Opinion
01 Civ. 6980 (WHP).
February 26, 2003
MEMORANDUM AND ORDER
Kraft Foods North America, Inc. ("Kraft") seeks declaratory and injunctive relief requiring defendants Rockland County Department of Weights and Measures and its Director, James Farkas (collectively, "Rockland County") to conduct their inspection practices in accord with federal laws governing labels on packaged foods shipped in interstate commerce. More specifically, Kraft alleges that Rockland County conducts food packaging inspections at retail stores in Rockland County in a manner which: (1) differs impermissibly from federal food labeling laws that expressly preempt conflicting state and local standards; (2) interferes with interstate commerce; and (3) violates the Due Process Clause of the United States Constitution.
Presently before this Court are dueling motions: Rockland County's "Motion to Dismiss or in the Alternative for Summary Judgment," ("R.C. Br.") and Kraft's "Cross-Motion for Summary Judgment" ("Kr. Opp.").
As a preliminary matter, Rockland County styles its motion as one for summary judgment. In determining whether to convert a Rule 12(b)(6) motion into one for summary judgment sua sponte, "[t]he essential inquiry is whether [plaintiff] should reasonably have recognized the possibility that the motion might be converted into one for summary judgment or [was] taken by surprise and deprived of a reasonable opportunity to meet facts outside the pleadings." In re G. A. Books, Inc., 770 F.2d 288, 295 (2d Cir. 1985); see also Kennedy v. Empire Blue Cross Blue Shield, 989 F.2d 588, 592 (2d Cir. 1993) (holding that there was no error in sua sponte conversion, and plaintiffs were not unfairly surprised, where defendant's motion papers sought dismissal on certain grounds, summary judgment was granted on those grounds, and plaintiffs had supplemented the record with exhibits). Rather than assert that Kraft's complaint is deficient, Rockland County instead argues that the substantive allegations of the Complaint lack merit. Moreover, Rockland County included discovery materials dehors the complaint to a declaration submitted in opposition to Kraft's summary judgment motion and in reply on its own motion ("R.C. Opp. and Reply"). (Carle Decl. ¶ 3, Ex. 1.)
Moreover, the parties completed discovery and the facts are not in dispute. They entered into a joint stipulation pursuant to Fed.R.Civ.P. Rule 26(f) ("Joint Stip."). Further, Rockland County did not respond to Kraft's Rule 56.1 statement. See Local Rule 56.1(b). Kraft's Rule 56.1 statement complies with Rule 56(e) of the Federal Rules of Civil Procedure as each statement of material fact is supported by citation to admissible evidence. Thus, pursuant to Local Rule 56.1(c), the Court accepts Kraft's Rule 56.1 statement as undisputed. See Holtz v. Rockefeller Co., 258 F.3d 62, 72 (2d Cir. 2001).
A determination that Rockland County's motion is one seeking summary judgment does not take Rockland County by surprise. Not only did its submission closely resemble one for summary judgment as opposed to a motion to dismiss, but Rockland County also supplemented the record with exhibits. Thus, Rockland County knew, or reasonably should have known, of the possibility that the motion would be construed as one for summary judgment. See Kennedy, 989 F.2d at 592. Accordingly, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, the Court will treat Rockland County's submission as one for summary judgment. As Kraft filed a "cross-motion" for summary judgment, both parties were afforded a reasonable opportunity to present material pertinent to Rockland County's motion for summary judgment. See Fed.R.Civ.P. Rule 12(b).
For the reasons stated below, Rockland County's motion for summary judgment is granted in part and denied in part, and Kraft's motion for summary judgment is granted in part and denied in part.
BACKGROUND
The undisputed facts are summarized as follows:
A. Rockland County's Inspection Practices
Rockland County inspectors conduct net weight inspections of food products at individual retail stores within Rockland County, where they select one or two packages of a product from a retail shelf and weigh them. (Joint Stip. ¶ 4.) Through its inspection practices, Rockland County requires packaged food products sold in the county to equal or exceed the net weight stated on the package label. (Pl.'s 56.1 Stmt. ¶ 5; Farkas Dep. at 20.) If the packages selected equal or exceed the labeled weight, the inspector returns the items to the shelf. (Joint Stip. ¶ 4.) The inspector also records the weight results in a "commodity report," and makes no further use of them. (Joint Stip. ¶ 4.)
However, if the packages tested weigh less than the labeled weight, every package of that item on the shelf ("the inspection lot") is subject to "on-site sampling." (Joint Stip. ¶ 4.) The "on-site sampling" protocol requires the inspector to weigh twelve packages or all packages on the shelf if there are fewer than twelve. (Joint Stip. ¶ 4.) Armed with those results, the inspector performs a mathematical calculation. If the resulting average weight of the sampled packages is below the label weight, the entire inspection lot is deemed misbranded and ordered "off sale," and a civil penalty is imposed on the retail store. Conversely, if the resulting average weight exceeds or is equal to the label weight, the data is recorded in a "commodity report," and the inspection is concluded. (Joint Stip. ¶ 4.)
Rockland County issues citations only to retail stores. (Joint Stip. ¶ 5.) The county has no procedure for notifying a packaged food product manufacturer, like Kraft, before issuing a citation. (Joint Stip. ¶ 5.) Moreover, Rockland County cites retailers without considering any production data from the manufacturer. (Joint Stip. ¶ 5; Pl.'s 56.1 ¶ 12; Farkas Dep. at 33.) While not fined directly, Kraft bears the financial cost because retailers pass on the fine and any other expenses associated with pulling Kraft's product from the shelves, including a "business interruption fee." (Pl.'s 56.1 Stmt. ¶ 17; Spence Decl. ¶ 12.)
During 2000 and 2001, Rockland County issued at least fifteen net weight citations against retailers for underweight Kraft products such as Oscar Meyer Beef Bologna and Oscar Meyer Cheese Dogs. (Spence Decl. ¶ 8, Ex. 1.) Each citation alleges that Kraft products were labeled improperly because they were underweight. (Spence Decl. Ex. 1.) Rockland County issued each citation based on the testing protocol set forth above. (Pl.'s 56.1 Stmt. ¶ 13; Spence Decl. ¶ 12.) In those instances where the manufacturing plant code information could be ascertained from the citation, Kraft's records reveal that the average weight of those production runs was at or above the weight stated on the package label. (Pl.'s 56.1 Stmt. ¶ 14; Spence Decl. ¶¶ 9-10.)
B. Kraft's Food Packaging Procedures
Kraft manufactures food products in production runs that last approximately six to eight hours and produce a stream of tens of thousands of individual food packages. (Joint Stip. ¶ 1.) Because of inherent variations in the manufacturing process, individual food packages in any production run fluctuate from slightly above the labeled weight to slightly below the labeled weight. (Joint Stip. ¶ 2.) Graphically, Kraft's production data depicts this variation in undulating waves throughout the course of an entire run. (Joint Stip. ¶ 2; Snee Decl. ¶ 7, Ex. 3.)
Before a production run, Kraft employees select a per package weight above the labeled net weight to serve as the target weight for that production run. The target weight is chosen on the basis of the expected variation in net weight common to that product and manufacturing machinery. (Pl.'s 56.1 ¶ 7; Spence Decl. ¶ 5.) Throughout each run, Kraft monitors the average net weight of food packages to ensure compliance with applicable federal laws and guidelines. (Pl.'s 56.1 ¶ 8; Spence Decl. ¶ 6.) Kraft boxes individual food packages into cartons as they come off the production line. With most products, each retail carton contains a dozen food packages that come off the line in consecutive order in less than a minute. (Joint Stip. ¶ 3.) Thus, while some packages at a single retail location may all be "underweight," packages sold at another retail store may all exceed the labeled net weight. (Snee Decl. ¶ 8; Farkas Dep. at 39-40.)
Kraft policy requires packages from each production run to be sampled statistically to ensure compliance with federal laws and guidelines. In general, these samples comprise at least fifty and sometimes over one hundred packages, drawn three to five at a time at least every 30 minutes throughout a production run. (Pl.'s 56.1 Stmt. ¶ 9; Spence Decl. ¶ 6.) At the end of the run, those samples are averaged to yield an average weight for the entire lot. If that sampled average weight is below the labeled package weight, Kraft does not distribute the product to retailers. (Pl.'s 56.1 Stmt. ¶ 10; Spence Decl. ¶ 7.)
Kraft advances three claims. First, Kraft alleges that Rockland County's net weight inspection practices violate the Supremacy Clause of the United States Constitution because they impermissibly differ from federal net weight labeling laws. (Compl. ¶¶ 43-46.) Second, Kraft alleges that those same inspection practices impose a negative effect on interstate commerce and thus violate the Commerce Clause of the United States Constitution. (Compl. ¶¶ 47-49.) Finally, Kraft contends that Rockland County violates the Due Process Clause of the United States Constitution by notifying and providing a hearing only to retailers, not manufacturers such as Kraft, when it issues a citation for underweight food packages. (Compl. ¶¶ 50-53.)
DISCUSSION
I. Summary Judgment Standard
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. See,e.g., Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970);Grady v. Affiliated Cent., Inc., 130 F.3d 553, 559 (2d Cir. 1997). In evaluating the record to determine whether there is a genuine issue as to any material fact, the "evidence of the nonmovant is to be believed and all justifiable inferences are to be drawn in his favor." Liberty Lobby, 477 U.S. at 255.
II. The Preemption Claim
Kraft alleges that federal law expressly preempts Rockland County's inspection practices because such practices differ from federal net weight labeling requirements. Rockland County argues that the county's net weight inspection practices are not preempted by federal law and are valid under the Supremacy Clause of the United States Constitution. U.S. Const. VI, cl. 2.
Kraft asserts that, through four federal statutes, "Congress has specifically mandated that state and local governments may not impose food package label requirements that are in conflict with, are not identical to, are different from or are in addition to those imposed by federal law." (Comp. ¶ 12.) Those four statutes governing net weight labeling requirements for food are: (i) the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 331(a), 343(e) (2003); (ii) the Federal Meat Inspection Act ("FMIA"), 21 U.S.C. §§ 607(b), 601(n)(5) (2003); (iii) the Poultry Products Inspection Act ("PPIA"), 21 U.S.C. §§ 458(a)(2), 453(h)(5) (2003); and (iv) the Fair Packaging Labeling Act ("FPLA"), 15 U.S.C. § 1453 (2003) (collectively, the "Federal Food Packaging Statutes"). Kraft specifically contends that Rockland County's inspection procedures, as implemented, conflict with the mandates of federal laws regulating food labeling by effectively imposing a minimum weight standard where federal law expressly permits reasonable weight variations in packaged foods. (Comp. ¶¶ 3-5, 11-28, 43-46.)
A. Doctrine of Preemption
The doctrine of preemption is based upon the Supremacy Clause, which "invalidates state laws that 'interfere with or are contrary to,' federal law." Hillsborough County v. Automated Medical Labs, Inc., 471 U.S. 707, 712 (1985) (quoting Gibbons v. Ogden, 22 U.S. 1, 9 Wheat (1824)). A federal statute or regulation may supersede a state law or regulation through either express or implied preemption. See Hillsborough County, 471 U.S. at 713 (stating that analysis of local ordinances under Supremacy Clause is also identical to that of state laws) (citations omitted); Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 415 (2d Cir. 2002). "Express preemption occurs to the extent that a federal statute expressly directs that state law be ousted to some degree from a certain field." Sprint Spectrum L.P., 283 F.3d at 415 (citing Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977)).
Absent express preemption, a state regulation may be implicitly preempted through either field preemption or conflict preemption.Gade v. Nat'l Solid Wastes Mgmt. Assoc., 505 U.S. 88, 98 (1992). Field preemption occurs "where the scheme of federal regulation is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) (citations omitted);Freeman v. Burlington Broadcasters, Inc., 204 F.3d 311, 320 (2d Cir. 2000). Conflict preemption occurs either "where it is impossible for a private party to comply with both state and federal requirements," Florida Lime Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963), or "where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995).
In analyzing a state regulation, the Court must "consider [the] relationship between state and federal laws as they are interpreted and applied, not merely as they are written." Jones v. Rath Packing Co., 430 U.S. 519, 526 (1977). Further, preemption is not to be lightly presumed. California Federal Savings Loan Assoc. v. Guerra, 479 U.S. 272, 281 (1987).
B. Rockland County's Inspection Practices
The Federal Food Packaging Statutes each contain a provision that explicitly preempts differing state regulations. See 21 U.S.C. § 343-1(2) (2003) (FDCA preemption); 21 U.S.C. § 678 (2003) (FMIA preemption); 21 U.S.C. § 467e (2003) (PPIA preemption); 15 U.S.C. § 1461 (2003) (FPLA preemption). The FDCA provides in pertinent part: "[n]o State or political subdivision of a State may directly or indirectly establish . . . any requirement for the labeling of food of the type required by section 343(c), 343(e) or 343(i)(2) of this title that is not identical to the requirement of such section." 21 U.S.C. § 343-1(2) (2003). The FPLA states that
it is the express intent of Congress to supersede any and all laws of the States or political subdivisions thereof insofar as they may now or hereafter provide for the labeling of the net quantity of contents of the package of any consumer commodity covered by this chapter which are less stringent than or require information different from the requirements of section 1453 of this title or regulations promulgated pursuant thereto.15 U.S.C. § 1461 (2003).
The FMIA provides that "[m]arking, labeling, packaging, or ingredient requirements in addition to, or different than, those made under this chapter may not be imposed by any State or Territory or the District of Columbia with respect to [articles subject to the FMIA]." 21 U.S.C. § 678 (2003). The FMIA also allows for concurrent state jurisdiction to enforce its requirements. See 21 U.S.C. § 678. However, such concurrent jurisdiction does not allow states to enact their own additional requirements. Nat'l Broiler Council v. Voss, 44 F.3d 740, 746 (9th Cir. 1994). The PPIA contains preemption and concurrent jurisdiction language nearly identical to that in the FMIA. See 21 U.S.C. § 467(e) (2003).
The Federal Food Packaging Statutes or the regulations promulgated thereunder all state that "[r]easonable variations caused by loss or gain of moisture during the course of good distribution practices or by unavoidable deviations in good manufacturing practices will be recognized." See, e.g., 21 U.S.C. § 343(e) (FDCA); 21 C.F.R. § 101.105(q) (FDCA and FPLA); 9 C.F.R. § 317.2(h)(2) (FMIA); 9 C.F.R. § 381.121(c)(6) (PPIA). The Supreme Court has held that the FDCA's weight variation regulations apply to the FPLA. See Jones v. Rath Packing Co., 430 U.S. 519, 534 (1977).
The USDA enforces the FMIA and PPIA, while the FDA enforces the FDCA and FPLA. See Grocery Manuf. of Am., Inc. v. Gerace, 755 F.2d 993, 997 (2d Cir. 1985). The USDA's Food Safety and Inspection Service ("FSIS"), and the National Institute of Standards and Technology regulate the testing of meat and poultry packages for compliance with the food packaging and labeling standards set forth in the Federal Food Packaging Statutes. See National Institute of Standards and Technology, Handbook 133 Checking the Net Contents of Packaged Goods (the "Handbook"), § 1.1 (4th ed. 2002); Food Safety Inspection Service, U.S. Dep't of Agriculture, Training Module on Net Weights, ("FSIS Training Module on Net Weights") 3 (Dec. 7, 1999) (stating the FSIS uses net weight compliance procedures contained in the Handbook); see also Office of Regulatory Affairs, Food Drug Admin., Compliance Policy Guides, Ch. 5, 557.250 (2d ed. 1995) (requiring FDA officials to review plant data when making dairy-related enforcement decisions if testing reveals products to be underweight by less than two percent). The FSIS net weight enforcement practices state that "when packers produce standard weight packages or containers, they target the average fill of these packages or containers to equal or exceed the predetermined weight declared on the label." FSIS Training Module on Net Weights at 4. The USDA also advises food manufacturers to maintain records of net weight and tare measurements of production lots "in order to controvert a potential finding made outside of the plant." 55 Fed. Reg. 49826, 49826 (Nov. 30, 1999). Moreover, the USDA notes that:
The [plant] data on specific lots may well substantiate compliance with net weight requirements. On the other hand, if no such data exists, then the State or local weights and measures authority as well as Federal authorities could take appropriate regulatory enforcement action.55 Fed. Reg. 49826, 49830. Thus, federal regulations direct manufacturers to aim to have the average weight of the packages of a production lot equal the weight stated on the label. Implicitly, these regulations acknowledge that some packages may contain less than the weight stated on the label.
The Handbook states that "an effective testing program" will test at the point of pack, at the wholesale and retail levels.Handbook § 1.1. It adds:
Generally, retail package testing is not conducive to checking large quantities of individual products of any single production lot. Therefore, at the very least, follow-up inspections of a particular brand or lot code number at a number of retail and wholesale outlets, and ultimately at the point of pack, are extremely important aspects in any package-checking scheme.Handbook, § 1.1. With respect to packaging requirements, the Handbook notes "[t]he net quantity of content statement must be 'accurate,' but reasonable variations are permitted. . . . The limits for acceptable variation are based on current good manufacturing practices in the weighing, measuring, and packaging process." Handbook, § 1.2. Finally, the Handbook states that "[p]lus or minus variations from the declared net weight . . . are permitted when they are caused by unavoidable variations in weighing . . . the contents of individual packages that occur in current good manufacturing practice." Handbook § 1.2.
Rockland County conducts its inspections to enforce New York Agriculture and Markets Law § 194, which prohibits retailers from offering for sale falsely labeled packages. N.Y. Agriculture and Markets Law § 194 (McKinney's 2002). Rockland County's method of enforcing New York's state food labeling regulations is preempted by the Federal Food Packaging Statutes. In practice, Rockland County's inspectors impose a standard that is "different from" that required under federal law because their inspection practices: (1) fail to permit "reasonable variations" in package weight based on current good manufacturing practices in the weighing, measuring and packaging process; and (2) take into account package weight solely at the retail level.
Rockland County effectively imposes a minimum weight requirement by failing to allow for "reasonable variation" in the weight of food packages in relation to the net weight statement on the label. In other words, requiring an inspection lot of approximately twelve items to have, at a minimum, the weight stated on the package does not allow for reasonable variations below the stated package weight, as mandated under the Federal Food Packaging Regulations.
Additionally, measuring packages solely at the retail level does not comply with the federal inspection practice of also testing at the point of pack and at wholesale sites. Handbook § 1.1. Specifically, the Handbook states that retail, small-lot inspections at a retail store are "not conducive to checking large quantities of individual products of any single production lot. Therefore, at the very least, follow-up inspections of a particular brand or lot code number at a number of retail and wholesale outlets, and ultimately the point of pack, are extremely important aspects in any package-checking scheme." Handbook § 1.1. Rockland County does not conduct follow-up inspections at any other retail outlet or at wholesale centers. Nor does Rockland County consider the weight at the point of pack, which is information readily available from Kraft. (Joint Stip. ¶ 5; Pl.'s 56.1 Stmt. ¶ 15; Spence Decl. ¶ 10.) Moreover, a carton of twelve packages represents a fraction of a minute of a six to eight hour production run during which time the net weight of packaged food fluctuates in undulating waves. (Joint Stip. ¶¶ 1, 2.)
Rockland County's method of using a single store sample conflicts with USDA practices enunciated in the Handbook and statistically fails to account for fluctuations in package weight during the manufacturing process. Handbook § 1.1; (Snee Decl. ¶ 5.) By considering only limited information gleaned from retail inspections, Rockland County effectively ignores the Federal Food Packaging Statutes which permit variations across the production lot. Cf. Jones, 430 U.S. at 532 n. 19 (stating that states may use valid statistical sampling techniques to police compliance with federal and state labeling laws) (emphasis added).
In an analogous case, the Supreme Court compared California and federal standards concerning accuracy for net weight labeling.Jones v. Rath Packing Co., 430 U.S. 528-32 (1977). In effect, California's inspection sampling practices implicitly allowed slight variations due to the manufacturing process, but did not allow for weight loss resulting from moisture loss during distribution. Jones, 430 U.S. at 531. This practice conflicted with the USDA's interpretation of the FMIA to permit variations due to moisture loss, and accordingly the Court held that the FMIA explicitly preempted the California regulations. Jones, 40 U.S. at 529, 532. Like the California regulations in Jones, Rockland County's method of enforcing the New York Agriculture and Markets law is preempted by the Federal Food Packaging Statutes because its inspection practices and policies do not allow for reasonable variations from the label's net weight statement based on current good manufacturing practices in the weighing, measuring and packing process.
Accordingly, Rockland County's net weight inspection practices impermissibly "differ from" and are "contrary to" the Federal Food Packaging Statutes and are therefore preempted by such federal laws. See Jones, 430 U.S. at 531-32 (finding state labeling law requiring accurate net weight expressly preempted where it differed from federal labeling law allowing variations);Hillsborough County v. Automated Medical Labs, Inc., 471 U.S. 707, 712 (1985) (Supremacy Clause "invalidates state laws that 'interfere with or are contrary to' federal law") (quotingGibbons v. Ogden, 22 U.S. 1, 9 Wheat (1824)); see also Grocery Manuf. of Am., Inc. v. Gerace, 755 F.2d 993, 1002-03 (2d Cir. 1985) (New York labeling regulation regarding lettering size preempted by the FMIA and PPIA); Nat'l Broiler Council v. Voss, 44 F.3d 740, 746 (9th Cir. 1994) (finding preemption under FMIA and noting that states may enforce the federal labeling laws, but that the USDA did not grant states authority to enact their own, additional requirements); Cook Family Foods, Ltd. v. Voss, 781 F. Supp. 1458, 1465-68 (C.D. Cal. 1991) (state law preempted by FMIA where state field inspectors used different, subjective procedures to test net weight of packaged goods); Northwestern Selecta, Inc. v. Munoz, 106 F. Supp. 2d 223, 231 (D. P.R. 2000) (Puerto Rico Department of Agriculture regulation preempted where it differed from the PPIA).
Therefore, Kraft's motion for summary judgment on its preemption claim is granted and correspondingly Rockland County's motion for summary judgment on that claim is denied.
III. The Interstate Commerce Claim
In Count II of its Complaint, Kraft alleges that Rockland County's inspection practices have a disparate effect on interstate commerce and unreasonably and unduly burden interstate commerce. (Comp. ¶¶ 40-42, 47-49.) Specifically, Kraft alleges that defendants' net weight label enforcement practices create "substantial burdens that are not outweighed by any local interest sufficient to justify the burden on Kraft." (Comp. ¶ 41.) Kraft additionally avers that in order to comply with Rockland County's net weight labeling requirements, it would be forced to alter its nationwide packing system which already meets federal requirements, and instead create a special packing system solely for products distributed in Rockland County. (Comp. ¶¶ 40-42; Kr. Opp. at 21.) In contrast, Rockland County contends that its inspection practices are exempt from challenge under the Commerce Clause.
A. Commerce Clause
The Commerce Clause of the United States Constitution, Const. Art. 1 § 8 cl. 3, authorizes Congress "[t]o regulate commerce . . . among the several states," and, in its negative context, the Dormant Commerce Clause limits the regulatory authority of states. See United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 261 F.3d 245, 253 (2d Cir. 2001). Notwithstanding that limiting power, Congress did not intend to preclude states from regulating matters related to the health, life and safety of their citizens. Head v. New Mexico Bd. of Examiners in Optometry, 374 U.S. 424, 428 (1963).
In analyzing whether local or state action violates the Dormant Commerce Clause, the Court must initially determine whether the state or local ordinance "regulates even-handedly with only incidental effects on interstate commerce or discriminates against interstate commerce either facially or in practical effect." Automated Salvage, 155 F.3d at 74 (quoting Hughes v. Oklahoma, 441 U.S. 322, 336 (1979)). Discrimination against interstate commerce exists where there is "differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter." Oregon Waste Sys., Inc. v. Dep't of Environmental Quality, 511 U.S. 93, 99 (1994).
Nondiscriminatory regulations regulate evenhandedly with only incidental effects on interstate commerce. Peake Excavating Inc. v. Town Board of the Town of Hancock, 93 F.3d 68, 74 (2d Cir. 1996). "Nondiscriminatory regulations that have only incidental effect on interstate commerce are valid 'unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.'" Automated Salvage, 155 F.3d at 74 (quoting Pike v. Bruce Church, 397 U.S. 137, 142 (1970)); see Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 471 (1981). The Second Circuit defines "incidental effect" as "the burdens on interstate commerce that exceed the burdens on intrastate commerce. . . . The fact that [the regulation] may otherwise affect commerce is not sufficient." Automated Salvage, 155 F.3d at 74, (citing USA Recycling v. Town of Babylon, 66 F.3d 1272, 1287 (2d Cir. 1995)). Accordingly, the minimum showing required to succeed in a Dormant Commerce Clause challenge to a state regulation is that the regulation has a disparate impact on interstate commerce. See id.
Thus, where a state statute or regulation is nondiscriminatory and has a disparate impact on interstate commerce, the key inquiry is whether: (1) the state's interest is legitimate; and (2) the burden on interstate commerce clearly exceeds the putative local benefits. Wyoming v. Oklahoma, 502 U.S. 437 (1992); Automated Salvage, 155 F.3d at 74.
B. Undue Burden
Kraft alleges that Rockland County's net weight labeling enforcement policies violate the Dormant Commerce Clause because such policies unduly burden interstate commerce. (Kr. Opp. at 20-21.) Kraft does not allege, nor could it, that Rockland County's policies are discriminatory, either facially or in effect. See Oregon Waste Systems, 511 U.S. at 99; Grocery Mfrs. of Am., Inc. v. Gerace, 755 F.2d 993, 1003 (2d Cir. 1985). Accordingly, this Court will analyze Rockland County's net weight enforcement practices as nondiscriminatory.
Rockland County's nondiscriminatory enforcement practices have a disparate impact on interstate commerce, as such practices impose burdens on interstate commerce exceeding the burdens on intrastate commerce. See Brown Williamson Tobacco Corp. v. Pataki, No. 01-7806, 01-7813, 2003 WL 303038, at *7 (2d Cir. Feb. 13, 2003); Automated Salvage, 155 F.3d at 74. As a national manufacturer, Kraft packages and labels various food items in lots, which are then shipped across the United States. Rockland County requires packaged food items to have an accurate, not average, net weight in relation to the labeled weight, as federal law allows. (Pl.'s 56.1 Stmt. ¶ 5; Farkas Dep. at 20.) By subjecting Kraft to a different, heightened standard than that which federal law mandates, Rockland County impedes Kraft's ability as a national manufacturer to package and sell goods in interstate commerce. In order to comply with Rockland County's minimum weight rule, a national manufacturer such as Kraft would have to specially segregate and separately label packages being distributed in Rockland County, as opposed to those distributed nationally. (Kr. Opp. at 21; See Pl.'s 56.1 Stmt. ¶ 18; Snee Decl. ¶ 5.) Manufacturers distributing packaged food solely within New York would not have to make such an onerous adjustment. Thus, Rockland County's regulation has an "incidental effect" on interstate commerce as the burden exceeds that on intrastate commerce.
Accordingly, in order to demonstrate that its regulations do not offend the Commerce Clause, Rockland County must establish that its inspection practices promote a "legitimate local public interest." Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970);see also United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 261 F.3d 245, 256 (2d Cir. 2001). If Rockland County makes such a showing, its regulations will be upheld unless the burden on interstate commerce is clearly excessive in relation to the local benefit. Pike, 397 U.S. at 142.
Rockland County asserts that its inspection practices promote the legitimate state interest of ensuring that the "federal standard is maintained throughout the distribution and retail process." (R.C. Br. at 9.) More specifically, Rockland County maintains that the local benefit accorded is "protecting consumers from mislabeled products and allowing consumers to make value comparisons." (R.C. Opp. and Reply at 8.) In practice, however, Rockland County's regulations have "a far different impact" than upholding the federal standards. Pike, 397 U.S. at 144. In practice, Rockland County imposes a minimum weight standard that is impermissibly different from the federal regulations that require an average weight standard. Thus, Rockland County fails to establish a legitimate state purpose.See, e.g., Grocery Manuf. of Am., Inc., 755 F.2d at 1003 (stating that a finding that state regulations were preempted made "it unnecessary for us to determine whether [those] provisions are invalid under the Commerce Clause as well").
Even if Rockland County could show a legitimate state purpose in imposing such an impermissibly different standard, Rockland County's regulations unduly burden interstate commerce in relation to the putative local benefit. See Pike, 397 U.S. at 142; Brown Williamson Tobacco Corp., 2003 WL 303038, at *7. As noted, for Kraft to comply with Rockland County's minimum weight rule it would have to "segregate and label differently those products being distributed in Rockland County from those products being distributed in the rest of the country." (Kr. Opp. at 21; Pl.'s 56.1 Stmt. ¶ 18; Snee Decl. ¶ 5.) Such a process, if possible, would be time consuming and costly to a national manufacturer whose packaging and labeling systems are designed to comply with federal laws. There is no doubt that Rockland County's inspection practices place a heavy burden on interstate commerce without equally weighty local benefits. Accordingly, Kraft's motion for summary judgment on its interstate commerce claim is granted, and Rockland County's motion for summary judgment on this claim is denied.
IV. The Procedural Due Process Claim
Kraft's third claim alleges that Rockland County's inspection practices violate procedural due process by failing to provide Kraft with adequate notice and opportunity to be heard prior to the deprivation of a property interest. (Comp. ¶¶ 51-52.) Namely, Kraft alleges that Rockland County is constitutionally required to timely notify Kraft when it issues a citation and fines the retailer who shelves an allegedly underweight product manufactured by Kraft. (Comp. ¶¶ 37-39, 51-53.)
A. Due Process Clause
The Due Process Clause of the Fifth and Fourteenth Amendments to the United States Constitution guarantee that neither the states nor the federal government may deprive a person of liberty or property without due process. U.S. Const. amend. V, XIV; Weinstein v. Albright, 261 F.3d 127, 133 (2d Cir. 2001). Generally, procedural due process requires that "individuals must receive notice and an opportunity to be heard before the Government deprives them of property." U.S. v. James Daniel Good Real Property, 510 U.S. 43, 48 (1993); see Matthews v. Eldridge, 424 U.S. 319, 333 (1976); Mullane v. Central Hanover Bank Trust Co., 339 U.S. 306, 314 (1950). In order to prevail in such an action, a plaintiff must: (1) "identify a property right," (2) "show that the [Government] has deprived him of that right," and (3) "show that the deprivation was effected without due process." Local 342 v. Town Bd. of Huntington, 31 F.3d 1191, 1194 (2d Cir. 1994) (quoting Mehta v. Surles, 905 F.2d 595, 598 (2d Cir. 1990) (per curiam)); Irwin v. City of New York, 902 F. Supp. 442, 446-47 (S.D.N.Y. 1995).
To determine what type of due process is required, courts consider three additional factors: (1) the private interest affected by official action; (2) the risk of erroneous deprivation of such interests through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the Government's interest, including the function involved and the burdens of an alternative procedural requirement. Matthews, 424 U.S. at 335.
B. Due Process Analysis
Kraft cannot show that Rockland County deprived it of a property interest. Kraft claims it has incurred and will continue to incur financial, business and reputational losses due to Rockland County's practice of providing notice of a citation and subsequent hearing to only the retailer it directly fines rather than to the third-party manufacturer of the product. (Comp. ¶ 39; Pl.'s 56.1 Stmt. ¶ 16; Spence Decl. ¶ 12.) However, it is undisputed that Rockland County's citations and fines are issued directly to the retailer who shelves underweight items, and that retailer immediately receives notice of a hearing, stating where and when it may dispute the citation. (Comp. ¶ 29; Joint Stip. Facts ¶ 5.) Such notice satisfies due process. See Chalfy v. Turoff, 804 F.2d 20, 22 (2d Cir. 1986) (affirming finding of adequate notice where summons contained time and place of hearing to contest fine). The fact that the retailer may ultimately pass along this fine and charge a "business interruption fee" to Kraft is a separate transaction between two private, non-Governmental entities. (Comp. ¶ 39.) Kraft offers no legal authority for its assertion that Rockland County is constitutionally required to provide notice to such a non-party. "The proper inquiry is whether the state acted reasonably in selecting means likely to inform persons affected, not whether each property owner actually received notice." Weigner v. City of New York, 852 F.2d 646, 649 (2d Cir. 1988) (citing Mullane, 339 U.S. at 315). Indeed, to fashion such a requirement would impermissibly extend the limits of procedural due process. Accordingly, Kraft's motion for summary judgment on its due process claim is denied and Rockland County's motion for summary judgment on this claim is granted.
V. CONCLUSION
Kraft's motion for summary judgment is granted on its preemption and interstate commerce claims. Rockland County's motion for summary judgment dismissing Kraft's procedural due process claim is granted. The parties' requests for attorneys' fees are denied.
Accordingly, Rockland County is permanently enjoined from conducting food packaging and labeling inspections that do not comply in practice with federal regulations, including, but not limited to, the requirement that it allow for reasonable variations in the net weight of packages based on current good manufacturing practices in the weighing, measuring and packaging process. The Clerk of the Court is directed to close this case.
SO ORDERED: