Insights and Analysis
AI-washing – when AI hype becomes a litigation risk
A federal district court in the Western District of Texas granted a preliminary injunction temporarily halting enforcement of one section of Texas SB 25, which requires foods containing any of 44 listed ingredients to display the following warning statement: “WARNING: This product contains an ingredient that is not recommended for human consumption by the appropriate authority in Australia, Canada, the European Union, or the United Kingdom.” The warning requirement applies to food product labels developed or copyrighted on or after January 1, 2027.1 The court issued the preliminary injunction after finding that the plaintiff food and beverage trade associations are likely to succeed on their claim that the warning requirement violates the First Amendment by unconstitutionally compelling speech.
Overview of Texas SB 25 Litigation
In December 2025, a group of food and beverage trade associations – specifically, American Beverage Association; Consumer Brands Association; National Confectioners Association; and FMI, the Food Industry Association – filed suit against Texas Attorney General Ken Paxton, challenging the constitutionality of Section 9 of Texas SB 25, the warning requirement for food labels.2 Plaintiffs alleged that Section 9: (1) violates the First Amendment by compelling businesses to convey government-scripted messages that are inaccurate and misleading; (2) is preempted by federal law, as the U.S. Food and Drug Administration (FDA) already regulates the same ingredients that Section 9 targets; (3) is unconstitutionally vague under the Fourteenth Amendment because its preemption provision fails to define key terms and thus businesses cannot know whether their products fall within its scope; and (4) violates the dormant Commerce Clause by forcing out-of-state businesses to change their products or labels to comply with Texas's unique rules.
Plaintiffs moved for a preliminary injunction, which requires consideration of: (1) likelihood of success on the merits, (2) irreparable harm absent injunctive relief, (3) whether the threatened injury to the plaintiff outweighs any harm to the defendant, and (4) the public interest. Applying this standard, the court found that Plaintiffs established “a substantial likelihood of success on the merits of their First Amendment claim” that Section 9 unconstitutionally compels speech, but rejected Plaintiffs' void for vagueness and preemption claims at this stage. Having established a likelihood of success on the First Amendment claim, Plaintiffs also satisfied the irreparable harm requirement, and the balance of equities and public interest favored injunctive relief. The court explained, “While Texas has an interest in supporting the healthiness of food sold in its state, it does not have an interest in enforcing a law that likely violates the First Amendment.” Accordingly, the court issued a preliminary injunction.
The preliminary injunction provides temporary relief. Plaintiffs must ultimately prevail on the merits to obtain permanent relief barring enforcement of SB 25. Unless the injunction is lifted or SB 25 is upheld on the merits, the Texas Attorney General may not enforce the warning requirement against the Plaintiff associations and their members when it is scheduled to take effect for labels developed or copyrighted on and after January 1, 2027.
More details on the court's ruling follow.
First Amendment Claim
The court found that Plaintiffs demonstrated they are substantially likely to succeed on the merits of their claim that Section 9 violates the First Amendment by unconstitutionally compelling speech. Specifically, the court held that strict scrutiny likely applies because Section 9 is a content-based regulation that “compels food and beverage makers to convey a government-scripted message on food labels and online,” word-for-word. Under strict scrutiny, the government must prove the law is narrowly tailored to serve a compelling state interest. The court found that the State did not meet this burden.
The court further concluded that the State would not prevail even under intermediate scrutiny. Applying the four-part Central Hudson standard, the court found that although the State demonstrated a “substantial interest” (factor two of the Central Hudson test) in “supporting the health and well-being of its citizens by promoting better ingredients in foods sold in Texas,” it failed to show that Section 9 “directly and materially advances” that interest or is “narrowly tailored” to achieve it (factors three and four). The court noted that “the State could have spoken itself by conducting an advertising campaign but has not done so. Nor has the State shown that such campaign would be ineffective for advancing the substantial interest of promoting public health.”
Void for Vagueness Challenge
The court found that at this stage, Plaintiffs had not demonstrated a substantial likelihood of success on the merits of their vagueness challenge. Plaintiffs argued Section 9 is unconstitutionally vague due to its preemption provision, which would invalidate the warning requirement in the event a federal law, or an FDA or USDA regulation, (1) prohibits or imposes conditions on the use of one of a listed ingredient, (2) determines an ingredient is safe for human consumption, or (3) mandates a warning statement relating to processed or ultra-processed foods. Plaintiffs alleged that this provision fails to define key terms and thus businesses cannot know when federal law preempts Section 9. While the court acknowledged that “the law's lack of clear definitions makes it subject to potentially broad interpretation,” it concluded that Plaintiffs had not shown “that the law is so unclear that those in the food industry could not understand when the preemption clause would be triggered.” The court stated that this issue would be more appropriately addressed at a later summary judgment stage.
Preemption Arguments
The court also concluded that Plaintiffs had not shown a substantial likelihood of success on their preemption claims at this stage. Plaintiffs argued that Section 9 is preempted under the doctrine of conflict preemption because it forces manufacturers to choose between complying with state law and the Federal Food, Drug, and Cosmetic Act (FFDCA), which prohibits false or misleading labeling.3 According to Plaintiffs, Section 9's warning requirement is itself false and misleading. The court declined to address that issue at this stage of the litigation, explaining that it was “not persuaded that the language itself is false or misleading” and noting that the warning “was meant to capture four jurisdictions' perceptions of listed ingredients.”
Plaintiffs also argued that Section 9 is preempted because it stands as an obstacle to the Nutrition Labeling and Education Act's (NLEA), which Congress enacted in order to “establish uniform national standards for the nutritional claims and the required nutrient information displayed on food labels.” They asserted that Section 9 could force manufacturers to create multiple different labels for products sold nationwide, thus undermining Congress's goal of uniformity in food labeling. The court was not persuaded at this preliminary stage, holding that neither the FFDCA nor the NLEA “result in a finding that Section 9 is preempted by conflict or field preemption, particularly in light of the presumption against preemption.”
Next Steps
Texas cannot enforce the warning label requirement against the Plaintiff associations and their members while the lawsuit is ongoing. Texas may choose to appeal the decision. If it does, the case would go up to the Fifth Circuit, where this could be the second time that the Court of Appeals weighs in on a state's compelled disclosure law in two years. In Free Speech Coalition, Inc. v. Paxton, the Fifth Circuit affirmed a district court's decision preliminarily enjoining another Texas law that required certain health warnings on adult sites. The Court of Appeals reasoned that there were “numerous and obvious less-burdensome alternatives to the health warnings,” including a government-funded public information campaign.4 The Fifth Circuit would likely apply that same reasoning here, but this time in a much broader context.
The district court's decision could also have a signaling effect on pending legislation in other states where lawmakers have proposed similar bills requiring food companies to implement some kind of ingredient disclosure beyond what is already required under federal law. Lawmakers in at least four states, including Indiana (HB 1364), Tennessee (SB 2685), Wisconsin (AB 550), and Mississippi (SB 2395), have recently proposed legislation imposing warning or disclosure requirements similar to those mandated by Texas SB 25 and Louisiana SB 14. Louisiana's SB 14, which that state's governor signed into legislation last year, requires foods containing specified ingredients to include QR codes linking to an online disclosure and FDA's approval of the ingredient. That law will not go into effect until January 1, 2028.
So far, no legal challenge has been brought against the Louisiana law. But if the Fifth Circuit takes up the district court's preliminary injunction decision on appeal, a ruling there could draw a potential roadmap for a future lawsuit against SB 14 on First Amendment grounds.
We will continue to monitor developments in this case. Please contact us if you have any questions.
Authored by Trenton H. Norris, Veronica Colas, Rebecca Popkin, and Alexander C. Tablan.
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