GMO Labeling & Litigation Update 9/24/15 Food Advertising & Litigation Conference. Overview of Current Federal Requirements & Litigation Risk

Transcription

1 GMO Labeling & Litigation Update 9/24/15 Food Advertising & Litigation Conference Overview of Current Federal Requirements & Litigation Risk Jessica P. O Connell Covington & Burling LLP 1 Agenda FDA Position Current Labeling Designations Consumer Litigation Labeling Considerations 2 1

2 FDA Position 2001 Draft Guidance: Voluntary Labeling Indicating Whether Foods Have or Have Not Been Developed Using Bioengineering Updated policy from 1992 and responded to comments/input since that time 3 FDA Position Draft Guidance Genetically altered foods are not materially different from conventional foods Reaffirmed FDA s decision to not require special labeling of bioengineered foods in general 4 2

3 FDA Position Draft Guidance Voluntary labeling about presence or absence of bioengineered ingredients OK so long as not misleading Focus on terminology: Foods derived from plant varieties developed using rdna technology: bioengineered foods modification has a meaning broader than bioengineering 5 FDA Position Draft Guidance GMO Free Free could be misleading in relation to processed foods Consumers may assume free means zero, and FDA has not established a threshold May falsely imply that other unlabeled products are genetically engineered 6 3

4 FDA Position Draft Guidance Substantiation All claims should be substantiated to ensure they are truthful/not misleading Validated Testing Segregation/Recordkeeping National organic standards: would be sufficient 7 FDA Position Draft Guidance Examples of FDA Actions relying on Draft Guidance 2005 Warning Letters Industry letters 2008 Ingredient statement issues Informal communications Next steps from FDA? 8 4

5 Current Labeling Designations Non GMO Project Verified Widely used program Primary requirements: Supply requirements Input testing Traceability procedures/recordkeeping Segregation procedures/recordkeeping Inspections Finished product testing 9 Current Labeling Designations Non GMO Project Verified Labeling requirements Track FDA guidance re: use of Free Foods cannot bear GMO free or GE free claims Use of seal requires written approval Specific guidelines for certain ingredients 10 5

6 Current Labeling Designations USDA National Organic Program Requirements certified organic crops; certified organic livestock certified organic processed food processing/manufacturing controls FDA support as substantiation 11 Current Labeling Designations USDA National Organic Program NOT an explicit non GMO designation Standards differ in some ways from Non GMO Project Verified Use as basis for non GMO claim 12 6

7 Consumer Litigation Recent trends Consumer deception Labeling false or misleading due to GE related claim Labeling false or misleading because of natural claim and potential for GE ingredients Many claims settle at demand letter i.e., before they are public 13 Consumer Litigation Recent litigation Gallagher v. Chipotle (N.D. Cal. 2015) Farewell to GMOs G M Over it Campaign first to cook only with non GMO ingredients Lawsuit claims advertising deceives Chipotle customers 14 7

8 Consumer Litigation Recent litigation Richard v. Whole Foods Market (2014 Cal.) Specific to Blue Diamond almond milk products Consumer deception claims due to Non GMO Project Verified label Suit based on labeling, not based on presence of GMO ingredients 15 Consumer Litigation Recent litigation Cox v. Gruma Corp. (N.D. Cal. 2013) Based on all natural claim Defendant argued that FDA has primary jurisdiction over what is natural including GE ingredients Court asked FDA to address issue in FDA response declined to answer 16 8

9 Consumer Litigation Recent litigation Eggnatz v. The Kellogg Company (S.D. Fl. 2012) All natural claim for Kashi cereal 2015 settlement Pappas v. Naked Juice Co. (C.D. Ca. 2012) Non GMO claim for products containing soy protein isolate and soy lecithin 2013 settlement 17 Consumer Litigation More recent trends Certain targeted ingredients Soy based Corn based Preemption defense? 18 9

10 Labeling Considerations Issues regarding current claims Finished food product vs. single ingredient food Natural cross over Consumer understanding and expectations Qualification what does it mean? 19 Questions? 20 10

11 GMO Labeling and Litigation Update September 24 Food Advertising & Litigation GMO LABELING LEGISLATION & LITIGATION KARIN MOORE SVP & GENERAL COUNSEL GROCERY MANUFACTURERS ASSOCIATION 21 GMO Labeling: Federal Legislation 11

12 GMO Labeling: Federal Legislation Key Points of Safe and Accurate Food Labeling Act of 2015 Mandatory premarket notification for bioengineered organisms Voluntary framework within FDA jurisdiction for labeling the presence or absence of bioengineered organisms Voluntary Non GMO label certification program through USDA Federal preemption of GMO labeling and natural claims 12

13 Preemption Provisions Creates a national, uniform system for labeling bioengineered and non bioengineered foods Preempts any state or local laws regarding whether a food has been bioengineered that is not identical to the federal program Notable National & Regional Media Mentions 13

14 Is the tide turning? USDA Process Verified Program PVP certifications have been conducted for years under general USDA authority. SunOpta: first time the PVP process has been used to determine non GMO certification

15 PVP: What it is Fee for service basis USDA conducts audit and certifies compliance with the standards provided by the company Determines if process supports the claims being made. Examples: antibiotic free meat, grass fed beef PVP: What it is not It is not a non GMO standard It is not a non GMO label USDA does not determine if one standard is better than another USDA does not regulate the claim being made USDA does not approve thresholds for claims 15

16 GMO Labeling: State Legislation State Labeling Activity 4 ballot initiatives defeated in California, Washington, Oregon, Colorado 3 states have laws on the books Maine, Connecticut, and Vermont Maine & Connecticut are conditional on contiguous states passing similar laws (Maine bill would remove conditional provision) Vermont becomes effective in summer of

17 State Labeling Activity January August 2015 AK WA OR NV CA ID AZ UT MT WY CO NM ND MN SD WI NE IA IL KS OK MO AR MS TX LA MA MI PA OH IN WV NC TN SC AL GA VT NH ME ME RI CT NJ DE MD FL HI Labeling Laws Enacted 2015 Legislation Defeated, Withdrawn or Held 2015 Legislation Pending Ballot Measures Defeated

18 Vermont Act 120 & Consumer Protection Rule 121 Requires all processed food with GMO ingredients to label: Produced with genetic engineering, Partially produced with genetic engineering, or May be produced with genetic engineering Retailers not responsible for compliance Bans Natural on foods with GMOs $1,000 per day penalty per uniquely marked product Holds manufacturer not retailer liable 35 Vermont Act 120 & Consumer Protection Rule 121 Broad exemptions Alcohol Products from animals fed GMO crops Dairy, including cheese produced with GMO enzymes All products with a USDA approved label Effective date: July 1,

19 It s Complicated Vermont Law Complicating Factors Nutrition Facts Panel Determining which products to label, using may be partially produced requires Wrong label = liability and misbranding. Regulations on the where, what, and how just became final. Ability of private parties to sue is unclear. Diversion from other states. No intent requirement. No retailer liability (except private label products). Guidance needed from state: small packages, food service, vending machines, recordkeeping... 19

20 Vermont Law Complicating Factors 35 States have had some form of legislation, and every single one is different: Different definitions of what GE is Different exemptions Different thresholds for labeling (0 to.9%) Different wording on the package Different liability GMA, et al. v. Sorrell GMA, NAM, SFA, IDFA vs. State of Vermont Complaint filed on June 12, 2014; oral argument on Jan 7, 2015; Decision on PI on April 27, nd Circuit Oral Argument scheduled for October 8. 20

21 GMA, et al. v. Sorrell First Amendment Claim: GMA Argument: GMO disclosure compelled commercial speech supported only by consumer curiosity Compelled disclosure subject to intermediate, scrutiny VT has no substantial government interest in requiring disclosure because GMOs no different than non GMOs VT Response: VT law requires only a factual, non controversial disclosure Compelled disclosure permitted so long as rational basis supports law Consumer deception, and questions on environmental and health effects of GMOs, IARC glyphosate: provide rational basis 41 Vermont PI Decision GMA s Motion for Preliminary Injunction DENIED. Applying the preliminary injunction standard, the court held that certain of our claims are likely to succeed on the merits and allowed other claims to move forward. BUT, the court found that GMA did not prove irreparable harm, a required element at the preliminary injunction stage, so it refused to stay implementation of the law. # 21

22 Vermont PI Decision The court DENIED the State s motion to dismiss these claims: Mandatory GE label violates the First Amendment under intermediate scrutiny Ban on the word natural or words of similar import in advertising violates the First Amendment Natural restriction is void for vagueness in violation of First and Fifth Amendments Natural restriction on advertising violates the Dormant Commerce Clause GE label is partially preempted by the Federal Meat Inspection Act and Poultry Products Inspection Act # Status Oral Argument before the U.S. Court of Appeals for the Second Circuit October 8 Standard of Review under First Amendment Commercial Speech Zauderer or Central Hudson Whether PI should have issued District Court proceedings are proceeding 44 22

23 Questions? 23