Labeling genetically modified food: regulation via litigation is back

October 16, 2013

Fifteen years ago, when trial lawyers were flush with cash from representing state attorneys general in their global $365 billion settlement with the tobacco industry, the phrase “regulation through litigation” was much in vogue. On the plaintiffs’ side, it was a rallying cry, a call for lawyers to use the tactics of the tobacco litigation – including their partnership with state regulators – to accomplish societal goals, such as reducing gun violence or cutting carbon emissions. Tort reformers, meanwhile, sounded alarms about ceding policy-making to unelected lawyers driven by their own potential profits. Despite the fervor on both sides, regulation through litigation turned out to be more of a slogan than a reality as ambitious cases against, for instance, gun- and lead- paint makers faltered.

But suits over food companies’ labeling of genetically modified ingredients may prove to be a rare example of litigation forcing industrywide change, even as the federal government dithers on policy.

Last week, Frito-Lay’s lawyers at Gibson, Dunn & Crutcher filed an answer to a consolidated class action complaint in multidistrict litigation over Frito’s allegedly misleading use of “all natural” labeling on products that contain genetically modified corn. Like their defense counterparts in similar bioengineered food labeling litigation against Conagra Foods and Campbell Soup, the Gibson lawyers insisted that consumer claims should be barred by the “primary jurisdiction doctrine,” which says that courts must wait for federal agencies to apply their regulatory expertise before hearing claims in litigation. Food industry lawyers contend that it’s premature for judges to consider class actions over bioengineered food labeling because the Food and Drug Administration has not issued binding policy on whether genetically modified ingredients are “natural” (or, for that matter, on any definition of “natural” in food labels).

Three federal judges, however, have ruled in recent months that they’re not willing to wait for the FDA. In August, U.S. District Judge Margaret Morrow of Los Angeles denied Conagra’s motion to stay a class action over bioengineered corn in Wesson Oil, finding that there’s no guarantee the FDA would clarify its position if she waited six months. U.S. District Judge William Dimitrouleas of Miami reached the same conclusion on Campbell Soup’s motion to reconsider his previous refusal to refer a question to the FDA. Finally, U.S. District Judge Roslynn Mauskopf of Brooklyn, who is overseeing the Frito MDL, offered a cogent explanation of why Frito’s request for a stay and referral to the FDA wouldn’t make a difference in the class action: “There is no telling, if it even chose to respond with any directive to the court’s referral, how the FDA would define the term, and whether its definition would shed any further light on whether a reasonable consumer is deceived by the ‘All Natural’ food label when it contains bioengineered ingredients,” Mauskopf said. “Moreover, the FDA is unlikely to respond in a timely manner to any referral from this court.” (I should note that at least two other federal judges, including U.S. District Judge Yvonne Rogers in a San Francisco federal court case involving all-natural labeling on tortilla chips made with genetically modified corn, have granted defense requests for stay orders and referrals to the FDA.)

In the Frito case, Mauskopf, like her colleagues Morrow and Dimitrouleas in the Conagra and Campbell class actions, permitted some consumer mislabeling claims to proceed. (She dismissed all claims against Frito’s parent, federal warranty claims and some state consumer-law claims.) Frito’s answer last week to the complaint raised more than a dozen additional affirmative defenses that have also been cited by the other bioengineered food defendants, including federal preemption of the consumers’ state law claims, standing challenges to the name plaintiffs and a sweeping argument that reasonable consumers could not have been deceived by Frito’s labels. Frito, Conagra and Campbell may yet make these class actions go away, or may at least whittle them down at the class certification stage, which none of the cases have yet reached. If not, Frito itself warned of the consequences in its reply to the plaintiffs’ brief opposing dismissal: The “floodgates of civil liability” will be opened.

That expanded litigation risk would dovetail with agitation in the states for more disclosure of genetically modified food ingredients. In November, Washington is holding a statewide referendum on whether to require such labeling. A similar ballot initiative failed last year in California, but Connecticut and Vermont lawmakers are pushing through state legislation on GMO disclosure.

Piecemeal state legislation, however, won’t force industrywide change. A binding FDA policy requiring disclosure of genetically modified ingredients would, but as Judge Mauskopf detailed in her opinion in the Frito case, the FDA has assiduously avoided a hard-and-fast definition of what makes food “all natural” since 1991. The agency first issued a statement on bioengineered food in 1992, emphasizing the safety of genetically modified products and advising that the growing method need not be disclosed. It reaffirmed that guidance in 2001, and its current policy, according to Mauskopf, “remains that labeling a food to indicate that it contains bioengineered ingredients is voluntary.” According to Judge Morrow in the Conagra class action, the FDA did hint in August that it is evaluating its policy on bioengineered products, but there’s not hard evidence that binding policy is forthcoming. Meanwhile, U.S. Senator Barbara Boxer (D-Calif) is pushing for a federal law directing the FDA to require food companies to label products containing genetically modified ingredients, but as USA Today has reported, similar bills have been kicking around Congress for years.

So in the absence of federal labeling requirements, what could make food companies change their minds about labeling of genetically modified ingredients? You know the answer: exposure to consumer claims in civil litigation. That’s why the Conagra, Campbell and Frito cases could be so consequential. I don’t know if interim Frito class counsel from Milberg and Reese Richman have in mind broad policy goals on bioengineered food, and they didn’t return my calls requesting comment. But if they and their counterparts in the Wesson Oil and Campbell Soup litigation manage to certify big classes of people who’ve bought allegedly mislabeled products, there will be intense pressure on defendants to settle – and similar class actions will swamp dockets.

There’s considerable debate about the pros and cons of disclosing bioengineered ingredients on food labels. The eminently reasonable folks at Scientific American, for instance, argued last month that genetically modified products are no more a manmade creation than products that are the result of age-old, conventional breeding techniques, so labeling would unnecessarily frighten consumers and make food more expensive. I don’t know enough about bioengineered food to have an informed position, but I’m always intrigued when plaintiffs lawyers preempt federal rule-making.

Frito counsel Jason Meltzer of Gibson Dunn declined to comment.

(Reporting by Alison Frankel)

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