Constitutionality of Vermont's Recently Enacted GMO Labeling Law Challenged

In a lawsuit filed yesterday, June 12, 2014, in United States District Court for the District of Vermont, four national trade associations representing food producers and manufacturers sued the state of Vermont claiming that the state’s recently passed Act 120, which would require certain food containing ingredients derived from genetically engineered crops to be labeled as such, violates the United States Constitution.

Enacted on May 8, 2014, Act 120 amends Title 9 of the Vermont Statutes to include a new chapter 82A, “Labeling of Food Produced with Genetic Engineering.” The new law requires food that is intended for human consumption and that is offered for sale on or after July 1, 2016 to be labeled as produced from genetic engineering if the food was entirely or partially produced with genetic engineering.

The act also prohibits a manufacturer of a food produced entirely or in part from genetic engineering from labeling the product on the package, in signage, or in advertising as “natural,” “naturally made,” “naturally grown,” “all natural,” or any other similar words. Most importantly, though, unlike other recently passed GMO labeling laws in Connecticut and Maine, Vermont’s law does not require passage of similar laws by other states in order to take effect. It is the first “no-strings-attached” GMO labeling bill to pass in any state.

Act 120 exempts certain foods from the labeling requirements including: food consisting entirely of or derived entirely from an animal that has not itself been produced with genetic engineering; a raw agricultural commodity or processed food that has been grown, raised, or produced without the knowing or intentional use of food or seed produced with genetic engineering, provided that the person responsible for labeling has obtained a sworn statement to that effect; processed food subject to labeling solely because it contains a processing aid or enzyme produced with genetic engineering; alcoholic beverages; processed food with genetically engineered materials that in the aggregate do not account for more than 0.9 percent of the total weight; food certified by an independent organization as not having been knowingly or intentionally produced from or commingled with food or seed produced with genetic engineering; unpackaged processed food intended for immediate human consumption; food served, sold, or otherwise provided in a restaurant or other food establishment; and medical food.

The lawsuit, filed jointly by the Grocery Manufacturers Association (GMA), the Snack Food Association, the International Dairy Foods Association and the National Association of Manufacturers, challenges the constitutionality of Act 120 on the basis that it “fails any standard of First Amendment scrutiny.” Specifically, the associations argue that Vermont does not have a sufficient government interest to compel the labeling of foods produced with genetically engineered ingredients and, therefore, runs afoul of the protections commercial speech is afforded under the First Amendment.

The plaintiffs also challenge Vermont’s law on the grounds that is violates the Fifth, Fourteenth, and Fifteenth Amendments as well as the Commerce and Supremacy clauses. Moreover, the complaint alleges that Act 120 is preempted by a number of federal laws, including the Federal Food, Drug and Cosmetic Act and the Nutrition Labeling and Education Act.

As this dispute heads to the court, other states, including Oregon, continue to introduce GMO labeling measures for legislator and voter consideration.

FDA Extends Food Facility Registration Deadline Until January 31

The Food and Drug Administration (FDA) has extended the deadline for food facilities to submit their registration until January 31, 2013.

Under the FDA Food Safety Modernization Act (FSMA), domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States are required to renew their facility registration by December 31, 2012, and every two years after that. FSMA directed that the food facility registration portal would be available starting on October 1, 2012.

However, FDA experienced a delay in implementing the biennial registration renewal for the 2012 cycle. As a result, the registration renewal portal did not become available until October 22, 2012. Food industry members requested that FDA extend the time to register in order to allow companies a full three-month window to complete the renewal requirement. In a new guidance document issued on December 12, 2012, FDA noted that it would exercise its enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013. 

Failure to register a facility, renew the facility registration, or update required registration information can have serious consequences. For instance, the U.S. can bring a civil or criminal action in federal court against a company that handles food without a proper facility registration. In addition, if food being imported or offered for import into the U.S. is from a foreign facility for which registration has not been submitted, the food could be held at the port of entry and may not be delivered to the importer, owner, or consignee of the food until the foreign facility is registered with FDA.

Along with the month-long extension, the FDA released an updated question-and-answer on facility registrations, and a shorter, simplified compliance guidance document for small businesses.

A Tale of Two Orders

Two recent court orders in motions to dismiss consumer fraud class actions illustrate the fine lines that exist in the analytical process courts engage in when determining whether or not a claim may continue forward.

In Zeisel v. Diamond Foods, Inc., the U.S. District Court for the Northern District of California denied Diamond Foods' motion for dismissal of the plaintiff’s claims. The complaint alleged that the plaintiff and other consumers in the class purchased the company’s shelled walnut products based on false claims of health benefits that consumption of the omega-3 fatty acids in walnuts provides. The complaint alleged (1) unfair competition, (2) false advertising, (3) violation of California’s Consumers Legal Remedies Act and (4) unjust enrichment.

Diamond Foods moved for dismissal on the basis that the plaintiff’s claims were preempted by the Federal Food, Drug and Cosmetic Act (the “FDCA”), as amended by the Nutrition Labeling and Education Act (the “NLEA”). The court found that the plaintiff’s claims were not expressly preempted on the plain language of the NLEA’s preemption clause, and further that the plaintiff’s unfair competition claims were based on California’s Sherman Food, Drug and Cosmetic Law, not the FDCA. The court also held that the plaintiff’s claims were not impliedly preempted, as Congress expressly stated its intent that the NLEA was not to be construed to preempt any provision of state law, unless such provision is expressly preempted under section 403A of the FDCA. As such, the plaintiff’s claims were allowed to move forward.

However, in Loreto v. Procter & Gamble, the background and core issues of which we blogged about here and here, the U.S. District Court for the Southern District of Ohio granted Procter & Gamble’s motion for dismissal, and dismissed the plaintiffs’ claims with prejudice. The plaintiffs alleged that Procter & Gamble violated consumer fraud statutes in New Jersey and all other states and the District of Columbia through false and misleading advertising practices involving Vick’s DayQuil Cold and Flu Symptom Relief Plus Vitamin C and Vick’s NyQuil Cold and Flu Symptom Relief Plus Vitamin C.

The court initially held that the plaintiffs, residents of New Jersey, lacked standing to pursue any claims under any state consumer protection statute other than that of New Jersey. Next, the court agreed with Procter & Gamble’s contention that despite presenting their cause of action in the form of a claim under the consumer protection statutes of New Jersey and other states, the plaintiffs’ cause of action was in actuality an improper attempt to assert a private right of action under the FDCA. Finally, the court held that even if it were to assume the plaintiff’s claims were not an improper attempt to assert a private right of action under the FDCA, the plaintiff’s claims merited dismissal as the alleged no actual injury, failed to allege causation, and otherwise failed to assert other essential elements of the individual state consumer law causes of action. The court, holding that the plaintiffs had ample opportunity to amend their complaint on notice of Procter & Gamble’s positions and failed to address the pleading deficiencies in their amended complaint, ultimately found that dismissal with prejudice was warranted.

The Latest On The Battle Over Federal Preemption of State Salmon Labeling Claims. . .

 

The Supreme Court signaled last fall it may review a California Supreme Court decision finding that federal law does not preempt claims for violations of state consumer protection laws concerning “selling artificially colored farmed salmon without disclosing to . . . customers the use of color additive.” It invited the justice department to comment on the petition for certiorari.

                                                   

Not surprisingly, the Bush Administration through its solicitor general took the side of those who seek to uphold the California Supreme Court’s decision finding no federal preemption. The petitioners filed a brief responsive to the government. Their argument is in part that:

In its brief, the United States never explains thequestion at the heart of this case: why Congresswould expressly prohibit private actions and even unsupervised state government actions to enforce the FDCA, but allow unregulable private actions toenforce state laws identical to the FDCA. Permitting private litigants to enforce state laws that admittedly“mirror” FDCA requirements cannot be squared with Congress’ intent that such requirements be enforced by government entities alone andthat control over such litigation be federally centralized.

It appears that the Supreme Court’s decision whether to accept review of this case will come earlier in the new year. Most Supreme Court watchers give this case a strong chance of receiving review. The decision could change the landscape of food liability law dramatically.