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ACA and Healthcare Reform

Keller and Heckman LLP: Debate Over NYC Sodium Menu Labeling Gets Salty

On Sept. 9, 2015, the New York City Board of Health unanimously passed regulations making New York the first U.S. city to require restaurants to disclose to diners those menu items that contain more than 2,300 milligrams of sodium, or the equivalent of about one teaspoon of salt.

Under the newly-adopted regulations, all chain restaurants — defined as those having 15 or more locations nationwide — must add a salt-shaker-like symbol on menus next to products that contain more than 2,300 milligrams of sodium by Dec. 1 of this year. Restaurants will also be required to post a statement indicating that the consumption of large amounts of sodium can increase blood pressure and the risk of heart disease and stroke. Violations of the “warning” requirement are punishable by a $200 fine, enforced by city health inspectors.

Whether the required statements indeed constitute a warning, however, may be a subject of contention due to questions of preemption. In 2010, the Affordable Care Act amended the Federal Food, Drug and Cosmetic Act to require chain restaurants — defined as those that are part of a chain with 20 or more locations doing business under the same name and offering for sale substantially the same menu items — to disclose caloric content on menu labeling and menu boards and to make additional nutrition information, including information on sodium content, available to consumers on request.

Although the ACA generally prohibits states and localities from establishing a requirement for restaurant labeling that is not identical to the FDCA requirements, states and localities may require restaurants to provide a “warning concerning the safety of the food or component of the food.” Pub. L. 111–148, title IV, §4205(d). The ACA does not elaborate further on when an otherwise preempted labeling requirement constitutes a permissible warning. The U.S. Food and Drug Administration’s only statement on the topic has been to clarify that “warnings concerning food safety” are “not limited to microbiological hazards.” 79 Fed. Reg. 71,156 at 71,251 (Dec. 1, 2014).

New York City's requirement could survive a preemption challenge if regulators are successful in convincing the courts that the sodium disclosure is intended to serve as a “warning” rather than a label, an argument that is bolstered by the fact that disclosure is required only if sodium content exceeds the FDA-established daily recommended value (DRV) for sodium.

Opponents of the rule, however, will likely argue that New York City’s sodium disclosure requirement typifies the problem the ACA’s preemption provision was intended to block — a patchwork of regulatory schemes for menu labeling that imposes a disproportionate regulatory burden on restaurants and similar food establishments. After all, opponents might argue, if NYC can require sodium labeling for products that contain more than the RDI for sodium, what would prevent states and localities from requiring disclosure for menu items that contain more than the DRV for fat, saturated fat, carbohydrates, sugar or other nutrients of concern? For that matter, why not require disclosure if the food does not meet a board-established definition of “healthy”?

As contentious as the substance of the requirement might be, the process leading to its adoption may be an even more attractive target for opponents. The de Blasio administration brought the disclosure requirement directly to the Board of Health — the same method as was controversially used by de Blasio’s predecessor, Michael Bloomberg, to enact limits on the portion size of soft drinks. The New York Court of Appeals, the state’s highest court, struck down the sugary drink limits because the Board of Health had exceeded its authority in enacting the restriction. “By choosing among competing policy goals without any legislative delegation or guidance,” the court held, “the board engaged in lawmaking and thus infringed upon the legislative jurisdiction of the city council.” NY Statewide Coalition v. DOH, 23 NY.3d 681, 690 (2014).

In striking down the sugary drink limit, the New York Court of Appeals looked to four “coalescing circumstances” first articulated in the 1987 decision Boreali v. Axelrod (71 NY2d 1):

  • Has the agency engaged in the balancing of competing concerns of public health and economic cost, thus acting on its own idea of sound public policy?
  • Has the agency created its own comprehensive set of rules without benefit of legislative guidance?
  • Does the challenged rule govern an area in which the legislature has repeatedlytried to reach agreement in the face of substantial public debate and vigorous lobbying by interested factions?
  • Was the rule developed without the benefit of the agency’s special expertise or technical competence?

In reviewing the board’s portion limit for sugary drinks, the court found that these circumstances, taken together, demonstrated the board had crossed “the difficult-to-define line between administrative rule-making and legislative policy-making.” Boreali at 11. The current board’s sodium disclosure requirement may have crossed the same line.

Opponents of the sodium disclosure rule should have little trouble establishing that the board acted without the benefit of legislative guidance and that the rule touches on an area that is the subject of ongoing debate. New York City's legislature has offered no direction to the board on this subject and has twice considered and failed to pass legislation that would have restricted sodium content in restaurant foods. The proposal, known as the “Healthy Happy Meals Bill,” would have placed an upper limit on sodium in children’s meals sold in fast food restaurants. The bill was originally introduced to the New York City Council — the city’s sole legislative body — in 2011 and was re-introduced in August 2014. In both cases, the bill did not pass the committee stage, supporting the position that the city council has not reached consensus on whether, much less how, to address the sodium content of restaurant foods.

The board may also have difficulty refuting the position that the rule was developed without the benefit of its special expertise or technical competence. The record suggests the rule was adopted with very little technical discussion and that the board made no inquiry of its own into the public health consequences of sodium intake, the impact of mandatory disclosures on consumer behavior or the relative merits of mandatory disclosures as compared to other means of influencing sodium intake. The sodium rule is similar in this respect to the regulation limiting indoor smoking that was struck down in Boreali, based in part on the court’s finding that the board enacted the regulation not based on its own inquiry into the subject but rather on common knowledge of the harms of secondhand smoke.

A closer question is whether, in developing the sodium disclosure rule, the board impermissibly engaged in balancing competing concerns of public health and economic cost, thus acting on its own idea of sound public policy. In striking down the sugary drink portion limit, the court found that the board “necessarily chose between ends, including public health, the economic consequences associated with restricting profits by [members of the food industry], tax implications for small business owners and personal autonomy with respect to the choices of New York City residents concerning what they consume.” 23 NY.3d at 698. In that case, the rule “embodied a compromise that attempted to promote a healthy diet without significantly affecting ... industry,” which “necessarily implied a relative valuing of health considerations and economic ends.” Id.

The board has arguably engaged in the same calculus in mandating sodium disclosure, fashioning a rule based on the board’s conclusions about the appropriate balance between competing motivations, including the desire to promote a healthy diet while minimizing impact on industry. Although the board would likely take the position that the sodium disclosure rule and the sugary beverage portion limit differ in that sodium disclosure impacts “the choices of New York City residents concerning what they consume” less directly than limits on sugary beverage portions, it is not clear that this distinction would be sufficient to save the sodium disclosure requirement if it were challenged on a procedural basis. Of course, even if the board were to prevail on this basis, the preemption question remains.

Absent court intervention, the measure is set to take effect on Dec. 1, 2015. The federal menu labeling requirement was originally set to take effect the same day, but the effective date has been pushed back to Dec. 1, 2016 to allow restaurants more time to come into compliance.

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