WASHINGTON, June 18, 2014 - Whether government has the authority to require food manufacturers to label products to disclose the presence of ingredients produced with biotechnology is again before the federal courts. The suit could finally resolve a costly, high-profile dispute that has boiled over throughout the two decades since biotech products have been approved for commercial use in the United States.

The suit filed in U.S. District Court in Burlington, Vermont, June 13 by the Grocery Manufacturers Association (GMA) and three other trade groups will have far-reaching implications not only for food industry marketing and advertising but also for the future of biotech agriculture.

Joined by the International Dairy Foods Association (IDFA), Snack Food Association (SFA) and National Association of Manufacturers (NAM), GMA asked the court to nullify a Vermont state law that would require labels on most packaged foods beginning in July 2016. The law violates the Constitution because it “compels manufacturers to use their labels to convey an opinion with which they disagree,” the associations’ lawyers contend in the complaint.

Nearly 20 years ago, IDFA ultimately prevailed in a similar challenge to a Vermont law that would have required labels on dairy products from cows treated with a biotech product, recombinant bovine somatotropin (rbST). GMA lawyers cite that and earlier rulings that government must show that the law directly advances a substantial governmental interest.

Vermont failed to show a “governmental interest” in biotech labels, GMA contends, but rather “acted as a pass-through for advocates of controversial views” that the state did not bother to substantiate, or even investigate. The appeals court decision in the 1966 case (IDFA v. Amestoy) determined “that is not enough to justify compelled speech,” the complaint says.

Not only is the constitutional issue raised by GMA similar to that advanced by the American Meat Institute (AMI) in its challenge to USDA’s country-of-origin labeling (COOL) mandate (see Agri-Pulse, May 14, page 3), the two cases share the same legal talent. Catherine E. Stetson of Hogan Lovells in Washington, who argued the AMI case, and Hogan Lovells’ attorneys E. Desmond Hogan and Judith E. Coleman are listed as “of counsel” in the GMA pleading.

“The state is compelling manufacturers to convey messages they do not want to convey, and prohibiting manufacturers from describing their products in terms of their choosing, without anything close to a sufficient justification,” the GMA complaint asserts. “The state is forcing the costs of this experiment on out-of-state companies and citizens to which it is not politically accountable, and it is undermining and impeding the federal government's interest in uniform, nationwide standards for food labeling prescribed by duly authorized expert federal agencies.”

Noting that the constitution’s commerce clause limit states’ authority to regulate commerce, the GMA lawyers also argue that the law unfairly discriminates against out-of-state manufacturers: “By exempting milk and exempting food sold in restaurants, for example, the act has the effect of exempting two of Vermont's largest domestic industries – dairy and tourism – from the requirements that apply to the largely out-of-state firms engaged in food manufacturing.”

Moreover, they say, Vermont also has shifted its legal defense costs to a special fund to which private individuals and organizations may contribute without limit or restriction – “express confirmation that Vermont does not have a ‘state’ interest in the survival of this law.”

In addition, GMA contends that the law prohibiting the use of “natural” or words of similar import” on foods derived from biotechnology is inconsistent. It notes that a granola bar containing biotech soy proteins may not be labeled “naturally made” in a grocery store “but it may bear that labeling if it is sold in a vending machine for immediate consumption.”

Because manufacturers promote food through regional and national advertising that reaches Vermont consumers through print, television, radio and the Internet, GMA says, they “cannot achieve compliance with the advertising restrictions in the act without changing their nationwide and regional advertising, as well as their Internet advertising and web sites.”

The law likewise runs afoul of the Constitution’s “supremacy cause,” the lawyers argue. “When a state law is expressly or implicitly preempted by federal law, or when it would be impossible to comply with both the state and federal law, the state law must yield,” they contend.

The food industry’s arguments find strong support in the reasoning of a journal article in The New Atlantis by Jonathan H. Adler, a law professor at the Case Western Reserve Law School in Ohio, when a similar proposal was up for a voter referendum in California two years ago.

“Aside from the fact that the FDA currently has no legal basis to require GMO labeling in the absence of a difference in food composition, it may not even be constitutional to attempt to give the FDA that authority,” Adler writes. “Product labels are commercial speech, which is protected by the First Amendment, even if it does not receive the same protection as other forms of expression such as political or religious speech. Under a test established by the Supreme Court in its 1980 Central Hudson decision, if a company’s commercial speech is lawful and not inherently misleading, the government must proffer a substantial interest before it may be regulated.”

If government agencies find no significant difference between biotech and other foods, the only interest in mandating the labeling of biotech foods “would be a consumer’s ‘right to know,’ he adds. “But this ‘right to know’ is not a sufficient interest to justify regulating the commercial speech of food producers.” Adler points out the appeals court decision in the IDFA dairy label case that said, “We are aware of no case in which consumer interest alone was sufficient to justify requiring a product’s manufacturers to publish the functional equivalent of a warning about a production method that has no discernable impact on a final product.”


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