The 8th Circuit Court of Appeals heard arguments in a dispute between South Dakota ranchers and four of the nation’s largest meatpackers over the long-standing use of the “Product of USA” label on beef processed domestically but sourced from foreign-born cattle.
The case centers on whether federal law bars ranchers from pursuing state-law claims alleging that the label misled consumers and depressed prices paid to domestic cattle producers.
Background
Ranchers Tim Taylor and Bryce Baker filed a class-action lawsuit in 2023 alleging the labeling practices of the Big Four meatpacking companies—JBS Foods USA, Tyson Foods Inc., Cargill Meat Solutions Corporation and National Beef Packing Company LLC—have cost ranchers across the country billions of dollars in lost revenue annually since 2015. The ranchers claim that by labeling beef from imported cattle as “Product of USA,” companies have paid domestic producers about 40% less per year on average since 2015.
In a Jan. 15, 2025, opinion and order, the U.S. District Court for the District of South Dakota granted in part and denied in part the meatpackers’ motion to dismiss. The ranchers allege the companies imported live cattle from foreign countries, slaughtered and processed them in the U.S., and then labeled the resulting beef “Product of USA,” even though the animals were not born or raised domestically.
The district court held that the Federal Meat Inspection Act (FMIA) does not categorically bar the ranchers’ state-law restraint of trade and unjust enrichment claims. The court reasoned that although USDA’s Food Safety and Inspection Service (FSIS) had issued guidance allowing the label under its prior interpretation, that approval did not conclusively establish that the labels were not false or misleading. The court dismissed the ranchers’ civil Racketeer Influenced and Corrupt Organizations (RICO) claim but allowed their restraint of trade and unjust enrichment claims to move forward.
Under the FMIA, meat products may not be sold under labeling that is “false or misleading,” and the secretary of Agriculture must approve labels through FSIS. The statute also contains an express preemption clause barring states from imposing labeling requirements “in addition to, or different than” federal standards.
Under prior federal policy, meat could be labeled “Product of USA” so long as it was processed in the U.S. even if the cattle were born and raised abroad. A stricter standard took effect this year, requiring that animals be born, raised, slaughtered and processed domestically to bear that claim. The meatpackers argue the new rule cannot retroactively govern conduct that complied with the earlier federal policy.
The case was docketed in the U.S. Court of Appeals for the 8th Circuit in May 2025, after the district court’s ruling. In support of the ranchers’ appeal, a bipartisan group of 11 state attorneys general—including Colorado, Kansas, Idaho, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming—filed an amicus brief urging the appellate court to uphold the ability of states to enforce truth-in-labeling laws against misleading marketing of foreign-sourced beef under the U.S. label.
Arguments before the 8th Circuit
Arguing for the meatpackers, attorney Aaron Van Oort framed the dispute as one about federal supremacy. He told the panel that Congress gave the secretary of Agriculture exclusive authority to set labeling standards and that states may not impose requirements “in addition to or different than” those federal standards.
Van Oort emphasized that at the time the labels were used, FSIS had adopted a policy allowing the “Product of USA” claim for meat processed domestically. If that standard was flawed, he argued, the proper avenue was an Administrative Procedure Act challenge against the secretary, not a state-law damages action against regulated entities.
Several judges questioned the extent of federal preemption. One judge posed hypotheticals about scenarios where a state might interpret a labeling standard differently from the federal government. Van Oort responded that once the secretary sets a standard under the FMIA, states may not contradict that standard by imposing separate requirements.
Van Oort also suggested that, because the companies relied on a federally approved standard, retroactive damages could be inconsistent with the statute’s structure.
Blair Dunn, representing the ranchers, argued that FSIS’s prior “policy book” was guidance rather than a regulation adopted through formal rulemaking and therefore should not carry a binding, preemptive effect.
Dunn emphasized that the FMIA requires labels to be both approved and not false or misleading, describing those as independent requirements. In his view, approval alone does not shield a label from scrutiny if it gives consumers a false impression about country of origin.
Judges pressed Dunn on whether allowing state-law claims risks creating inconsistent standards across the country. Dunn responded that the FMIA contemplates concurrent state enforcement of misbranding provisions and that Congress did not make the secretary the sole arbiter of what is misleading.
The appellate panel did not indicate when it will rule. Its decision could clarify how far federal labeling approvals shield companies from state-law claims and how courts interpret the FMIA’s preemption clause in disputes over country-of-origin labeling. — Charles Wallace, WLJ contributing editor
