amendment as applied to the labels in the record and similar materials; and (5) permanently enjoin the State from enforcing Arkansas Code Annotated § 2-1-305(2) and (5) as applied to the labels in the record and similar materials (Dkt. No. 43, at 15-16). The State responded asking that the Court find that the challenged provisions of the Act do not violate the First Amendment or the Fourteenth Amendment's Due Process Clause and that the Court deny Tofurky's request for declaratory and injunctive relief (Dkt. No. 44, at 21).

II. Findings Of Fact

Tofurky is a social purpose corporation incorporated in the State of Washington and headquartered in Hood River, Oregon (Dkt. No. 1, ¶ 7). Mr. Soman is the Director of the Arkansas Bureau of Standards (“the Bureau”), a division of the Arkansas Department of Agriculture (Id., ¶ 10).

Tofurky develops, produces, markets, and sells plant-based food products, including plant-based meats (Id., ¶ 9; Dkt. No. 14-1, ¶ 3). All of Tofurky's products are vegan (Dkt. No. 14-1, ¶ 1). Plant-based meats are typically made from soy, tempeh, wheat, jackfruit, textured vegetable protein, or other vegan ingredients (Id., ¶ 3). The texture, flavor, and appearance of plant-based

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meats resembles meat products made from slaughtered animals (Id.). Unlike animal-based meats, however, plant-based meats are made from vegan ingredients (Id.). The products are marketed and sold nationwide, including throughout Arkansas (Id., ¶¶ 3, 9). Tofurky is one of many companies selling plant-based food products in stores throughout the country, including Arkansas (Dkt. Nos. 15, at 3; 14-1, ¶ 9).

The panel of seven Tofurky labels that are in the record before the Court “fairly and accurately depicts the primary display panel of some of Tofurky's plant-base meat products” (Dkt. Nos. 14-1, ¶ 4; 14-1, at 6-7 (panel of seven Tofurky labels)).

Tofurky uses traditional meat-based terms like “chorizo,” “ham roast,” and “hot dogs,” alongside qualifiers like “all vegan,” “plant based,” “vegetarian,” and “veggie,” to show that its products are plant-based meats that can be served and consumed just like any other meats (Dkt. Nos. 14-1, ¶ 5; 17, at 2). Tofurky believes that its current packaging and marketing materials accurately convey the nature and contents of its plant-based meat products (Dkt. No. 14-1, ¶ 25). Tofurky includes a list of ingredients and nutritional information on every product package (Id., ¶ 8). The dispute regarding Act 501 notwithstanding, Tofurky's products, including its plant-based meat products, comply with federal food labeling regulations as well as numerous state and federal laws that prohibit false and deceptive labeling and marketing for food products and consumer products more generally (Id., ¶ 12). Tofurky has never been the subject of enforcement action by any federal agency for marketing or labeling its products in a misleading manner (Id., ¶ 13). Tofurkey is not aware of a single consumer communication sent to Tofurky or to any government agency complaining that a consumer mistakenly believed Tofurky's plant-based meat products were, or contained meat, from slaughtered animals (Id., ¶ 10).

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Tofurky has invested significant time and resources to develop packaging and marketing materials that effectively, truthfully, and non-deceptively promote its plant-based meat products (Id., ¶ 11). Each package design of Tofurky products is vetted internally and by third parties (Id.).

Tofurky asserts that it cannot accurately and effectively describe its products...

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