On February 22, a packed room of food technologists and cereal chemists in Minneapolis heard from a panel of speakers about the hot debate surrounding GMO-labeling, an issue that is unlikely to be resolved any time soon.
At the center of the debate is a 2014 Vermont GMO-labeling law that is set to take effect on July 1, 2016. Nearly immediately after passage, the Grocery Manufacturers Association, along with other industry groups, filed a lawsuit to prevent the law from taking effect on First Amendment grounds. The case is pending in the 2nd Circuit Court of Appeals in New York; the decision could be published at any time, and it is not entirely clear how the case will be decided. Even if the case is decided before July 1, it will inevitably be appealed to the U.S. Supreme Court.
Many food companies are gearing up for the July 1 deadline, but the uncertainty around the outcome of Vermont’s case leaves food companies in a difficult position. Even if the case is decided before July 1, it will inevitably be appealed to the U.S. Supreme Court.
Companies that sell product into Vermont have some choices to make. Do they redesign their labels to comply with Vermont’s law? Does the redesign apply to labels used in national markets or only to those products sent to Vermont? Do the companies decide to stop selling some or all of their products in Vermont altogether until the case is resolved?
Labeling and the First Amendment
The First Amendment prohibits the government from infringing on the exercise of free speech. The First Amendment does not restrict a company from including GMO-labeling on their products, either on their own or from consumer pressure. But, whether the government can require or prohibit GMO-labeling may violate the First Amendment.
During the panel event, Chip English, a partner in Davis Wright Tremaine’s food and beverage practice, laid out the legal framework for the First Amendment analysis of Vermont’s GMO-labeling law, as explained below.
Two premises underlying the constitutional analysis are that commercial speech is afforded less protection than non-commercial speech, and that compelled speech (e.g., the requirement to make a disclosure) is held to a lesser standard than prohibited speech. Vermont’s law includes a mix of compelled commercial speech (e.g., companies must disclose the presence of genetically engineered ingredients) and prohibited commercial speech (e.g., companies cannot use the term “natural” or any similar terms).
Under existing case law, it is not entirely clear whether the requirement to disclose the presence of GMOs, as compelled commercial speech, is constitutional under the First Amendment.
As articulated in the Vermont case, the constitutional standard, from a case called (Zauderer), requires that the compelled speech be commercial in nature, that the disclosure requirements be reasonably related to the State’s interest in preventing consumer deception, and that the compelled speech be factual and uncontroversial.
A Matter of Interpretation
Two recent cases out of the D.C. Circuit interpret the Zauderer standard in very different ways and make it more difficult to predict how the Vermont case will turn out.
In American Meat Institute v. United States Department of Agriculture (AMI), a case debating the constitutionality of Congress’ country of origin labeling law, the D.C. Circuit held that the disclosure requirement was constitutional under the First Amendment. The court in AMI asked “whether the principles articulated in Zauderer apply more broadly to factual and uncontroversial disclosures required to serve other government interests” besides preventing consumer deception (emphasis added). The en banc court answered affirmatively and expanded the First Amendment standard to apply to reasons beyond preventing consumer deception. Further, the court found that a country of origin disclosure was factual and noncontroversial.
Shortly after AMI was decided, a three judge panel of the D.C. Circuit in National Association of Manufacturers v. Securities and Exchange Commission (NAM) held that Congress’ law requiring companies doing business in the Democratic Republic of Congo and other specified countries to disclose whether minerals used in their products were from conflict areas was unconstitutional compelled speech under the First Amendment.). The court in NAM rejected the notion that Zauderer applies to government interests other than preventing consumer deception. Even if the expanded interpretation was followed, the court in NAM found that the required disclosure failed the Zauderer test in part because the required disclosures were not “noncontroversial.”
“We put it this way: ‘Products and minerals do not fight conflicts. The label “[not] conflict free” is a metaphor that conveys moral responsibility for the Congo war. It requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups. An issuer, including an issuer who condemns the atrocities of the Congo war in the strongest terms, may disagree with that assessment of its moral responsibility. And it may convey that “message” through “silence.”’” These cases are difficult to reconcile and it is not entirely clear what distinguishes the two. What makes country of origin labels noncontroversial and conflict minerals disclosures controversial? Can the Zauderer standard be applied in cases not focused on preventing consumer deception?
We put it this way: ‘Products and minerals do not fight conflicts. The label “[not] conflict free” is a metaphor that conveys moral responsibility for the Congo war. It requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups. An issuer, including an issuer who condemns the atrocities of the Congo war in the strongest terms, may disagree with that assessment of its moral responsibility. And it may convey that “message” through “silence.”’
A Shifting First Amendment Standard and GMO-Labeling
Under these standards, the following questions arise: Is GMO-labeling a factual and noncontroversial disclosure? Is GMO-labeling meant to prevent consumer deception? Will other reasons for GMO-labeling suffice to meet the standard under Zauderer?
The 2nd Circuit Court of Appeals decision may shed some light on these questions, but it may not.
Members of Congress have introduced competing pieces of legislation regarding GMO-labeling, which may provide some clarity on the issue. On Tuesday, March 1, the Senate Agriculture, Nutrition, and Forestry Committee voted to advance Chairman Roberts’ bill out of committee for consideration by the full Senate. Chairman Roberts’ bill would establish national voluntary labeling standards and would preempt state GMO-labeling efforts. Then, on Wednesday, March 2, Democratic Senators Jeff Merkley (OR), Patrick Leahy (VT), Jon Tester (MT), and Dianne Feinstein (CA) introduced the Biotechnology Food Labeling and Uniformity Act, which would require mandatory GMO-labeling and would allow food manufacturers to choose one of four ways to comply with the labeling requirements.
But, given the state of Congressional politics these days (and the fact that it is an election year), it is uncertain whether any GMO-labeling legislation would pass and be signed into law. In the meantime, companies must decide how to deal with the law’s upcoming effective date. How will companies respond? Only time (and perhaps Congress or the Courts) will tell.