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Date: Thu, 29 Aug 96 13:54:46 EDT
From: Peter Montague <>
Subject: From Richard Grossman
To: (Corporations Group)

Hello Corporate Ponderers--
The following missive was sent to me by Richard Grossman, asking to have it sent to the list.--Peter Montague

Richard L. Grossman
15 August 1996

Interested parties
Burlington Free Press article 8/9/96 (attached below): August 8th decision of the US Court of Appeals, second circuit, International Dairy Foods Association et al v. Attorney General of Vermont, on rBST labelling

In April, 1994, the State of Vermont enacted a law requiring products containing rBST to be labeled. [rBST is a genetically-engineered "bovine growth hormone" sold by Monsanto to dairy farmers, who inject it into their cows to increase milk production. Possible changes in the milk itself, and the potential human health consequences of such changes, have been the subject of intense national debate for about 3 years.--P.M.] That same month, The International Dairy Foods Assn, The Milk Industry Foundation, The International Ice Cream Association, The National Cheese Institute; The Grocery Manufacturers of America, Inc., and The National Food Processors Association -- all trade, lobbying, promotional and lobbying corporations -- filed suit asserting that the Vermont statute was unconstitutional.

They were joined by the Monsanto Corporation as Friend Of The Court.

In June, 1995, these groups moved for preliminary injunctive relief to prevent enforcement of the law. They alleged that the law violated their First Amendment rights, and violated the commerce clause of the US Constitution. After an extensive hearing, Judge Murtha of the United States District court for the District of Vermont denied the motion for injunctive relief.

On 8 August, a panel for the 2nd US Circuit Court of Appeals, by a vote of 2-1, directed District Court Judge Murtha to issue a preliminary injunction blocking Vermont's rBST labeling law, on the grounds that this law might be found unconstitutional when the full trial is held. Judges Altimari and McLaughlin were in the majority. Judge Leval dissented, and wrote a separate opinion.

The matter of the commerce clause was not addressed. The majority wrote (p. 6) "Because the statute at issue requires appellants to make an involuntary statement whenever they offer their products for sale, we find that the statute causes the dairy manufacturers irreparable harm... The wrong done by the labeling law to the dairy manufacturers' constitutional right not to speak is a serious one that was not given proper weight by the district court." (p. 9) "Because the statute at hand unquestionably implicates the dairy manufacturers' speech rights, we reject the district court's conclusion that the disclosure compelled by [the Vermont statute] is not a 'loss of First Amendment freedoms,'"

Judge Leval, in his dissent, wrote: (p. 16): "The question is simply whether the First Amendment prohibits government from requiring disclosure of truthful relevant information to consumers. In my view, the interest of the milk producers has little entitlement to protection under the First Amendment. The caselaw that has developed under the doctrine of commercial free speech has repeatedly emphasized that the primary function of the First Amendment in its application to commercial speech is to advance truthful disclosure -- the very interest that the milk producers seek to undermine."

my comments: We should be quite clear that this case is not about whether business corporations and their trade/propaganda/lobbying front corporations should have First Amendment rights. Both the court decision and the dissenting opinion assume corporations have these rights. Accordingly, both focus on recent cases via which federal courts have been laying out the so-called "commercial free speech" and "negative free speech" rights of corporations, and on whether in this instance the current legal doctrines on corporate free speech apply.

The Circuit Court trial may find for the State of Vermont, or it may find for the corporations. Either way, the matter of corporations having First Amendment rights will not be addressed (unless the State of Vermont raises this question explicitly at the trial, or unless somehow it is injected by an outside force). If the State of Vermont appeals this 2nd Circuit decision ordering an injunction to prevent the State from enforcing the law, that appeal will be decided on the narrow grounds defined by this 2nd Circuit decision.

Let us remember that the Vermont statute does not ban rBST products from being produced in the state, or being sold in the state. This controversy revolves around "information," and "labeling." It is not about the authority of the people of Vermont to define what takes place within their borders; it is not about the authority of the people -- the human beings -- of Vermont to prescribe what may or may not go into their food.

Accordingly, much energy and effort could be expended by the good citizens of Vermont, and by the state's constitutional officers, appealing this decision all the way to the Supreme Court, and even if the State wins,

  1. The matter of whether corporations should have any First Amendment rights will not have been raised and addressed;

  2. he question of the right and ability of states to define corporations -- and to prohibit certain products and industrial processes and investments and sitings -- will similarly not have been raised and addressed. (And don't forget, the whole Commerce Clause business has been held in abeyance, and lurks.)

This matter, from the beginning, has been wholly within the regulatory realm... which as we know concedes enormous rights and powers including Constitutional protections) to artificial entities which are today's giant corporations.

What is needed is for the State of Vermont to assert its rightful authority to define the circumstances under which corporations will be permitted to do business within its borders, and to define said corporations themselves.

Constitutional rights are intended for human persons, not artificial entities. The Supreme Court in 1886 declared corporations to be persons for the purpose of the 14th Amendment, and that decision spread over to the 5th Amendment, giving courts ample grounds to expand the privileges and immunities of corporations against the public will. It is only since 1960s that federal courts began to open to corporations additional Bill of Rights protections: "First Amendment guarantees of political speech, commercial speech and negative free speech rights; 4th Amendment safeguards against unreasonable regulatory searches; 5th Amendment double jeopardy and liberty rights; and 6th and 7th Amendment entitlements to trial by jury." [see Carl J. Mayer, "Personalizing the Impersonal: Corporations and the Bill of Rights," Hastings Law Journal, March 1990]

The corporate lawyers and majority opinion federal judges in this case reveal the reality of today's corporate/Constitutional law... that our courts have been granting more and more rights to corporations, disempowering people and communities... with the idea of corporate personhood being treated as unassailable. It is time for us to challenge and turn back this fundamental direction of the courts.

Important as this specific corporate genetic intrusion into our communities is, I believe that the power and authority issues involved in this case transcend bovine growth hormone. If we do not redefine corporations, and redefine ourselves, we will be struggling against every corporate genetic intrusion one-at-a- time, just as we have been struggling against every corporate poison, dump, and lethal product one-at-a-time.

I think it would be fruitful to use this matter to organize and educate regarding: who is in charge, we the people or the corporations? But to do so will require recasting the bedrock issues, reframing the context well beyond regulation, and fashioning new goals which are clearly about establishing the authority of the people via our communities and our states, to define what corporations are and what corporations do.

I would therefore suggest that the good citizens of Vermont (and elsewhere) who want to use this controversy to educate, agitate and organize around should take sometime to think through framework, goals, political arenas of action, strategies and tactics before rushing into action. --R.G.


Newspaper article that appeared in:

The Burlington Free Press
Friday, August 9, 1996

Court reverses BST law
Dairy-product labeling rules in doubt

By Stacey Chase
Free Press Staff Writer

Vermont's first-in-the-nation dairy hormone labeling law was effectively struck down Thursday by a New York federal appeals court that said "the statute is likely to be held unconstitutional."

The decision is the latest development in a long standing battle over the controversial growth hormone bovine somatotropin, also know as BST, rBST or BGH.

"At this point, it is a complete vindication of our position that because rBST has no health or safety consideration there IS no valid basis for labeling," said Steven Rosenbaum, a Washington, D.C., attorney for the dairy groups that sued to block the law.

"For the indefinite future it has been struck down."

A panel for the 2nd U.S. Circuit Court of Appeals in New York reversed an earlier decision by U.S. District Court Judge J. Garvan Murtha that refused to block implementation of the law. The court Thursday instructed Murtha to issue a preliminary injunction.

The state was cautious in its response.

"We need to review the decision and make a determination on how we're going to proceed," said Assistant Attorney General Julie Brill. She decline to discuss the state's options.

Vermont's BST labeling law took effect September 12. Under the law, major retailers must display signs near their dairy cases that explain the labeling options for telling consumers which products are made, or might have been made, with milk from cows treated with BST. One method of labeling is a blue dot sticker on individual products.

The signs also say the federal Food and Drug Administration has determined there is no significant difference between milk from cows treated with BST and milk from untreated cows.

Opponents of BST worry it poses human health risks and is harmful to cows. Supporters say it is safe and is just another farm management tool.

BST is a genetically engineered protein that duplicates a natural hormone. It increases milk production in dairy cows by an average of 15 percent. The nomenclature "rBST" refers to recombinant BST, to distinguish the artificial hormone from the natural one.

The International Dairy Foods Association and Grocery Manufacturers of America are two of a number of groups based in Washington, D.C., that have jointly sued to block the labeling law.

The lawsuit is not yet scheduled to be heard. The preliminary injunction stay in effect until a decision is made on the merits of the suit.

"I wasn't surprised," state Agriculture Commissioner Leon Graves said of the ruling. "It reinforces what I believe is the appropriate way to give consumers information, which is to provide an rBST voluntary labeling scenario."

Most Vermont retail grocers were pleased.

"It is clear form the past year that the BST law is difficult to maintain and has been confusing to many consumers," said Jim Harrison, president of the Vermont Grocers' Association in Rutland.

"Consumers still have the ability to vote with their pocketbooks, and those companies that want to voluntarily reveal that information can reveal that."

Harrision added he is waiting for direction from the state before telling member retailers it is OK to remove the signs. The Vermont Grocers' Association is a trade group representing about 800 retail food stores.

One shopper at the Onion River Cooperative in Burlington had a different view.

"I think it's terrible it has been repealed. I don't shop in stores that don't have blue labels," said Dorothy Tod of Warren, who buys only BST-free products. "I've seen a number of supermarkets in direct violation of the law, and I think it's disgusting."

St. Albans dairy farmer Claude Bourbeau says he's been worried all along that the blue dot labeling would raise a red flag with consumers.

"I've been concerned that this would concern the consumer about the wholesomeness and quality of milk," said Bourbeau who is on the board of directors of St. Albans Cooperative Creamery, which prohibits the use of BST.

"Personally, I always said the less noise we made about it the better off we would be. I am relieved that maybe now this will go away."

In its lawsuit, the dairy manufacturers argue the Vermont law violates the First Amendment and the commerce clause of the U.S. Constitution because it restricts business among states.

The federal appeals court granted the preliminary injunction based on First Amendment grounds; it did not address the claims pertaining to the interstate commerce clause.

"The First Amendment protects freedom of speech," Rosenbaum said. "Freedom of speech encompasses the right to speak when you want to and the right NOT to speak when you don't want to... which is called 'compelled speech.'

"The state of Vermont was compelling manufacturers to speak, to reveal whether their products came from rBST-treated cows," he explained.

The state argued consumers have a right to the labeling information.

"We said that consumers overwhelmingly want to know whether the cow was treated with rBST," Brill said. "The consumers' interest was sufficient to outweigh any First Amendment issue the manufacturers had in not disclosing that information."

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