Mar 02

Food Labeling Litigation in 2016: The Sun Never Sets

May27-Trapp-Burlington - 306This past September, I blogged about the brewing battle over Vermont’s controversial GMO labeling law (“Act 120”), which was approved May 8, 2014 and is scheduled to take effect July 1, 2016. Since then, not only has the Vermont GE controversy taken on national and constitutional implications, but analogous food labeling disputes in both other states as well as in Congress have kept the food industry a landscape on which the litigation sun shows no signs of setting in 2016.

First, as explained in my September post, Act 120 made Vermont the first state to require foods with genetically engineered (“GE”) ingredients to be labeled in a “clear and conspicuous” manner that they are “produced with genetic engineering” or “partially produced with genetic engineering” — unless the manufacturer can prove otherwise. 9 V.S.A. § 3043. Under Act 120, language such as “natural,” “naturally made,” “naturally grown,” “all natural,” “or any words of similar import that would have a tendency to mislead a consumer” may not be used on foods produced with genetic engineering. 9 V.S.A. § 3043(c). Vermont’s law applies to “manufacturers” – a term defined to include persons who sell “a processed food or raw agricultural commodity under its own brand or label for sale in or into the State.”

After Act 120’s passage, various interest groups mounted a sustained attack on the law, perhaps the most talked-about being that in Grocery Manufacturers Association, et al. v. Sorrell, et al., No. 5:14-cv-117, D. Vermont) where the Grocery Manufacturers Association (“GMA”) and co-plaintiffs’ claims allege: (1) Act 120’s GE disclosure requirement violates the First Amendment; (2) Act 120’s “natural” restriction violates the First Amendment; (3) Act 120’s “natural” restriction is impermissibly vague in violation of the First and Fifth Amendments; (4) Act 120 violates the Commerce Clause; and (5) Act 120 is preempted by various federal statutes. Given that plaintiffs are suing defendants for actions under color of state law, plaintiffs also allege a a Fourteenth Amendment violation with respect to each claim.

In April 2015, the industry groups had a partial win in Sorrell when a federal court denied Vermont’s motion to dismiss and said that the plaintiffs’ First Amendment, Federal Meat Inspection Act, Poultry Products Inspection Act and commerce clause claims could proceed to trial.  However, the court denied the plaintiff food groups’ request for a preliminary injunction (“P.I.”) to delay implementation of Act 120.” Plaintiff food groups appealed the P.I. ruling to the U.S. Court of Appeals for the Second Circuit, as discovery proceeded in the underlying case in the federal district court – in a race against the November 24, 2015 fact discovery deadline.  That discovery rodeo showdown has included, among other things, Vermont’s third-party subpoenas (“Vermont Subpoenas”) to 17 food industry companies (nearly all of whom are GMA members) for documents such as “all communications concerning any individual or institutional grant recipients relating to research on the broad topics of ‘genetics and biotechnology’ or herbicides and pesticides used on genetically engineered crops.”

So what’s happening now, and what’s next?

Well, while my personal crystal ball on selection of winning Powerball numbers is clearly not as spot-on as its capabilities with respect to food labeling future events (no, you did not miss my name among January’s winners . . .), several post-Sorrell trends on which I commented in my September blog are coming full circle:

(1)        Lengthy Litigation:  Last Autumn, I opined that “without a preliminary injunction victory, a loss here for the food industry will embroil the interested parties in probable years of protracted and expensive litigation, including marshaling of expert witness testimony and scientific evidence about the purported harms from GMO products and the prophylactic effects of GMO labeling to inform consumers’ decision-making.”  (Cue sound effects of slow tick-tock of time passing.)  And so, like the sands in the hourglass, so are the days of food labeling litigation.

Specifically, GMA is fighting the Vermont Subpoenas as overbroad, “well beyond the limited scope of discovery” that the parties had previously discussed, and an impermissible extension of the November 2015 fact discovery deadline. Vermont maintains that the November 24 deadline should not foreclose the subpoena responses, as doing so would only permit the third-party companies to “run out the clock” and escape their discovery duties to respond to Vermont’s October subpoenas. Countering Vermont’s position, GMA argues that defendant’s insistence on post-November responses is inconsistent with “ . . . case precedent that the state can continue efforts to extract discovery from third parties long after the close of discovery, as long as the initial requests were merely served during the fact discovery period.”

So, as we read the tea leaves back in September (food pun intended), failing to have that preliminary injunction in hand has indeed launched lengthy litigation.  In fact, the parties are not even out of the discovery starting gate, let alone the race of actual labeling claim litigation and battles of GMO experts.  Therefore, if you’re watching Sorrell from the sidelines, grab some leftover treats from last month’s National Snack Month celebration and settle in for some binge watching (yes, food pun again intended).  This one is going into overtime, folks.

But stay alert for some surprising plays on the field.  On February 23, the GMA and Vermont jointly asked the federal district court to adjourn their April 29, 2016 trial date until May 31, 2016.  The parties’ joint filing seeks trial date delay, suspension of remaining discovery completion dates, and adjournment of motion filing deadlines until the Second Circuit decides the food groups’ interlocutory appeal of the district court’s summary judgment ruling.  In their joint submission, the GMA and Vermont stated that “parties agree that their completion of expert discovery and preparation for trial would benefit substantially from an opinion by the Second Circuit on the legal issues at the heart of this case . . . Good cause supports suspending discovery and motions deadlines because it will allow the parties to tailor their preparation of the record to address the burdens and standards the Second Circuit articulates in resolving the pending appeal and, in turn, enhance the efficiency of the court’s consideration of the case.”

Food labeling litigation makes strange bedfellows.

(2)        A Future Kaleidoscope:  Last Autumn, I also suggested that “[w]ithout a preliminary injunction victory, a loss here for the food industry could embolden other states to follow trailblazer Vermont . . . [T]he import of this follow-the-leader risk for the food industry goes beyond just numbers. It creates the risk of a ‘patchwork’ of inconsistent state regulations.”  It turns out that GMO isn’t the only color permutation possibility in the 50-state food law kaleidoscope patchwork.  Soon there could be other salt rubbed into the wounds of a food industry hungry for national consistency.

Pun intended.

This past December, the National Restaurant Association (“NRA”) sued New York City (“NYC”) over the Board of Health’s unanimous regulation passed on September 9, 2015 that aims to stem sodium-related health conditions. (National Restaurant Association v. The New York City Department of Health and Mental Hygiene et al., No. 654024/2015, Supreme Court of New York, New York County). Under the new rule, chain restaurants in NYC with 15 or more locations nationwide are required to post – by March 1, 2016 – a salt shaker icon next to items containing 2,300 milligrams or more of sodium (approximately 1 tablespoon of salt), while notifying customers that eating more than the daily recommended intake can increase blood pressure and risk of heart disease and stroke.  The NRA attacked the city’s sodium warning rule as “riddled with arbitrary and capricious exclusions and exemptions,” in violation of New York state law.  On February 24, 2016, New York State Judge Eileen Rakower not only rebuffed the NRA’s effort to block the sodium regulation but also rejected the NRA’s efforts to analogize the sodium warning rule to former Mayor Bloomberg’s unpopular “big soda ban,” with the Court opining: “I believe information is power.  This is not like the soda ban case.  In this case, we are providing information. Make a different choice if you want to.”  Vowing to appeal, the restaurant group criticizes the sodium rule as a violation not only of separation of powers (since it was drafted without input from the City Council) but also of the restaurants’ First Amendment rights (since it mandates certain disclosures on menus). NYC’s Health Department, on the other hands, cites the City charter that expressly permits food supply regulation; the Department also views the sodium rule as complementary of the federal government’s food information regulations.

As most recently as yesterday, both sides were still rubbing the salt into the other’s wounds.  In a unique way of celebrating Leap Day, the NRA leaped headfirst back into the fray as it persuaded a New York first department appellate court to temporarily stay the sodium rule – i.e., one day before the rule’s March 1 effective date. The temporary stay will remain in effect until the appeals court considers the NRA’s February 29 preliminary injunction motion.

Besides the question of whether New York City’s sodium disclosure rule will remain on the Big Apple’s books in the long run, one should also query whether that City’s sodium regulation is but the first one to pepper the national landscape.  Is New York City’s sodium content disclosure rule merely the predecessor to other cities’ or states’ own local efforts, as the national kaleidoscope of food labeling receives another twist?  Will sodium disclosure laws follow the lead of Vermont’s Act 120 that began the patchwork quilt of GMO labeling laws?

(3)        Congressional Trump Card: Last Autumn, I also posited that the DARK Act (Denying Americans the Right to Know, H.R. 1599) could moot Sorrell since DARK would preempt states from requiring labeling of GMO food. Critics had complained that DARK would make it impossible for the FDA to create a national GMO labeling system.

First, it was GMO labeling with the DARK Act; now, it’s menu calorie counts with the CSNDA. . . Congress is at it again, scaling back FDA’s attempted food industry “uniformity” (or, “impossible conformity,” depending on which side of the supermarket aisle you sit):

Last month, the House of Representatives passed H.R. 2017 (the Common Sense Nutrition Disclosure Act) (“CSNDA”), which would ease the FDA’s pending November 2014 menu labeling rule that, among other things, requires restaurants and similar retail food establishments (that are part of a chain with 20 or more locations doing business under the same name and offering for sale substantially the same menu items) to provide calorie and other nutrition information for standard menu items, including food on display and self-service food. The current deadline for compliance with the pending menu labeling rule would be December 1, 2016.  CSNDA proponents, however, have attacked the menu labeling rule as inflexible and burdensome.  In derogation of CSNDA, H.R. 2017 would, for example: (1) give food sellers more flexibility (such as menu disclosures (a) via one “primary” in-store menu or (b) via “remote access” such as websites for food sellers whose customers primarily place their orders from outside the premises); (2) provide outright menu and advertising disclosure exemptions; (3) permit “reasonable” calorie disclosure variations to allow for meal preparation, serving size or ingredient changes; (4) eliminate potential criminal penalties; and (5) allow for a 90-day error-correction penalty-free grace period.  The White House administration is not pleased: “H.R. 2017 would undercut the objective of providing clear, consistent calorie information to consumers. If enacted, it would reduce consumers’ access to nutrition information and likely create consumer confusion by introducing a great deal of variability into how calories are declared. The legislation also would create unnecessary delays in the implementation of menu labeling.”

So, while many manufacturers and sellers in the industry have bemoaned the FDA’s refusal to get involved in several instances (e.g., FDA refusal to define the term “natural,” which many have cited as fueling the fire of consumer fraud food labeling class actions over the past five years), those same companies are probably lamenting the instances when FDA has elected to step in to the fray, as the FDA menu labeling rule has been roundly criticized as burdensome, costly and inconsistent.   In the Congress vs. FDA poker game, the food industry awaits who will play the winning hand.


Third-party food company subpoenas, federal appeals, GMO, salt, local disclosure regulations, FDA, Congress . . .

To borrow a phrase attributed to Xerxes in Herodotus’ Histories, food labeling is a litigation “empire on which the sun never sets.”

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