lic beverages.
In Brown-Forman Distillers Corp. v. Matthews , the plaintiffs brought a declaratory judgment that the FDA did not have jurisdiction to regulate the labeling of alcoholic beverages. The plaintiffs in this action were eight distillers, one winemaker, the Distilled Spirits Council of the United States (approximately 95% of all United States distillers), and the National Association of Alcoholic Beverage Importers. Although the industry was successful in getting the BATF to rescind the proposal for ingredient labeling, when the FDA attempted to exert its control and require this labeling the industry responded strongly with this action. When the Court in Brown-Forman Distillers considered the issue of jurisdiction they went back to the legislative history of the FD&C Act of 1938 to determine if the word “food” was supposed to include alcoholic beverages. Although there was no discussion directly on point as to how the FD&C Act was to effect the 1935 Act, there was an interesting question that was asked by Congressman Virgil Chapman during the hearings. In this question he made clear that he proposed to amend the bill to “include whiskey and require adequate labeling that would disclose the various ingredients...” The Court properly concluded that this question indicated that Congress did not think that the definition of food, as it was written in the Act, included alcoholic beverages. The House Committee’s report indicated that the definition of food was no more than a clarification of the 1906 Act. It is clear that Congress intended for the BATF to have authority over labeling. The Court next considered the issue of joint jurisdiction finding that Congress intended to place exclusive jurisdiction with the BATF through the 1935 Act. The FD&C Act’s adulteration provisions are the only FDA regulations that still apply to alcoholic beverages. The alcohol industry had escaped the threat of ingredient labeling for the time being.
In 1979, the BATF tried once again to propose regulations of ingredient labeling in alcoholic beverages. On June 13, 1980 a final rule was promulgated which required ingredient disclosure on labels of wine, distilled spirits, and malt beverages. This rule had an exception or a way out for alcoholic beverage manufacturers. The manufacturer could elect to make the ingredient label available upon request as long as the label includes the full information of where to obtain the ingredient label. Consumer advocates got ingredient labeling and the industry still had the flexibility to provide a less expensive method of supplying this information. The BATF did require mandatory labeling of FD&C Yellow No. 5 because of the health problems associated with this substance. In preparing for issuing of these new regulations, BATF did considerable research including hiring a private consulting firm to conduct a cost-benefit analysis. The BDM Corporation study emphasized that depending on the assumptions that were used the cost of new labels ranged from $12 million to $150 million. In addition, the study reported that adverse effects were not limited to allergic reactions so the health costs that would be saved would be hard to calculate. The study concluded that ingredient labeling would be of no real value to the consumer.
Once again the BATF did not go through with the regulation, on May 4, 1981 the notice was published announcing the intent to rescind the prior regulation. The reasons for this were as follows: (1) increased cost to the consumer and a burden on the industry that was outweighed by the possible benefit, (2) ingredient labeling would not provide significant additional benefits to the consumer. This action resulted in litigation yet again. The Center for Science in the Public Interest and two individual plaintiffs brought suit claiming that the Department of Treasury (the BATF) had violated Federal Alcohol Administration Act and the Administrative Procedure Act by rescinding the regulation. The wine industry submitted an amicus curiae brief in support of the government’s rescission. The C