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GMO Archive

Will Vermont’s GMO Labeling Law Survive Legal Challenge?

May 5, 2014

by Lauren Handel

Vermont’s GMO labeling bill is expected to be challenged in the courts soon after it is signed by the Governor. In an opinion piece for Food Safety News,  Shelley Powers predicts “Vermont Will Triumph Against Court Challenges to New Labeling Legislation.” My prediction more lawyerly and less sanguine: Vermont’s GMO labeling law might survive constitutional challenge, in part, or it could be entirely struck down. The two biggest constitutional hurdles for Vermont’s law are federal preemption and the First Amendment guarantee of free speech.

Regarding preemption, Ms. Powers says that the “Supremacy Clause doesn’t apply to Vermont’s law” because FDA does not formally regulate GMO labeling. It is true that FDA has issued only informal guidance regarding labeling of GMO products. For that reason, I agree with Ms. Powers that Vermont’s law is not likely preempted with respect to the labeling of food products within FDA’s jurisdiction. However, I believe that Vermont’s law is preempted to the extent that it requires labeling of foods within USDA’s authority. While the law has an exemption for “food consisting entirely of or derived entirely from an animal which has not itself been produced with genetic engineering,” foods made in part with meat or poultry would be subject to the labeling requirement. The labeling of such foods is governed by USDA under the Federal Meat Inspection Act and Poultry Products Inspection Act. Both of those statutes expressly preempt state laws imposing labeling requirements “in addition to, or different than” federal law. Vermont’s law requires labeling in addition to and different than that required by USDA and, thus, it likely is preempted with respect to foods containing meat or poultry.

The First Amendment analysis could go either way, largely depending on what test the court decides to use. Ordinarily, laws regulating commercial speech are analyzed under the test articulated by the US Supreme Court in Central Hudson Gas and Electric Corp. v. Public Service Commission of New York. That is the four-part test Ms. Powers references. If the court applies Central Hudson, the State of Vermont will have the difficult burden of proving (not merely claiming, as Ms. Powers states) that it has a substantial interest in requiring GMO labeling and that the law materially alleviates the problems. Although the Vermont bill declares that it has an interest in preventing consumer deception, preventing potential risks to human health, protecting religious practices, and protecting the environment, it is not clear that the State has evidence sufficient to prove that these are legitimate concerns or that labeling of GMO foods would materially advance any of these interests. 

Ms. Powers quotes from an analysis of the Vermont bill by the law firm Emord & Associates, which opines that the law is constitutional under the First Amendment. The authors of that memo anticipate that a court reviewing the Vermont law will apply a fairly lax (regulation-friendly) First Amendment test from the Supreme Court’s decision in Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio. In that case, the Court held that government may require commercial speakers to make “purely factual and uncontroversial” disclosures that are “reasonably related to the State’s interest in preventing deception of consumers,” as long as the requirements are not “unjustified or unduly burdensome.” The Supreme Court never has applied this test in circumstances where the government did not have an interest in preventing consumer deception. However, the US Court of Appeals for the Second Circuit (Vermont is within the Second Circuit) has held that the Zauderer test is appropriate where the state requires a purely factual disclosure, even if its interest is unrelated to preventing deception.

Even where Zauderer applies, the Second Circuit has said that the state’s interest has to be something more than satisfying consumer curiosity. In the mid-1990s, the same court found that a Vermont law that would have required labeling of dairy products produced with the synthetic growth hormone rBST violated the First Amendment because the State’s only interest was in satisfying consumer curiosity. Vermont will have a difficult time, I think, in distinguishing its present interest in informing consumers about the presence of GMOs from its earlier interest in disclosure of rBST. Thus, even if the court applies the easier test, Vermont’s “triumph” is far from a sure thing.

 

 

GMO Labeling and Food Prices

September 12, 2013

– by Lauren Handel

Proponents of GMO labeling laws, such as Washington State’s Initiative 522, are touting a new study finding that mandatory labeling will have no effect on retail food prices. The study, which was commissioned by the advocacy group Just Label It, undoubtedly is intended to counter claims by labeling opponents that mandatory GMO labeling will result in higher prices. However, the study overlooks key consequences of labeling laws that are likely to drive up costs for food manufacturers, wholesalers, retailers and – at least to some degree – consumers.

The study’s author, corporate sustainability consultant Kai Robertson, looked at research on the factors influencing supermarket prices, as well as literature on the impact of food label changes on retail prices and drew two conclusions. First, that demand-related factors – such as consumer demographics and competitors’ pricing behavior – affect the prices set by grocery stores more than wholesale costs. The unstated implication of this is that, even if a labeling law increases wholesale costs, retailers might not pass those costs on to their customers. That could be true, but it defies common sense to think that grocers – which typically operate on slim margins – won’t pass on at least some of their increased costs to consumers. Moreover, the study says nothing about how retail prices will be affected by retailers’ increased compliance costs, such as increased recordkeeping costs.

"Welcome back, Doctor. We missed you."

“Welcome back, Doctor. We missed you.”

Second, Robertson reports that there are no existing studies on the link between product labeling changes and prices charged to consumers. From this, she concludes, “this study finds no evidence that changes to a food processor’s product labels affect the prices paid by shoppers.” Again, that may be true, but a lack of “evidence” when no studies have been done tells us nothing about what those studies would find, if they were done. More importantly, though, the cost of labeling changes is not the factor likely to drive price increases, although the costs of having to use special labels just for products sold in Washington could be substantial (a point Robertson does not address).

To put it as simply as possible, we are systemically incapable of making GMO labeling an inexpensive proposition. It is not possible to avoid GMOs without increasing costs, given our existing food distribution infrastructure. The most significant costs of mandatory GMO labeling likely will result not from manufacturers having to add “genetically engineered” to their product labels, but rather, from the steps that food businesses will have to take to avoid the label. Obviously, producers would rather not brand their products as containing something consumers view negatively. Yet, even if a product contains trace amounts of GMO material, and even if GMOs are not intentionally added to the product, Washington’s Initiative 522 would require the product to be labeled as “partially produced with genetic engineering” or “may be partially produced with genetic engineering.” To avoid using those labels, food manufacturers will have to implement measures to ensure that non-GMO and GMO ingredients are not commingled and do quality control testing to confirm that GMO materials are not present. Furthermore, everyone in the supply chain from farmer to retailer will have to obtain affidavits from their suppliers stating that the ingredients were not intentionally produced with genetic engineering and were segregated from GMOs. A study relied on by the “No on 37” campaign – the industry group that lobbied against California’s Prop 37 – estimated that such increased operational and recordkeeping costs would add $400 per year to the average California family’s grocery bills. Even if that number is inflated, the cost is not realistically zero. Robertson’s study does not consider these costs.

Connecticut GMO Labeling Bill Introduces New Rules for “Natural” Labeling

June 24, 2013

– by Lauren Handel

As covered in an earlier post, this month, Connecticut became the first state in the nation to pass a bill requiring labeling of genetically-modified (GMO) foods. If signed by the Governor, as expected, the law’s GMO labeling requirements will not take effect until at least four more states, including Northeast states with a total population of at least 20 million people, enact similar legislation. Although the Maine Legislature quickly passed a similar GMO labeling bill, it is anyone’s guess as to whether or when another three states with sufficient population will do likewise. However, a significant part of Connecticut’s bill, which has received little to no attention in the press, will take effect on October 1, 2013, even if no other states adopt GMO labeling laws.

Starting October 1, persons who advertise, distribute, or sell food in Connecticut are prohibited from using the term “natural” or similar language to describe food produced with genetic engineering. Unlike federal law and that of all other states except Massachusetts, Connecticut law already limits the use of the “natural” descriptor in food labeling and advertising. Under existing Connecticut law, food may be marketed as “natural” only if it has not been treated with preservatives, antibiotics, synthetic additives, artificial flavoring, or artificial coloring; and if it has not been processed in a manner that makes it significantly less nutritive. Connecticut’s GMO labeling law adds genetically-engineered foods to the list of foods that may not be called “natural.”

Like California’s failed Proposition 37, which also included a very broad ban on natural claims, Connecticut’s bill seems to go further than lawmakers may have intended. While the bill exempts several categories of food from its requirement to label foods produced with genetic engineering – including, alcoholic beverages, food sold for immediate consumption, farm products sold directly to consumers, and food derived from non-genetically engineered animals – those exemptions do not apply to the prohibition on natural claims. Furthermore, while the GMO labeling requirement applies only to food for human consumption, the prohibition on natural claims applies to all “food,” including food for animals. In addition, whereas the bill exempts processed foods containing not more than 0.9% GMO ingredients from the GMO labeling requirement until July 1, 2019, there is no similar tolerance in the restriction on natural claims.

Given the prevalence of GMO ingredients in the marketplace, Connecticut’s law could pose significant practical difficulties for many businesses that sell food in the state. For example, unless and until goods containing GMO ingredients are labeled as such, how will retailers know whether products labeled with natural claims are misbranded? A retailer would have to assume that all processed foods without organic or other non-GMO certification contain GMOs.

Moreover, the law is problematic from a legal standpoint because it conflicts with – and, therefore, likely is preempted by – federal law. In particular, Connecticut’s prohibition on the use of “natural” may directly conflict with decisions of the US Department of Agriculture (USDA) and the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) in carrying out their responsibilities to pre-approve labels for meat products and alcoholic beverages, respectively. Neither USDA nor TTB prohibit the use of the term “natural” in labeling of products made with genetic engineering. Unless some action is taken to limit the Connecticut bill’s prohibition on natural claims, we can expect these preemption issues, among other legal challenges, to be raised in the courts.

Connecticut Legislature Passes GMO Labeling Bill

June 20, 2013

by Gabriella Agostinelli

Last week, the Connecticut legislature passed a milestone bill requiring special labels on genetically-modified (GMO) food products. Once Connecticut governor Dannel Malloy signs the bill into law, Connecticut will officially become the first state to successfully enact a mandatory GMO labeling law.

In 2013, 95 GMO labeling bills were introduced in 28 states. Some have failed and others are still pending, but few go as far as Connecticut’s law. The bill’s advocates call the law “historic” and aver that “Connecticut will now set the standard for states around the country to follow.”

Unlike past efforts to regulate GMO products in other states, the Connecticut law seeks to defuse some potent Constitutional arguments against state-to-state GMO labeling laws.

Delicious again, Peter.

In an effort to shield the state’s producers from competitive disadvantage, Connecticut’s legislation stipulates that GMO labels would be required to appear on products in the state’s supermarkets only after two conditions are met. First, four other states, including one bordering Connecticut, must enact similar labeling rules. Second, the aggregate population of any Northeast states (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, New York, Pennsylvania or New Jersey) that enact such a law must have a total population of more than 20 million people.

This legislative jui jitsu is probably intended to side-step the Dormant Commerce Clause, which forbids individual states from unduly burdening interstate commerce. Given the national and regional nature of food distribution, when one state requires special labeling, the practical effect is to require manufacturers to use the special labels on products they supply to other states in the region. State regulation that has a practical effect of forcing out-of-state compliance with in-state requirements may pose an unconstitutional burden on interstate commerce in violation of the Dormant Commerce Clause. Acknowledging the interests of neighboring states is Connecticut’s way of mitigating a Dormant Commerce Clause objection to the GMO labeling law.

This is not the only time a state legislature has tried to accommodate this principle of Constitutional law. The Maine legislature also passed a similar bill just days after Connecticut’s legislature passed theirs. This is a very good sign that state GMO legislators are learning from the failure of past efforts.

If it feels like we are having the same argument about GMO’s, we are. The state-by-state approach to GMO labeling will inevitably come up against other constitutional obstacles. Just because lawmakers are becoming more adept does not mean smooth sailing for state GMO regulation. The issue is ripe for federal resolution that holds manufacturers to a singular labeling standard. That is the reason why giant food companies like Pepsi, ConAgra Foods and Walmart have convened to discuss lobbying for such legislation. After last year’s Prop 37 initiative in California, where corporations spent more than $40 million to oppose GMO labeling, some food companies have developed a different mentality: if you can’t beat ’em, join ’em. While federal GMO labeling bills have struggled to gain a toe-hold in Congress, we will all have to stay tuned to see what the future holds.

 

Farmers (Sort Of) Lose Appeal Against Monsanto

June 11, 2013

–By Lauren Handel

In an unsurprising decision, the US Court of Appeals for the District of Columbia Circuit has ruled that the Organic Seed Growers and Trade Association case against Monsanto was properly dismissed by the district court. The case was brought by a group of 60 family farmers, seed businesses, and agricultural organizations to preemptively block Monsanto from suing them for patent infringement in the event that Monsanto’s protected “Roundup Ready” genetically modified seeds and traits unintentionally drifted to their fields. The district court found that there was no actual controversy because the plaintiffs’ concerns that GMO contamination could reduce the value of their crops and cause them to lose organic certifications were merely theoretical and hypothetical possibilities. None of the plaintiffs alleged that contamination actually had occurred. Moreover, none of the plaintiffs had been sued by Monsanto or threatened with a lawsuit for patent infringement. Nor was there any evidence that Monsanto had ever sued anyone for unintentional patent infringement.

Although the plaintiffs technically lost, they won, for practical purposes, at least some of the relief they sought – assurance that Monsanto will not go after farmers who unintentionally use their patented GMO technology due to crop drift, at least when only trace amounts of Monsanto’s patented seeds are present. The Court of Appeals found that Monsanto has made binding assurances, including by making the following statement on its website:

It has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in farmer’s fields as a result of inadvertent means.

Because Monsanto won this case based on representations that it will not sue for inadvertent infringement in such circumstances, Monsanto is judicially estopped from taking a contrary position in a future lawsuit against the plaintiffs. The court found that Monsanto committed not to sue persons who unintentionally plant or sell seeds that are inadvertently contaminated with “trace amounts” (up to one percent) of seeds carrying Monsanto’s patented traits.

Yet, as the court pointed out, Monsanto takes a “narrow” view of inadvertent infringement, “excluding those growers whose crops become accidentally contaminated, and who do not treat their fields with Roundup, but who, knowing of the contamination, harvest and replant or sell the seeds.” And, it remains an open question whether Monsanto might seek to enforce its patent rights in circumstances where a farmer unintentionally uses or sells more than a trace amount of Monsanto’s patented seeds. Thus, the court’s decision leaves open the possibility that a similar lawsuit could be brought by a plaintiff seeking protection from a patent infringement action if the plaintiff unintentionally uses or sells seeds containing more than one percent of Monsanto’s technology.

The Legal Consequences of GMO Crop Drift

June 6, 2013

–  by Lauren Handel, Esq.

Last week’s report that unapproved genetically-engineered (GE) wheat unexpectedly was found growing in an Oregon farmer’s field has brought renewed attention to the issue of genetic crop contamination. The unintended transfer of engineered DNA to non-GE crops could cause economic harm, as evidenced by the fact that Japan – one of the largest importers of US wheat – has temporarily banned imports of US Western White wheat in response to the reported finding in Oregon. At least one lawsuit has already been filed against Monsanto alleging that the Oregon incident has damaged the market for US wheat.

The Oregon finding comes on the heels of the US Court of Appeals for the Ninth Circuit’s recent decision not to overturn USDA’s approval of genetically-engineered alfalfa. That decision is particularly important for its holding that, in determining whether to allow commercialization of new biotech plants, USDA may consider only whether the new plant is likely to be a plant pest, such as by spreading disease to other plants. According to the Ninth Circuit, USDA has no power to consider the potential environmental impact of a GE crop (such as, increased resistance of weeds to herbicide) or the potential economic harms that might result from genetic contamination of organic or other non-GE crops.

Unresolved legal issues create a host of problems for non-GMO farmers

These latest developments suggest that concerns about GE contamination of non-GE crops will only increase. Biotech companies will continue developing GE crops, and absent a change in law, USDA’s power to regulate them will be limited. It is not seriously disputed that incidents of contamination will occur and cause some amount of harm. Rather, the current debate is mostly about who – as between the farmers who use GE technology and the biotechnology companies, on the one hand, and the non-GE farmers, on the other hand – should bear the responsibility and costs of preventing contamination as well as the economic losses resulting from contamination.

In cases involving contamination from unapproved GE crops like the wheat found in Oregon, courts have found that plaintiffs suffered real harms and allowed them to assert negligence and nuisance claims. The plaintiffs harmed by contamination from unapproved StarLink corn and Liberty Link rice recovered large settlements and damage awards. However, such cases represent a departure from the default position that has emerged in the law, which generally imposes the costs of prevention and contamination on the farmers who choose not to use GE technology, rather than on the biotech companies and growers of GE crops.

As explained by University of Illinois law professor A. Bryan Endres the default allocation of costs can be thought of as a rule requiring non-GE farmers to “fence out” GE contamination, rather than requiring GE producers to “fence in” the engineered genes. For example, certified organic producers must take “reasonable” steps, through implementation of their approved organic system plans, to prevent contact with GE material. Such steps may include the use of buffer zones to separate organic from GE crops, testing seeds for GE, timing planting to stagger flowering of organic and GE crops, forming agreements with neighbors to avoid planting GE crops adjacent to organic crops, cutting or mowing alfalfa prior to flowering, and posting signs to notify neighbors of the location of organic fields. The costs of taking such preventive measures ordinarily cannot be recovered through litigation unless a farmer also suffers actual contamination resulting in harm. As demonstrated in the Organic Seed Growers & Trade Association v. Monsanto case, which was decided by the US District Court for the Southern District of New York last year, unless plaintiffs suffer actual contamination resulting in harm, courts are unlikely to find a controversy to be decided.

Similarly, the November 2012 report of USDA’s Advisory Committee on Biotechnology and 21st Century Agriculture (AC21) reflects the default position that non-GE farmers should bear the costs of GE contamination. The report proposes to allow organic and other non-GE farmers to buy a new type of insurance to protect against the economic risks of GE contamination. The report was harshly criticized by the National Organic Coalition (NOC) as allowing “USDA and the agricultural biotechnology industry to abdicate responsibility for preventing GE contamination while making the victim of GE pollution pay for damages resulting from transgenic contamination.”

The lesson here for producers of organic and specialty crops and seeds is that GE contamination is a real risk and, importantly, the law cannot be counted on to protect against such risk. While it may be possible to sue neighboring farmers after GE contamination has already caused harm, litigation is costly, time-consuming, and unpredictable. Farmers of premium-priced, non-GE crops must, therefore, take all feasible precautions to protect themselves from contamination and to insure against risks.

The “Monsanto Protection Act”

April 8, 2013

By Gabriela Agonstinelli

In the wake of California’s failed Prop 37 initiative, Americans once again have new fodder for the ongoing debate over GMOs (genetically modified organisms) and the politics behind them. A newly-passed appropriations bill has everyone buzzing, from food-centric grassroots groups to Tea Party activists, due to “blanket” protections it now affords GMO purveyors. In pertinent part, the new law known as the Monsanto Protection Act reads as follows:

Sec. 735. In the event that a determination of non-regulated status made pursuant to section 411 of the Plant Protection Act is or has been invalidated or vacated, the Secretary of Agriculture shall, notwithstanding any other provision of law, upon request by a farmer, grower, farm operator, or producer, immediately grant temporary permit(s) or temporary deregulation in part, subject to necessary and appropriate conditions consistent with section 411(a) or 412(c) of the Plant Protection Act, which interim conditions shall authorize the movement, introduction, continued cultivation, commercialization and other specifically enumerated activities and requirements, including measures designed to mitigate or minimize potential adverse environmental effects, if any, relevant to the Secretary’s evaluation of the petition for non-regulated status, while ensuring that growers or other users are able to move, plant, cultivate, introduce into commerce and carry out other authorized activities in a timely manner…

Section 735  has been interpreted as allowing farmers to continue harvesting and selling GMO crops even after a court has ruled that the USDA conducted inadequate review of those crops for market approval. Critics have swiftly dubbed the provision the “Monsanto Protection Act” for being “a special-interest loophole.”

Science!

It is imperative to note, however, that when a court makes this determination, it subsequently requires the USDA to go back and complete its review. Proponents of the provision insist it is only in this second review period that this harvesting/selling extension is permitted. This deflates the special interest argument a bit.

Still, the provision has an unmistakable air of deviousness to it. First, it is an anonymously authored provision. Secondly, nobody has been willing to admit to this contribution. Thirdly, the provision just happened to have been slipped into an incredibly vast forum – a huge omnibus spending bill.

Jon Entine, head of the Genetic Literacy Project at George Mason University, maintains the war being waged against § 735 is overblown. In addition to asserting that GMO technology has never been overturned by courts for being unsafe, he offers an explanation behind Section 735: “Getting approval for any transgenic crop or food is like running a torturous gauntlet, both arduous and bureaucratic.”

As Sen. Jon Tester of Montana has insisted, Section 735 boils down to a major “separations of power” dilemma. Here, we have a legislative document carving exceptions into regulatory (executive) protocols in an attempt circumvent judicial warnings. This provision is also a far cry from an attempt to support farmers while their crops are under review. Instead, as Tester suggests, “all it really assures is a lack of corporate liability.” The end result of Section 735 may be that the Secretary of Agriculture will be given a new executive power he or she would be unwilling to exercise due to the political consequences that will undoubtedly arise from its use. Hot air on both sides.