A federal judge ruled last week that Vermont’s first-in-the-nation genetically modified organism (GMO)-labeling law, Act 120, can go into effect even while it is being challenged in court.  Both GMO-labeling proponents and the food industry have closely watched Vermont since nationwide distribution networks make it likely that a requirement to label products sold in one state may as well apply in all states.

As we reported last October, Act 120 is being challenged in Vermont federal court by several trade groups, lead by the Grocery Manufacturers Association (GMA).  GMA contends that the statute violates the First Amendment and the Commerce Clause and is preempted by federal law.  GMA also asked that the court enjoin the statute from taking effect while its lawsuit was pending because the statute discriminated against interstate commerce.  Last Tuesday, the court rejected that request after concluding the statute did not violate the Commerce Clause and GMA had not shown it was likely to succeed on certain First Amendment arguments.  The court also dismissed some, but not all, of GMA’s preemption and First Amendment arguments but concluded that GMA was likely to succeed in its challenge to Act 120’s restriction on the use of words such as “natural” on products with GMOs.

This decision follows closely upon the heels of Vermont’s attorney general adopting regulations to implement Act 120.  These regulations are scheduled to become effective on July 1, 2016 and would provide guidance to manufacturers and sellers about how to comply with Act 120, including by setting forth specific language in labels for food with GMOs, providing guidance about the labels’ location, and exempting certain products, including meats and food bearing a USDA label.

The court’s ruling, however, does not mean that the statute ultimately will survive GMA’s challenges or that the regulations will become and remain effective.  To the contrary, because the court only dismissed some of GMA’s claims, it remains possible that GMA’s other arguments will succeed and invalidate the law.  It is also possible that GMA will seek appellate review of the court’s ruling, and the court on appeal will ultimately reach a different conclusion.  In addition to GMA’s challenges, it is also possible that Congress will pass federal legislation that not only would set labeling requirements for food containing GMOs, but also would include a preemption provision forbidding states from enacting their own requirements.  Indeed, federal legislation that would do just that was introduced last year and again earlier this year

As a result, the fate of both the statute and the newly adopted regulations remain uncertain.  If Act 120 is found to be unlawful before July 2016, or if Congress passes a statute preempting such laws, Act 120 and its accompanying regulations will have no force.  In the meantime, the food industry faces continuing uncertainty on this important issue.