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California food labeling Archive

California’s Prop 37, GMO Labeling, Part 4

September 28, 2012

Lauren Handel is back to conclude her series on California’s Proposition 37, today addressing the real logistical challenges businesses will face when the time comes to comply with this law.

If Prop 37 passes (which, according to a recent poll, seems likely), and if it is not stayed or struck down by the courts, manufacturers, retailers, and distributors of food sold at retail in California will have to make some significant and potentially costly changes to ensure they comply by July 1, 2014.

The most obvious implication of Prop 37 is that food labels and retail displays will have to be changed for many foods sold at retail in California. It has been reported that 60 to 70 percent of processed foods sold in U.S. grocery stores contain at least one genetically-engineered ingredient. Because the vast majority of corn, soybeans, and sugar beets produced in this country are genetically engineered, chances are that any product made with an ingredient derived from those crops would come within Prop 37’s labeling requirement.

These are the basic components of virtually every food there is to eat on supermarket shelves. Almost all products would have to be re-labeled on the front or back of the package with the required language, “Partially Produced with Genetic Engineering” or, to the extent the manufacturer is uncertain about whether the product contains genetically-engineered ingredients (or cannot document that it does not contain genetically-engineered ingredients), with the words “May be Partially Produced with Genetic Engineering.”

Food makers will have create special labels for those products destined for the California market, or make California-compliant labels for all products meant for nation-wide distribution.

In addition, for all processed foods—except those that are certified organic, that are derived entirely from a non-genetically-engineered animal, and alcoholic beverages—any language stating or implying that the product is “natural” would have to be removed from the label. As of July 1, 2014, if a retailer has products in inventory that are not properly labeled, they would have to be removed from the shelves and could not be offered for sale to consumers.

In order to enforce the labeling provisions, Prop 37 would impose extensive recordkeeping obligations. Based on the text of Prop 37, any food producer or marketer who wants to avoid labeling their products as genetically engineered (or as potentially containing genetically-engineered ingredients) would have to generate and maintain extensive records to document that their products have not been intentionally produced with genetic engineering. That is because the law would presume that foods have been produced with genetic engineering unless the manufacturer and everyone else responsible for complying with Prop 37—i.e., everyone in the supply chain from the manufacturer to the retailer—obtains a sworn statement from their direct supplier attesting that the food or ingredient has not been knowingly or intentionally genetically engineered and that it has been segregated from food that may have been genetically engineered. So, even if a manufacturer has no reason to believe that its product is made with genetically engineered ingredients, to avoid labeling the product “May be Partially Produced with Genetic Engineering,” the manufacturer would have to obtain an affidavit from each of its ingredient suppliers, maintain those records with some tracking system linking affidavits for particular lots of ingredients to the batches of finished products produced with those ingredients, and provide a similar affidavit to its customer which would have to do the same thing until the product reaches the retailer.

Presumably, by regulation, the California Department of Health could limit some of the recordkeeping burdens by carving out entire categories of foods that would not have to comply with Prop 37’s labeling requirements because no genetically-engineered variety exists in the marketplace (for example, most whole fruits and vegetables) or because the ingredients used in the food (perhaps, as defined by a regulated standard of identity) are not genetically engineered. However, such exemptions would not apply to products made with ingredients derived from corn, soybeans, sugar beets, canola or other crops that are likely to have been genetically engineered or commingled with genetically engineered crops.

Although violations of Prop 37’s requirements would be difficult to police, the consequences for noncompliance would be serious. Foods offered for retail sale in California that do not comply would be deemed “misbranded.” It is illegal to manufacture, sell, offer for sale, store or deliver “misbranded” food. Violators are subject to criminal or civil prosecution, and the product may be seized or embargoed by the state. Violations of Prop 37’s requirements also would be deemed “unfair or deceptive acts” in violation of California’s Consumer Legal Remedies Act, which permits private citizens to sue individually or through a class action for compensatory damages, injunctions, and punitive damages. Significantly, to bring such a suit, plaintiffs would not have to show that they had been damaged by or relied on the defendant’s allegedly deceptive label. Prop 37 also would allow private citizens to sue violators under the Health and Safety Code for injunctions and, if successful, for their costs incurred in investigating and prosecuting the action.

– by Lauren Handel

California’s Prop 37, GMO Labeling, Part 2

September 26, 2012

Regulating food is never simple. Here again with some insight on California’s Proposition 37 is Lauren Handel, our newest contributing food law attorney. Without regard to the policy arguments for or against GMO labeling, which are approaching hyperbole on either side of the debate, Lauren addresses the policy-neutral issues this law may face if passed by the people of California. Today, it’s Free Speech (didn’t see that coming?), and tomorrow it’ll be doctrine of Federal Preemption. 

Regardless of the policy merits of their position, opponents of Proposition 37 have a valid point that the referendum will be unconstitutional on the grounds that it infringes on freedom of speech protected by the First Amendment.

The First Amendment not only limits government’s power to prohibit speech; it also limits government’s power to compel speech.  Prop 37 would regulate speech both by prohibiting certain statements—that foods are “natural” if they have been produced with genetic engineering or processed in any way—and by compelling certain statements—that products are “Genetically Engineered,” “Partially Produced with Genetic Engineering” or “May Be Partially Produced with Genetic Engineering.”

From a First Amendment standpoint, Prop 37’s prohibition on “natural” claims is its most problematic provision.  To defend that part of the law, California would have to establish that it has a substantial interest in protecting consumers from being deceived by “natural” claims and that the prohibition directly serves the state’s interest without overly infringing on speech.  With regard to genetically-engineered products, there is at least some reason to think that “natural” claims confuse consumers and cause them to believe products are not genetically engineered.  (Remember the Kashi story?)  And many lawsuits have been brought (for example, against Snapple and General Mills) alleging that “natural” claims are deceptive when products contain highly processed ingredients, such as high fructose corn syrup.  However, it is utterly implausible that a ban on “natural” claims is necessary to prevent consumer confusion with regard to minimally processed, traditional foods that most people would think of as natural—including non-genetically-engineered canned, cooked, or frozen foods containing no artificial ingredients.  In that regard, Prop 37 goes too far.

Prop 37’s requirement to compel disclosure statements identifying genetically-engineered foods has a somewhat better chance of withstanding a First Amendment attack.  The government may compel purely factual  disclosures to consumers for purposes of preventing consumer deception.  The disclosures required by Prop 37—simple statements indicating that the product is genetically engineered—are factual in nature.  But there is room for debate as to whether the disclosures serve the state’s interest in preventing consumer deception.

Opponents of Prop 37 will argue that consumers cannot be deceived by the absence of a “genetically engineered” label because genetically-engineered foods are deemed not materially different than their traditional counterparts.  In fact, it is the policy of the federal government, as determined by FDA, that genetically-engineered foods are not materially different than traditional foods and, therefore, labeling  is not needed to prevent consumer deception.  If there is no material difference between genetically-engineered foods and traditionally-produced foods, the opponents of Prop 37 will argue, the law would serve only an interest in satisfying consumer curiosity.  But the interest in consumer curiosity, by itself, has been held by one federal appeals court to be insufficient to support a law compelling commercial speech—in that case, a Vermont law requiring labeling of dairy products produced with synthetic hormones.

To defend Prop 37’s disclosure requirement, California will have to convince the court that the provision is related to the government’s interest in preventing consumer deception (as opposed to merely gratifying curiosity) or that it directly serves another substantial state interest, such as an interest in protecting human health or the environment.  Given that science has not proven genetically-engineered foods to be dangerous, it may be difficult for California to establish that Prop 37’s disclosure requirement serves a legally-recognized, substantial state interest.  At the heart of the matter will be a dispute about whether the state has a legitimate interest in protecting consumers’ “right to know” how their food has been produced.  That Americans overwhelmingly support labeling of genetically-engineered foods indicates that they believe they should have such a right; but, so far, it has not been recognized by the courts.

I predict that if Prop 37 passes, the lawsuit challenging it will contain a First Amendment Element.

by Lauren Handel