Consumer Law

Second Circuit Upholds New York Fast-Food Menu Rule

By CL&P Blog

by Deepak Gupta

I'm delighted that the Second Circuit has decided to uphold New York City?s landmark fast-food menu rule, which requires chain restaurants to disclose calorie information on their menus. (We previously blogged about the district court's decision here.) Today?s decision is a major victory in the fight against the obesity epidemic. It protects consumers? right to know important nutritional facts and make informed and healthy choices when they eat out. The ruling is also significant because it clears the way for many similar state and local laws throughout the nation, such as those recently passed by the state of California and the city of Philadelphia.

The fast-food industry had asked the court to strike down New York?s rule, claiming that it was preempted by the Nutrition Labeling and Education Act of 1990 and that it violated the First Amendment under a compelled-speech theory. Public Citizen filed a brief opposing those arguments, representing a broad coalition that included Congressman Henry Waxman (the lead sponsor of the 1990 law), former FDA Commissioner David Kessler (who signed the first rules implementing the statute), the Center for Science in the Public Interest, the American Medical Association, the American Diabetes Association and many other leading public health groups and academic experts.

Today?s decision echoes many of our arguments and begins with a passage that comes right out of our brief: "In requiring chain restaurants to post calorie information on their menus," the court concluded, "New York City merely stepped into a sphere that Congress intentionally left open to state and local governments.?

In assessing the industry's First Amendment arguments under a rational basis standard, the court cited research showing that eating out is a major contributor to obesity and that consumers are typically unable to assess the caloric content of foods. They do not know, for example, that a smoked turkey sandwich at Chili?s (930 calories) contains more calories than a sirloin steak (540 calories), or that two jelly donuts from Dunkin Donuts have fewer calories than a sesame bagel with cream cheese.  Until I started working on this case, I had no idea either.

As a matter of political philosopy, New York's rule is perhaps a good illustration of the kind of "libertarian paternalism" advocated by scholars influenced by behavioral economics, such as Cass Sunstein and Richard Thalen (as described in their recent book, Nudge, which Jeff Sovern has thoughtfully blogged about in these pages.)  In theory, at least, this is the kind of law that people from all ends of the political spectrum should be able to support; it helps consumers make choices that will maximize their welfare, but the choice is ultimately left up to them. Even Richard Posner has offered a qualified defense of the regulation.

Full post as published by CL&P Blog on February 17, 2009 (boomark / email).