GUEST ARTICLE: GMO labeling... What we know and what may happen next

By Jay W. Connolly, Edward F. Maluf and Owen Wolfe, attorneys, Seyfarth Shaw

13-Jul-2017 - Last updated on 14-Jul-2017 at 17:38 GMT

Picture: istockphoto-Traitov

One of the hottest topics in the food, beverage and dietary supplement industries, for both producers and advertisers, remains the disclosure of genetically modified organisms, or ‘GMOs,’ in these products.

The landscape changed dramatically when nearly a year ago Congress and the Obama Administration required the USDA to develop regulations governing GMO-related disclosures on food and beverage labels by July 2018, just over a year from now.

By doing so, Congress overrode the burgeoning individual regulatory schemes of several states developing their own labeling requirements. But there is now uncertainty—under a Trump administration—about the current timeline for, and ultimate outcome of, the federal labeling regulations.

Also unclear is the impact that potential lack of regulations might have on product advertisement.

Federal vs state regulations

These regulations—when or if they are promulgated—likely will not address a number of high-profile GMO-related issues, including “drift contamination” or “cross-contamination,” where genetically modified seeds in one or more crops inadvertently mix with and “contaminate” non-GMO crops.

A number of lawsuits have alleged widespread contamination of U.S. rice, wheat, and corn crops by GMO seeds produced by various companies.

Without actual federal rules, or the certainty that federal rules will be developed, and the regulatory consistency that brings, some states and counties have started to develop their own rules, which were not preempted by the federal GMO labeling law.

This now raises the specter of a patchwork of regulations that Congress expressly sought to avoid when it preempted state GMO labeling laws, and could have an impact on food, beverage and supplement producers and advertisers.

Feasibility study

Under the 2016 National Bioengineered Food Disclosure Standard Act, Congress mandated that the USDA promulgate new rules governing the disclosure of GMO ingredients on food labels by July 2018. The Act allows the USDA to consider several labeling methods, including the use of bar codes that could be scanned by smart phones to reveal GMO-related disclosures for the food product (a proposal widely panned by consumer groups as lacking transparency).

But before enactment, the USDA must complete a study on the feasibility of the various labeling options by July 28, 2017. And as with the promulgation of any new federal rule, there will be public comment periods that likely will draw significant participation.

On January 18, 2017, under the Obama Administration, the USDA submitted a “pre-rule” on GMO labeling to the Office of Management and Budget. The “pre-rule” would have provided the public a chance to comment on the agency’s initial thinking with respect to the GMO labeling rule. But the USDA, under the Trump Administration, later withdrew the pre-rule without proposing a timeline for the completion of, and public comment on, the feasibility study or the labeling rule itself.

The USDA has not made any formal announcements regarding a timeline, though the agency may be on track to complete the feasibility study by the July 28 deadline and a proposed rule might be published for public comment later this year (CLICK HERE). At the end of June 2017, the USDA also published a list of 30 questions and sought public responses to those questions in order to help inform the eventual rule.

But so far there has been no announcement about the timing of the publication of the study and proposed rule, or the public comment period.

So the current status of the feasibility study and the eventual rule, including the timing of the public’s opportunity to comment on each, remains unclear. President Trump also has issued several executive orders restricting all federal agencies’ abilities to enact new rules. It is unclear how those executive orders might affect the GMO labeling rule.

The timetable

Given the current state of affairs, there remains uncertainty about the exact timeline for the labeling rule. Although the USDA may be on track to comply with all of the Congressionally-mandated deadlines, the current uncertainty regarding the timeline and the impact, if any, of President Trump’s executive orders raises the possibility that the USDA might miss the deadline for the feasibility study or for the rule itself.

To the extent the USDA misses any of these deadlines, the agency could be subject to suit in a federal court. When an agency is required to act within a certain statutory time period but misses that deadline, federal courts can order the agency to act promptly. Some federal courts—notably those in California, Washington, Oregon, Nevada, Idaho, Colorado, Oklahoma, and Kansas—have determined that they must order an agency to act promptly when it misses a statutory deadline. But other federal courts—such as the D.C. Circuit, which hears many cases involving actions by federal agencies—have held that courts may choose whether to issue such an order. Still other federal courts—including those in important agriculture states like Iowa, the Dakotas, and Nebraska—have still not weighed in on this issue, and could go either way.

Assuming the GMO labeling rule is eventually enacted, it could take many different forms, depending on the outcome of the feasibility study and public comments. Congress left the USDA with wide discretion regarding the method of labeling.

The type of label that will ultimately be required—for example, an explicit writing on food packaging or a scannable bar code—is unclear. It also is unclear what amount of GMO ingredients in a food or beverage product will trigger the labeling requirements. Congress left it to the USDA to “determine the amounts of a bioengineered substance that may be present” for the labeling requirement to be activated.

There will also be further uncertainty in connection with advertisers seeking to make express claims that their food products do not contain a bioengineered substance or are non-GMO in order for these claims to be accurate.

Drift contamination

The fact is that there will likely remain significant unanswered questions and issues for both producers and advertisers no matter what form the final rule takes. This includes the issue of “drift contamination”/“cross-contamination.”

GMO disclosure critics contend that “drift contamination” is widespread and difficult to avoid, potentially calling into question how confident producers and advertisers can really be when labeling a food or beverage product as “non-GMO.” These risks may be reduced depending on where the USDA sets the GMO-ingredient threshold that would trigger the disclosure requirements.

Even so, it may be difficult for producers and advertisers to be certain that they fall below the threshold, particularly if the bar ends up being low. And without the benefit of federal rules providing certainty, the public is seeking such guidance through judicial and legislative means.

For example, recent litigation alleging “drift contamination” has resulted in large damage awards against producers of GMO crop seeds. In addition, a number of counties in the western United States and Hawaii have passed ordinances banning the growth of GMOs within county limits, in part to combat drift contamination, though some of these ordinances have been stricken by courts. In addition, the Oregon legislature is currently considering a bill that, if passed, would make Oregon the first state in the nation to impose liability under state law on holders of GMO seed patents whose seeds are found to have “contaminated” other fields.

An uncertain landscape

This activity at the state and local level raises the specter of patchwork GMO regulation throughout the United States, an issue that is unlikely to be resolved by the USDA’s eventual rule on GMO labeling. To the extent the rules are provided by the states, and not the USDA, national advertisers will be especially challenged in promoting their goods consistent with all state regulations.

The landscape for food producers and advertisers will remain challenging to the extent the federal regulatory landscape remains uncertain and creates a vacuum that states will potentially seek to fill.