Pasta Case Reaches Oral Argument at CAFC, Where Parties Argue Labeling

The U.S. and an Italian pasta exporter argued before the U.S. Court of Appeals for the Federal Circuit on Nov. 8 over whether the Commerce Department should have distinguished pasta grades using the protein contents reported on the nutritional information that appears on the pasta’s packages or using companies’ internal information (La Molisana v. United States, Fed. Cir. # 23-2060).

Alternatively, the department should have conducted a conversion on the nutritional labels, the exporter said.

David Craven, attorney for exporter La Molisana, said the internal information should be used because it is more accurate, and it’s important in model match decisions to “avoid a comparison [between] Rolls Royces and Toyotas.”

The exporter unsuccessfully argued before the Court of International Trade that the Commerce Department should have adjusted its threshold when differentiating between pasta types in its 2018-19 antidumping duty administrative review on the products, saying that evidence indicates the department’s standards for “premium” and “standard” pasta are wrong (see 2311090056). It claimed that FDA's nutrition rounding rules and the different nitrogen content multipliers in Italy and the U.S. “mask the true protein content in pasta.”

“There’s a significant difference, and it’s commercially significant, between the U.S. standard” and the Italian standard, Craven said.

“Counsel, this methodology has been in place for at least 12 years,” Judge Alan Lourie said. “Why should we overturn all that just because it doesn’t fit your client’s needs?”

Judge Kara Stoll pointed out the standard of review for their decision is whether Commerce’s decision is supported by substantial evidence. She said that they would need a compelling reason to require the department to switch models.

DOJ attorney Sosun Bae said that there wasn’t any such reason. Commerce found, and the trade court confirmed, that any differences between Italian and U.S. pasta caused by the FDA and nitrogen content multipliers aren’t commercially significant, she said. Both end-use consumers and intermediate customers rely on protein content as reported on products’ packages, which is the information Commerce relies on in differentiating its pasta qualities, she explained.

“Commerce is trusting that the nutrition label data is being provided accurately by the respondents,” she said.

She added that in 2009 reviews, Commerce switched from using company-specific information to nutrition label information because it found that the company-specific data resulted in inconsistencies.

Based on Loper Bright, the appeals court has a “lot of discretion” in considering this case, Craven argued.

“Remember, protein content is not what the customer in the U.S. is looking for,” he said. “Because, ultimately, yes, the transparency is there from what’s on the package label, but ultimately, that’s not really why it’s standard or special.”