The Legal Ramifications of the ‘Natural’ Food Label Fight and What It Means for You

 03/24/2016 04:08 pm ET | Updated 2 days ago

• Shagha TousiPartner at Nutter McClennen & Fish, LLP

While it is impossible to predict with any certainty what this year will bring, 2016 is shaping up to be a pretty active year in the food labeling world. Earlier this month, the U.S. Senate Agriculture Committee voted on legislation that would limit the labeling of foods made through genetic modification. Taken together with passage of a similar bill by the House of Representatives in July 2015, it appears likely that food shoppers will see some changes in the labeling requirements that apply to their food products in 2016, particularly when it comes to genetically modified organisms (GMO). 

Even absent federal legislation, Massachusetts, Connecticut, Maine, New Hampshire, Rhode Island, and Vermont are just a few of the states that have either proposed or enacted legislation on the topic of GMO food products and product labeling requirements. In Vermont, the new requirements are set to take effect on July 1, 2016. Given the increased attention on food labeling and the use of genetic engineering in foods, the list of states that will consider GMO labeling requirements is likely to grow.

States’ actions and the Vermont case

At the start of 2016, Maine, Connecticut and Vermont were the only states that had passed mandatory labeling legislation. The legislation in Connecticut and Maine contain multi-state trigger provisions, meaning that the legislation would not become effective until other states also passed similar legislation.

Vermont’s mandatory genetic engineering labeling legislation, known as Act 120, is set to take effect on July 1, 2016, requiring that all food sold in Vermont that is entirely or partially produced with genetic engineering be labeled as such. If that date holds, 2016 will be the year that the country’s first GMO labeling legislation takes effect.

The ‘revolution’ around labels is driven by consumer advocates who believe the general public would be best served by knowing which products are made with or contain ingredients that were produced through genetic engineering.

According to the World Health Organization (WHO), genetic modifications were initially introduced to improve crop protections from disease and insects. The WHO reports that foods with GMOs have passed safety assessments and are not likely to present risks for human health, and the U.S. Food and Drug Administration has concurred, but labeling backers advocate for transparency, saying that little is known about the long-term effects.

As Huffington Post has reported, the implications of mandatory labeling are complicated. Everything from how much the cost of food products will rise for consumers due to the increase in costs associated with the new labeling requirements, to the thresholds of percentages of GMO ingredients that would trigger labeling requirements remain unclear.

Litigation and uncertainty
The legal landscape is equally murky. The Vermont statute is currently the subject of litigation filed by a number of food trade associations. They challenge the legislation on several bases, including preemption pursuant to several federal statutes regulating the labeling of food and beverages such as the Federal Food, Drug, and Cosmetic Act (FDCA). Pending the outcome of this litigation, however, consumers buying food products in Vermont may see required GMO labeling on their food products.

Many manufacturers are concerned, but they need not panic about logistical challenges and legal ramifications just yet. Congress has taken steps to enact legislation that would preempt any bill enacted by individual states. A federal remedy on the topic of GMO labeling would certainly simplify and streamline the requirements for food manufacturers because affected companies would no longer have to evaluate individual state statutes across the country and develop labels that comply with multiple statutes at the same time.

The Senate Agriculture Committee’s vote in March would, in essence, block state GMO labeling requirements from taking effect, including Vermont’s Act 120, which mirror’s the bill passed by the U.S. House of Representatives last July. Congress’ action on GMO labeling should give manufacturers some comfort as the bills under consideration share the common goal of simplifying compliance for the manufacturers.

Even if the federal legislature fails to reach agreement on a bill, many of the proposed (or enacted) statutes at the state level contain multi-state trigger provisions as is the case in Maine and Connecticut. These conditions serve to delay the effective dates of statutes until other states enact similar rules.

State versus federal interests

As a legal matter, the topic of food labeling, including “natural” or GMO labeling, certainly impacts the conflicting interests of the state and the federal government to regulate food safety. 
While states have an interest in regulating the safety of foods sold to their residents, the realities of the food industry necessarily call upon the federal government’s interest in regulating interstate commerce under the Commerce Clause of the Constitution. Also, various federal statutes, including the aforementioned Food, Drug, & Cosmetic Act, provide for a complex regulatory scheme that governs the production and sale of food products in the U.S.

Key issues

State legislation with labeling requirements that conflict with the requirements set forth by the FDA would impede on the Agency’s ability to create a uniform regulatory scheme. If allowed to stand in conflict, the differences between federal and state statutes, and among state statutes, will make it nearly impossible for the food industry to comply with federal regulation and individual state statutes without incurring enormous costs that for many companies, will be prohibitive.

This explains why the viability of federal statutes under the Constitution’s Commerce Clause and the Supremacy Clause, which provides federal preemption over state laws, lie at the heart of the litigation currently pending in federal court in Vermont over that state’s legislation. The Vermont law specifically states that a food product must be labeled as a GMO and not as natural if it is “partially produced with genetic engineering.” It is hard to say what courts will do with this because the term “partially produced” has never been litigated in the context of food production or labeling.

The Vermont statute itself, however, specifically exempts any food from labeling requirements if the food “includes one or more” genetically engineered materials that “in the aggregate do not account for more than .9 percent of the total weight of the processed food.”

FDA Guidance

The FDA is mindful of the questions associated with state laws such as Vermont’s. In November 2015, the FDA issued a “guidance“ on labeling of plant-based foods manufactured to assist those seeking to challenge state GMO labeling statutes on the grounds that such state statutes are preempted by the federal regulatory scheme.

Litigants can use this guidance to argue that the FDA has spoken on the topic and their position must be given preemptive effect. This type of challenge has not been successful in the past, however. In a 2014 case involving the cereal and snack bar manufacturer Kashi Co., the federal court in Florida denied an argument that public policy statements by the FDA should be given preemptive effect. The FDA statements relied upon by Kashi did not rise to the level of a formal guidance, but absent more definitive action from the FDA or further regulation it’s likely that other courts will be similarly reluctant to determine that FDA guidance should preempt state statutes.

What’s next

Assuming Congress fails to act in time and the courts uphold the Vermont Law, change will follow. Generally speaking, every food producer will need to evaluate its ingredient sourcing and its production methods to determine whether its foods are currently manufactured using genetically engineered ingredients or processes.

If that comes to pass, consumers will likely see that many food products are marketed in a different manner. Manufacturers will surely revisit their packaging to consider whether Vermont’s statutorily provided language “produced with genetic engineering,” or one of the variations of this provided in the law, requires a change in labeling.