United States: New Rules Coming For GMO Food Labeling

Facing a consumer fraud lawsuit based on your product's "non-GMO" or "GMO-free" labeling? The USDA's forthcoming rules on the National Bioengineered Food Disclosure Standard may impact your defense.

In a few months, the USDA is required to publish its proposed final rule on the National Bioengineered Food Disclosure Standard ("the GE Disclosure Law"). The rule will address what foods should be considered "bioengineered," what amount of bioengineered substances in a food product will trigger a disclosure requirement, and how the presence of bioengineered foods must be disclosed, among many other thorny and highly technical issues.

"GMO-Free" litigation and early preemption rulings

The issue of disclosure (or non-disclosure) of bioengineered food ingredients is also playing out in consumer fraud false advertising lawsuits across the country. In these cases, plaintiffs contend that products labeled as "non-GMO" or "GMO-free" are false and misleading because some of the ingredients are actually derived from genetically engineered substances or were made with genetic engineering techniques.

Defendants in these lawsuits have challenged the claims (so far unsuccessfully) as being preempted by the GE Disclosure Law, which expressly preempts states from establishing their own GE food labeling requirements. (See 7 U.S.C. § 1639i(b).) This preemption provision was included in the GE Disclosure Law to stop states (e.g., Vermont) from implementing conflicting GE labeling requirements.

At least two courts have held that the GE Disclosure Law did not preempt consumer fraud claims because the statutes invoked by the plaintiffs did not affirmatively impose a GE labeling standard or requirement. Instead, those statutes merely prohibited companies from making false or misleading voluntary food labeling statements. [See In re Kind LLC "Healthy & All Natural" Litig., at *3 (WL 1156009, S.D.N.Y. Mar. 2, 2018); Kao v. Abbott Labs, Inc..] In all reported decisions considering the issue, "non-GMO" false advertising claims have survived a preemption attack.

These outcomes don't necessarily mean that defendants should abandon a preemption defense. Certainly, you should consider federal preemption in your responsive pleading. These early case results, however, suggest that a motion based on preemption might have a greater chance for success after initial discovery and record development, especially if the plaintiffs' theory of the case evolves over time.

So your preemption attack failed?

Even if a preemption attack fails, it is still important for food companies to pay close attention to the USDA's forthcoming proposed rules and consider moving to stay the litigation pending their publication.

That is because courts have signaled a willingness to take guidance from the USDA on when a food can be considered "bioengineered" and to look to the USDA's definitions when they consider motions for rulings as a matter of law that a food is not bioengineered, or is "non-GMO."

As one court noted, although the USDA's standard won't "conclusively shed light on whether a reasonable consumer would have been deceived by KIND's representation that its products were GMO free ... [A]gency 'guidance could explain whether ingredients' derived from genetically modified crops could be considered "non-GMO." [In re Kind LLC "Healthy & All Natural", at *6.] The court further noted that "[t]here is no doubt that a national GMO standard will be relevant to many of the underlying issues in this action."

The Northern District of California signaled an even stronger deference to the USDA's forthcoming rules and definitions, stating:

Even though Plaintiffs' claims are not preempted, to prevail on their claims they must generally establish that the labels on Similac Non-GMO were misleading. The USDA, to whom Congress has exclusively provided authority to regulate GMO labeling in the interest of uniformity in administration, will be issuing rules that bear directly on this inquiry. ... These regulations will address the level of genetically modified ingredients that a product can contain while still being marketed as "GMO-free" or "non-GMO." ... If the USDA issues a zero-tolerance rule, Plaintiffs need only prove that Similac Non-GMO contained even a trace amount of genetically modified ingredients to prevail on their claim. If the rule allows for some threshold amount of genetically modified ingredients, all that will be required is to compare the test results with the threshold amount set by rule. If Abbott's labeling complies with USDA rules, Plaintiffs would have great difficulty in proving their claims for unfair competition, false advertising, or breach of warranty. In any event, the agency action will dramatically streamline this case.(Kao v. Abbott Labs. Inc., at *11)

Not all courts will give the USDA's forthcoming definitions the high level of deference that the Kao court suggests. And not all courts will adopt the GE ingredient "threshold amount" approach suggested by the Kao court, regardless of the proposed rules. It is reasonable, however, to assume that most courts will, at a minimum, consider and give some deference to the USDA's definitions.

That courts are willing to consider the USDA's forthcoming definition of "bioengineered food" and "bioengineering" – as opposed to a definition put forth by plaintiffs' attorneys, which will undoubtedly be broad and nebulous – suggests that defendants should consider moving to stay these types of cases pending the proposed rules.

There is certainly reason to speculate that the Trump administration's animosity toward increased regulation in general, and dislike of mandatory GE labeling in particular, may result in narrow definitions of "bioengineering" and "bioengineered food." Indeed, the law's narrow definition of "bioengineering" already arguably excludes certain gene-editing techniques that plaintiffs would define as "GMO."

If a food is not considered bioengineered by the USDA, courts may be more likely to find that such food is not a "GMO" as a matter of law, and dismiss the lawsuit outright. A court could also, after referencing the USDA's definitions, determine as a matter of law that no reasonable consumer could be misled by the challenged non-GMO statement. Of course, whether to put this question to a judge (and not the jury) should be carefully considered in light of the venue and court's record on related issues.

Summary

In short, the USDA's forthcoming definitions of "bioengineering" and "bioengineered food" could help the defense put a quick end to false advertising lawsuits based on "non-GMO" or "GMO-free" labeling. Although arguing for an early preemption ruling may be an uphill battle, moving to stay may provide initial relief and could ultimately strengthen a merits defense.

To learn more about the National Bioengineered Food Disclosure Standard, its nuances, and potential impact on your business, please contact Kim Bousquet.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions