Courts adjudicating claims that food producers deceptively label their products “non-GMO” are starting to park the claims in the same lot to which many “natural” claims have been assigned. Both await government policy action that may be a long time coming, and that may or may not end up resolving the cases.
In a case filed in 2015, In re KIND LLC “Healthy and All Natural” Litigation, a consumer class accused KIND LLC, maker of KIND snack bars, of deceptively marketing its products as “natural” and as “non-GMO,” claiming that their tests found both artificial and genetically modified ingredients in the products. On March 2, Judge William Pauley of the Southern District of New York ruled on KIND’s motion to dismiss the “non-GMO” claim. Judge Pauley declined to dismiss the claim, but stayed that part of the case pending U.S. Department of Agriculture guidance. Such guidance was mandated by a 2016 law directing the USDA to establish by July 2018 a National Bioengineered Food Disclosure Standard. This law preempts any attempt by states to establish requirements as to food GMO labeling, but it also preserves state law causes of action for violations of the federal standard. So there is some logic to the court’s decision to wait until we find out what that standard is, and then litigate whether KIND complies with it.
Judge Pauley distinguished his decision from a recent Vermont case, Grocery Mfrs. Assoc. v. Sorrell, No. 14-cv-117 (D. Vt.), in which the plaintiffs voluntarily dismissed their claim after passage of the 2016 law. In that case, the plaintiffs had sued under a Vermont law that set forth explicit state regulations for disclosure of GMO foods, which was plainly invalidated by the 2016 federal law. In contrast, the KIND plaintiffs sued under general provisions of New York and California deceptive practices laws, which could still reach GMO labeling as long as plaintiffs do not attempt to impose an interpretation of them that is inconsistent with the eventual federal standard. The court’s reasoning checks out and is consistent with prior case law on FDA preemption of deception suits brought under state law, such as In re Farm Raised Salmon Cases, 173 P.3d 1170 (Cal. 2008) and Astiana v. The Hain Celestial Group, Inc., 783 F.3d 753 (9th Cir. 2015).
Previously, Judge Pauley in September 2016 had stayed the “natural” claim pending the completion of the FDA’s rulemaking process. The FDA announced in November 2015 that it would consider issuing long-requested guidance on what “natural” means as applied to foods, and solicited public comments through May 2016. Since then, the FDA has shown no sign of moving forward with rulemaking on “natural,” a point raised by the KIND plaintiffs in the recent motion, seeking to revive their “natural” claims. The court acknowledged both this and the fact that in 2017, the President issued an executive order that imposes new restrictions on agency rulemaking and may interfere with any plans the FDA may have to regulate “natural” labeling. Although the court did not lift the stay on “natural,” it limited the duration of the stay to match the stay it was ordering with respect to the “non-GMO” claims—both set to expire August 15, 2018—to give the USDA time to comply with the 2016 law. Both claims are thus parked in the same parking lot until the USDA acts, but at least the meter is now running on the “natural” claim.
Both parties got something, though less than they wanted, out of this decision. The plaintiffs’ claims survived, and the court sent strong signals that the “natural” part of their case may not be in permanent limbo. KIND didn’t get its dismissal, but it got a respite until August, by which time federal regulations may give it an easy win, at least on the “non-GMO” portion of the case. The big questions are (1) will the USDA really act by this summer? and (2) if it does, will the standard it promulgates resolve the plaintiffs’ claim?