New Bipartisan Bill Introduced Regarding GMO Labeling

Last week U.S. Representatives Mike Pompeo (R-KS) and G.K. Butterfield (D-NC) introduced a bipartisan bill that would amend the Federal Food, Drug, and Cosmetic Act with respect to foods produced from, containing, or consisting of a bioengineered organism. The result has been either applause or outrage depending on which side of the GMO labeling debate you find yourself on.

Titled the “Safe and Accurate Food Labeling Act of 2014,” the bill, if passed, would establish a federal labeling standard for foods with genetically modified ingredients and give sole authority to the Food and Drug Administration (FDA) to require mandatory labeling on such foods if they are found to be unsafe or materially different from foods produced without genetically modified ingredients.

Specifically, the bill provides that biotechnology companies developing genetically modified ingredients for use in food products must submit a premarket approval notification to the FDA at least 210 days before the bioengineered organism is first introduced into interstate commerce. The premarket approval process outlined by the bill looks quite similar to the GRAS Notice Program currently in place for food additives.

The bill states that:

[a] bioengineered organism shall not be introduced or delivered for introduction into interstate commerce for a food use or application unless (1) the use or application of the bioengineered organism in food has been addressed by the developer of the bioengineered organism in a premarket biotechnology notification, to which the Secretary has responded…by stating no objections.

Within 30 days of receipt of the premarket notification, the FDA must deliver a preliminary where it will either:

  • inform the notifier that the notification is complete and has been filed; or
  •  inform the notifier of any missing elements that prevents further review of the notification.

Once the notification is complete and filed, the FDA then has an additional 180 days to substantively respond by informing the notifier that the agency has no objections or that the notifier’s safety determination is inadequate.

If the FDA does indeed determine that the notifier’s safety determination does not pass muster there is a material difference between a food produced from, containing, or consisting of a bioengineered organism and its comparable marketed food and that disclosure of such difference is necessary to protect health and safety or to prevent the label or labeling of such food from being false or misleading, the agency may specify labeling that would adequately inform consumers of such material difference. The bill is clear that the use of bioengineering does not, by itself, constitute a material difference.

The part of bill that has caused the biggest uproar can be found in Section 104 on Preemption. The Section states that:

no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce any requirement for the labeling of a food by virtue of its having been developed using bioengineering, including any requirements for claims that a food is or contains an ingredient that was developed using bioengineering.

The bill would block states from implementing their own labeling laws pertaining to food containing genetically engineered ingredients. The rationale behind the ban according to Rep. Pompeo is that this legislation would eliminate a 50-state patchwork of GMO labeling laws that could mislead consumers and raise the price of groceries. According to a recent article by James Andrews at Food Safety News, [e]fforts to label genetically modified organisms (GMOs) have sprouted across more than two dozen states, including two successful bills in Maine and Connecticut, along with measures that came up short at the ballot box in California and Washington.”

It is unclear whether the bill will pass, but Stoel Rives attorneys will be tracking its progress in the legislature and reporting on any developments.

Another GMO Labeling Iniative on the Horizon, This Time in Washington

Last week on January 3, 2013, sponsors of Initiative 522 (I-522), a measure that would require the labeling of certain genetically engineered foods, filed their petitions with the Washington Secretary of State’s Office for review.

The filing of I-522 comes in the wake of Proposition 37, a similar initiative that was ultimately rejected by California voters in November 2012. If enacted, I-522 would require that any food offered for retail sale in Washington that is, or may have been, entirely or partly produced with genetic engineering to be labeled as follows:

  • In the case of a raw agricultural commodity, the package offered for retail sale must clearly and conspicuously display the words “genetically engineered” on the front of the package, or where such a commodity is not separately packaged or labeled, the label appearing on the retail store shelf or bin where such a commodity is displayed for sale must display the words “genetically engineered;”
  • In the case of any processed food, the front of the package of such food must clearly and conspicuously bear the words “partially produced with genetic engineering” or “may be partially produced with genetic engineering;” and
  • In the case of any seed or seed stock, the seed or seed stock container, sales receipt or any other reference to identification, ownership, or possession, must state clearly and conspicuously that the seed is “genetically engineered” or “produced with genetic engineering.”

Like Proposition 37, I-522 exempts certain food from the genetically engineered labeling requirements. Specifically, the following certified organic products, alcoholic beverages, medical foods, food sold for immediate consumption such as in a restaurant, products unintentionally produced with genetically engineered material, food made from animals fed or injected with genetically engineered material but not genetically engineered themselves, food processed with or containing only small amounts of genetically engineered ingredients, and any processed food that would be subject to the labeling requirement solely because one or more processing aids or enzymes were produced or derived with genetic engineering.

Now that the petitions have been filed, they must be reviewed to confirm that the sponsors of the initiative have obtained the necessary 241,153 valid signatures of Washington registered voters. Once the signatures are verified, the initiative will then be turned to the Washington State Legislature for further action:

  1. The Legislature can adopt the initiative as proposed, in which case it becomes law without a vote of the people;
  2. The Legislature can reject or refuse to act on the proposed initiative, in which case the initiative must be placed on the ballot at the next state general election; or
  3. The Legislature can approve an alternative to the proposed initiative, in which case both the original proposal and the Legislature's alternative must be placed on the ballot at the next state general election.

The Washington Legislature will convene on Monday, January 14, 2013 and will be in session until April 28, 2013. Stoel Rives attorneys will report on the status on I-522 as it moves through the Legislature.

In addition to Washington's I-522, a bill that would mandate the labeling of food and commercial feed containing "genetically modified material" has been pre-filed in the New Mexico State Senate. Senate Bill (SB) 18, sponsored by Sen. Peter Wirth (D-Santa Fe), seeks to amend the New Mexico Food Act to require a disclosure label on any product containing more than one percent of a genetically modified material.

After Second Try, House Passes Food Safety Enhancement Act of 2009 (HR 2749)

U.S. House of Representatives approved HR 2749 moments ago. This action followed some confusion yesterday where it was brought to the floor needing a 2/3 vote and failed. Here’s a link to a report by the Rules Committee including the language of the bill as approved today by the House. Changes to the bill from what was proposed by the Energy and Commerce Committee include amendments aimed at concerns by smaller farmers of the $500 “facility registration fee,” performance standards and record keeping.

The legislation has been the subject of heavy debate inside and outside the beltway. Here’s a link to the Editorial in the New York Times in support of the bill. The Grocery Manufacturer’s Association (GMA) also has expressed support in a June press release for the bill as marked-up by the Energy and Commerce Committee. From some opposed to the bill, here’s a link with an impassioned argument from yesterday.

Note that the registration requirements in the bill as currently written “does not include farms; private residences of individuals, restaurants, other retail food establishments; nonprofit food establishments in which food is prepared for or served directly to the consumer.”

The bill further exempts from registration farms that sell food primarily at farmers markets. Also exempts farms that “manufacturer grains or other feed stuffs” grown on those farms and distributed to other farms for “consumption as food by humans or animals on such farm.”

Also note that traceability provisions remain. Section 107(c)(2) recognizes that work remains on the regulatory level for FDA to collect information, and develop technology and systems, and establish pilot programs before traceability becomes a reality.

NY Senator to Propose Director of Food Safety Oversight

Senator Charles Schumer (D-NY) is expected to introduce legislation today to strengthen U.S. food safety. Newsday.com is reporting that Sen. Schumer’s bill will call for a director of food safety oversight who would be a senior-level director at the Department of Commerce. The proposed director would focus exclusively on food safety.

PCA Recall - Insurance Lessons for Food Sellers

Bill Marler posted on his blog recently a complaint for declaratory relief filed by an insurer for Peanut Corporation of America (“PCA”). Mr. Marler comments, “Frankly, I read this suit several times and still do not see what the fight is about.” For those who represent commercial insureds in pursuing coverage from their insurers, the suit is no surprise. The suit is likely a function of the fairly limited insurance limits available to PCA, PCA’s tender of both bodily injury and recall expense related claims, possible exclusion for organic pathogens and/or allegations of intentional acts by PCA.

The complaint filed by PCA’s carrier, Hartford Casualty Insurance Company, alleges that PCA had at the time of the outbreak a $1 million primary liability insurance policy and $10 million umbrella insurance policy. Given the high number of probable personal injury claims (some of which will involve wrongful death) and the broad scope of products affected by the recall, claims will far exceed limits available to PCA under the Hartford policies. This outbreak demonstrates why any food manufacturer or seller should carefully consider whether its insurance limits are sufficient. A $10 million policy might have seemed to PCA like a great deal of coverage prior to the outbreak; today, the prevailing perception is that it is totally inadequate.
 

The complaint also alleges that the Hartford policies included “terms, conditions, exclusions, and limitations including but not limited to those pertaining to . . . coverage for claims arising out of the presence, suspected presence, or exposure to, among other things, bacteria.” The policies are not attached to the complaint. However, the allegation suggests that the Hartford policy might have included an organic pathogens exclusion. If the policy includes such an exclusion, PCA may be without coverage for any claims related to the Salmonella outbreak. The organic pathogens exclusion may exclude any claim for bacterial contamination of food products. As we’ve discussed previously on this blog, every food manufacturer should review its coverage to ensure that its policy does not include an organic pathogens exclusion.
 

Finally, the quick filing of a declaratory relief complaint by Hartford illustrates why a food seller needs to engage an experienced insurance coverage counsel immediately. Coverage counsel can assist in developing a strategy to pursue and preserve available insurance. Also, in situations such as PCA’s, all communications with insurers should be managed by coverage counsel. From the outset, communications with insurers are critical because they are likely to become relevant to the inevitable coverage disputes with the carriers.