United States: Vermont Is "Naturally" Genetically Modified

Last Updated: September 29 2015
Article by Michael A. Walsh

The state of Vermont was not one of the original 13 colonies and did not join the union until 1791, the year the First Amendment was ratified. That tardiness may explain its inability to interpret the First Amendment correctly. Vermont was settled by the French from whence its Ver (green) mont (mountain) name emerged as well as, perhaps, its penchant fouler aux pieds (to trample) the limitations the First Amendment places on state power—including the regulation of food manufacturers' speech. While Vermont's food pedigree is unassailable—it is the maple sugar capital of the U.S. and gave birth to Ben and Jerry's ice cream—when it comes to the First Amendment, it has a knack for serving up leftovers and for getting it wrong. In fact, the most important U.S. Supreme Court ruling in U.S. history impacting the "labeling" of products regulated by the Food and Drug Administration (FDA) came from Vermont. In Sorrell v. IMS, the Supreme Court found that a Vermont statute barring manufacturers from using certain commercially available information was unconstitutional under the First Amendment.

First Amendment cases are rare in the realm of the Food Drug and Cosmetic Act (FDCA), but Sorrell v. IMS was followed shortly afterward by U.S. v. Caronia, a small case involving a $50 penalty and 100 hours of community service. That little case sent shock waves throughout the country. Vermont was not the only one deaf to the news, however; the FDA itself ignored the fresh approach being taken by the court. The pace is now accelerating in the second circuit with Amarin v. FDA (see our post here) and Pacira v. FDA (see our post here).

Grocery Manufacturers Association v. Sorrell

First Amendment cases under the FDCA are rare because the FDCA is a criminal statute. Given that a win would likely produce little more than a pyrrhic victory, its penalties, including the threat of criminal convictions and debarment, are too steep and frightening to risk. Fighting on First Amendment grounds when the FDCA is invoked generally involves an extraordinary set of facts—something unique, outrageous, grossly wrong, or threatening to cause real injustice—or a party with nothing to lose by fighting. In Grocery Manufacturers Association, et al v. SorrelI1 a case which met those criteria, industry trade groups sought an injunction on First and Fifth Amendment grounds—arguing Commerce Clause violations and federal preemption—and challenged Vermont's Act 120 insofar as it restricted speech on the one hand and compelled speech on the other.

Vermont's Act 120 requires that "certain manufacturers and retailers identify whether raw and processed food sold in Vermont was produced in whole or in part through genetic engineering (the GE Disclosure Requirement). Act 120 further prohibits manufacturers from labeling or advertising GE foods as "natural," "naturally made," "naturally grown," "all natural," or "any words of similar import" (the act's Natural Restriction). The trial court ruled in Vermont's favor on the GE Disclosure Requirement but found the Natural Restriction exceeded the state's power under the First Amendment.

The GE Disclosure Requirement – Compelled Speech

Act 120 requires that a "packaged raw agricultural commodity" be labeled by GE manufacturers "with the clear and conspicuous words 'produced with genetic engineering.'"2 The trial court observed that the state made some findings to support this compelled disclosure. Among the findings the trial court noted:  "[w]ith regard to GE food safety, the General Assembly declared in its 'Findings' that GE foods 'potentially pose risks to health, safety, agriculture, and the environment," as evidenced by the following:

  • Labeling gives consumers information they can use to make decisions about what products they would prefer to purchase,"
  • Public opinion polls indicate labeling is relevant to consumers, and
  • Persons with certain religious beliefs object to producing foods using genetic engineering [and object] to tampering with the genetic makeup of life forms and the rapid introduction and proliferation of genetically engineered organisms and, therefore, need food to be labeled as genetically engineered.3

The trial court rejected GMA's argument that in-state and out-of-state impact violated the Commerce Clause.4

In denying the challenge to Act 120's GE Disclosure Requirement on federal preemption grounds, the court stated that a review of FDA's regulations "clearly implies that, at least from the FDA's perspective, GE ingredient information may be provided without violating federal law or misbranding a food product."5 Under the Draft Guidance, manufacturers may label their food and beverage products as "genetically engineered" or containing ingredients that were "produced using biotechnology."

The trial court further found the GE Disclosure Requirement was not barred based on conflict preemption grounds. The court stated that because "the term 'genetically engineered' is not federally regulated or defined for purposes of food and beverage labeling, it can hardly be said that a state definition that differs from definitions used in federal policy and guidance statements is "false and misleading," or "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."6

The trial court also rejected the Grocery Manufacturers Association's (GMA's) viewpoint discrimination claim that the GE Disclosure Requirement "singles out Plaintiffs' members for special burdens in order to tilt public debate in a preferred direction" that GE foods are unsafe and requires Plaintiffs' members to 'accommodate' that view and convey it to their customers."7

The Commercial Speech/Strict Scrutiny Debacle

The trial court rejected GMA's argument that the speech at issue is not commercial speech stating:  "While the 'core' notion of commercial speech is 'speech which does no more than propose a commercial transaction,' 'the Supreme Court has also defined commercial speech as 'expression related solely to the economic interests of the speaker and its audience.'"8 The court went on to pronounce that "'[p]roduct labeling requirements are traditionally regarded as commercial speech even if they effectively discourage the product's consumption."9

Deciding whether the speech at issue is commercial speech is the linchpin of determining the level of scrutiny the reviewing court will apply to the state action, and the issue of the definition of commercial speech has not been resolved by the Supreme Court. In Nike v. Kasky, the Supreme Court had the opportunity to define commercial speech but refused to reach the issue by dismissing the petition for lack of jurisdiction. Before dismissing the petition, however, the Supreme Court received 34 briefs, heard oral argument and—in its multiple opinions dismissing the appeal—suggested that even blended speech might be subject to heightened scrutiny. Thus, the issue of what constitutes "commercial speech" remains very much unresolved and central to the analysis of cases such as GMA v. Sorrell.

The Natural Restriction

Act 120's Natural Restriction, however, was not able to pass even the lower standard of intermediate scrutiny. Like the FDA regulations, Act 120 does not define the term "natural" or the phrase "any words of similar import." The trial court addressed the First Amendment challenge to the Natural Restriction as follows:

The State argues that it may freely regulate and even ban the use of "natural" and similar words to describe GE food products as such usage is inherently or actually misleading. To the extent Act 120's restriction on the use of "natural" terminology and "any words of similar import" is ambiguous, the State asserts that it can rely on the Final Rule to avoid and correct any ambiguity. Plaintiffs counter the State is wrong on both points. The court agrees.10

Act 120 does not define "natural," "naturally made," "naturally grown," and "all natural." The Final Rule also does not define these terms. The State thus faces an uphill battle in arguing that a GE manufacturer's use of 'natural' terminology is actually or inherently misleading because the alleged deception cannot be measured against a statutory, or even a regulatory, definition of the restricted terms.

The trial court's reasoning is as follows:

Greenhouses, fertilizers, pesticides, and even the watering, weeding, and pruning of plants are "manmade," "purposeful interference" in plant production, not "existing in nature," and thus can readily and reasonably be deemed an 'artificial means' of food production. More particularly, altering seeds and plants from their "natural" state has occurred for centuries through techniques such as selective breeding, hybridization, cross pollination, and grafting. Act 120's "natural" restriction thus subjects GE manufacturers to a standardless restriction that virtually no food manufacturer could satisfy.11

The trial court recognized that at best, the State:

mustered some evidence that some consumers may find the use of 'natural' terminology in conjunction with GE food misleading depending on how 'natural' is defined. This evidence does not rise to the level of 'evidence of deception' sufficient to support an outright ban on commercial speech. 12

The court concluded that Vermont failed to "establish that Act 120's Natural Restriction directly advances a substantial state interest and is no greater than necessary to serve that interest. Under Central Hudson, the state's complete ban on the use of 'natural' terminology in the advertising, labeling, and signage for GE food products therefore violates the First Amendment."13

Congress may bring national uniformity to what is emerging as a patchwork of state laws. It is poised to consider H.R. 1599, which passed the house in July 2015 that in its current form, commands the FDA to, at long last, define the term "naturally."

The FDA's repeated refusal to provide a definition has also given rise to pernicious litigation. While GMA won the first round in its challenge to Act 120 (and will likely prevail at the Second Circuit), an FDA standard would end food labelers' national regulatory confusion and put the term "naturally" back into the labeling lexicon. This development would, naturally, be welcome for manufacturers, retailers, and consumers.

Footnotes

1.  2015 U.S. Dist. LEXIS 56147 (D.VT April 27, 2015)

2. 9 V.S.A. § 3043(b)(1).

3. Id. at 13-14 (citations omitted).

4. Id. at 40.

5. Id. at 54 (citing the FDA, Draft Guidance on Voluntary Labeling for BE Foods, at 6-7 (2001).

6. Id. at 65

7. Id. at 83

8. Id. at 94-95.

9. Id. at 95.

10. Id. at 121.The court rejected the state's attempt to argue that an administrative rule would clear up the statutory ambiguity.

11. Id. at 124-125.

12. Id. at 17.

13. Id. at 136.

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