And it’s following a familiar path: First, it’s growing fast, as marketers sense a significant business opportunity; and second, it lacks a uniform federal definition, laying manufacturers open to consumer fraud class actions arguing that ‘reasonable consumers’ understand GMOs more broadly than manufacturers do.
The result of these two factors? A recipe for industry heartburn.
Specifically, as the Chipotle Mexican Grill, Inc. experience has illustrated in four cases - and two with inconsistent rulings - since summer 2015 (Gallagher v. Chipotle Mexican Grill, Inc., No. 15-CV-3952; Reilly v. Chipotle Mexican Grill, Inc., No. 1:15-cv-23425; Pappas v. Chipotle Mexican Grill, Inc., No. 3:16-cv-00612; and Schneider v. Chipotle Mexican Grill, Inc., No. 16-cv-02200), at least two significant questions about GMO ingredient sourcing that legislators and courts have not yet answered are stirring the pot for cookie cutter consumer lawsuits:
- Does GMO feed given to animals from which meat or dairy products are then made in turn then indelibly convert such meat and dairy products into ‘GMO foods’?
- Can beverages qualify as ‘non-GMO’ if their ingredients were sourced from items such as GMO corn syrup?
Inconsistent court rulings
Do the roots of the GMO tree (metaphorically speaking) extend so far down into the ingredient sourcing soil that all of the ‘fruit’ of the ‘tree’ thus qualifies as GMO, too?
The Gallagher complaint – largely the cookie cutter mold from which subsequent suits have followed – averred that “Chipotle serves meat products that come from animals which feed on GMOs, including corn and soy. Chipotle’s tacos and burritos are also usually served with sour cream and cheese from dairy farms that feed animals with GMOs. And, Chipotle sells soft drinks that are made with corn syrup – a GMO.”
The Gallagher court granted Chipotle’s motion to dismiss in part because plaintiff’s website concession “means that no reasonable consumer could be deceived.” (That said, the plaintiff has attempted to cure those defects by filing a first amended complaint. So, don’t close the book yet.)
However, the Reilly court found that plaintiff had offered enough evidence to show that some consumers and legislators think that ‘non-GMO’ means the feed given to animals from which such food is manufactured must also be non-GMO.
So, where does the industry G-M-O from here?
As we await rulings (or settlements?) in these lawsuits, there are a number of key takeaways not only for food manufacturers confronting GMO issues but also for the food industry (and their counsel and marketing departments) generally:
TRANSPARENCY, TRANSPARENCY, TRANSPARENCY: The Gallagher court ruled that Chipotle’s website disclosure of how it defined GMO for its menu purposes meant that “no reasonable consumer could be deceived.” In Pappas, Chipotle has again pointed to those website disclosures in fighting consumer deception claims.
The takeaway here? Ingredient and manufacturing process disclosures to the public could arguably help food defendants’ arsenals of litigation prevention and/or lawsuit defense in these cases . . .
This could have both legal and public relations upsides: (a) Website, print media, radio ad, and TV commercial disclosures could help defendants’ opposition to class certification. Specific yet varied disclosures could create individualized issues of fact as to whether, when and which disclosures members of the class saw or heard.
When individualized fact issues overwhelm classwide ones, certification should not be granted under civil procedure rules; and (b) transparent disclosures to the public typically translate into valuable goodwill.
COMMUNICATION IS KEY: Before stamping ‘GMO-free’ on a food product, food companies would do well to confirm all stages of their ingredient sourcing, including (at least for now) the feed given to the chickens and livestock used for their food products, since the Reilly court ruled that plaintiff’s false advertising claim could proceed even though she had not alleged which particular Chipotle product she had bought.
In other words, Chipotle’s alleged misrepresentation itself about GMO-free was enough to keep plaintiff’s claim alive; her purchase based on the non-GMO representation was sufficient for her claim to proceed, and injury from the purchase was unnecessary.
CERTAINTY FROM CERTIFICATION? NOT SO FAST . . . While there is yet no federal definition of non-GMO ingredients, some independent verification agencies offer GMO certification for food products, which, at least theoretically, gives manufacturers the option of invoking a defensible shield of non-GMO product certification for labels on their food packaging and advertisements.
However, the lack of consistency among these third party verifiers means that not all verifications are created equal:
Eurofins: For food products to be 'non-GMO' according to Eurofins: ingredients or additives derived from GM plants may not be used; additives, vitamins, amino acids, flavorings or enzymes which were produced with the help of GMOs may not be used; and unintentional or technically unavoidable GMO intermixtures contained in food products which are above the technical limit of detection of 0.1% are not permitted.
The Non-GMO Project: Offering independent verification of testing and GMO controls for products in the U.S. and Canada, The Non-GMO Project offers a ‘Verified’ seal that assures a product has been produced according to best practices for GMO avoidance throughout the supply chain and production (pre-planting, harvesting, and processing), including testing of risk ingredients and stopping the source(s) of GMO contamination – most of which occurs at the seed level.
Its website expressly states that 'Verified' does not mean 100% non-GMO because “the risk of contamination to seeds, crops, ingredients and products is too high to reliably claim that a product is ‘GMO free.’" The Non-GMO Project typically disqualifies products if GE is involved in any stage in a food product’s production. Non-GMO Project’s tests must indicate that the ingredient is below 0.9% GMO.
Vermont’s Act 120: As I have previously discussed, Vermont’s Act 120 that takes effect July 1, 2016 requires foods with GE ingredients to be labeled by manufacturers (i.e., any person selling processed or raw foods for sale into Vermont) 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 9 V.S.A. §3044, certain foods are exempt from the labeling requirement, including meat or milk from animals fed GMO feed.
The Safe and Accurate Food Labeling Act of 2015: This statute (referred to by critics as the 'DARK Act'), which passed in the House on 07/23/15 and is pending in the Senate, proposes a voluntary 'non-GMO' labeling system run by the USDA that would allow food to be so labeled if it is made with GE processing aids or from animals given GMO feed or GMO drugs.
The USDA’s Process Verified Program: USDA’s PVP is a quality management program that verifies a company’s own requirements, such as non-GMO. “Companies with approved USDA Process Verified Programs are able to make marketing claims associated with their process verified points such as source, feeding practices, or other raising and processing claims and market themselves as ‘USDA Process Verified.’”
The PVP for non-GMO products has no standard or definition for what is non-GMO.
NSF’s Non-GMO True North standard: NSF’s True North Non-GMO program incorporates elements from the EU and Vermont GMO labeling requirements. Companies must meet a 0.9% GMO threshold for finished products (5% for feed). For dairy products, milk cows must be fed non-GMO feed a minimum of 30 days prior to first certified milking and thereafter. True North requires risk assessment-based unannounced audits and chain of custody sampling. It also accepts organic certification as evidence of compliance, consistent with Vermont's GMO labeling regulations.
What is non-GMO? It depends…
In short, just like the amorphous and undefined term ‘natural,’ the meaning of ‘non-GMO’ depends on whom one is asking. For example, if a manufacturer’s food product has no GMO plant ingredients but contains milk from cows given GMO feed, that product would qualify as non-GMO by Eurofins, but not by The Non-GMO Project; Vermont’s Act 120 (that exempts animal feed) would be inapplicable to that same product, which might even qualify for Non-GMO labeling. True North allows for some animal feed, making it situation-specific.
The bottom line?
Making GMO-free claims (without a third-party certification) on food products (especially dairy or meat) places manufacturers at risk of lawsuits not only because of the varying interpretations of ‘GMO’ but also because of the likelihood of GE ingredients and/or processes entering production at any stage of the ingredient supply and manufacturing stream.
If the Chipotle GMO class action story has yielded one certain conclusion, it’s that we are likely to see history repeating itself again and again in Gallagher-Reilly-Pappas-Schneider spinoffs unless and until the industry itself or the federal government implements one consistent definition of non-GMO; but then we would come to the question of whether to make that unified definition part of a mandatory or voluntary labeling system.
If ‘non-GMO’ labeling (assuming a consistent definition) was just voluntary, could consumers still make statutory consumer fraud claims on a theory that ‘reasonable consumers’ would think that food products - not labeled as non-GMO but otherwise advertised as ‘good for you’ or ‘nutritious’ - would have to be non-GMO?
While the debate plays out in the courts over whether GMO feed or corn make dairy, meat and soft drinks themselves ‘GMO’ to ‘reasonable’ consumers, manufacturers must stomach a different sort of ‘fruit’ (burgeoning numbers of lawsuits) of the ‘poisonous tree’ (lack of a consistently defined and universally applied meaning of ‘non-GMO’).
What can manufacturers do?
To reduce the risk of getting wrapped up in the debacle, manufacturers could contemplate: transparency of their GMO-related consumer communications; dialogue between company legal departments (or experienced outside counsel) and marketing personnel regarding interplay between company supply chains and latest legal rulings; and risk-reward analysis of pursuing non-GMO certifications.
To get G-M-Over the bumper crop of class actions over non-GMO labels, food companies should take proactive steps now in their immediate and long-term business planning to minimize exposure in their particular circumstances, rather than react when it’s too late.
Kristen E. Polovoy serves as of counsel in Montgomery McCracken's litigation department, focusing on consumer fraud class action defense in New Jersey and Pennsylvania state and federal courts. The information, comments and links in this article do not constitute legal advice and do not form any attorney-client relationship with the author.