Voluntary "non-GMO" labeling claims are all the rage, with food and beverage enterprises eager to answer consumer desire for information about the way in which products are manufactured or processed. With consumers and pressure groups increasingly demanding all sorts of process-related information about products and services, the question becomes whether voluntary "non-GMO" labeling is worth the risk, notwithstanding consumer demand.

In this legal briefing, disputes partner David Wallace discusses a liability scenario that voluntary "non-GMO" labeling claims have the potential to spawn in the United States, which does not (yet) have a mandatory labeling regime, and best practices for mitigating that risk.

Q:  Why the relatively sudden increase in voluntary process disclosures like "non-GMO" labeling? What's the explanation?

Well, there's a bit of a push-pull quality to it, I think. On one hand, you have consumers with strong feelings today about where, how, or by whom products are made. Some consumer process preferences have been around for a long time and are familiar to many us: "Kosher" and "Pareve," for instance. With greater frequency, though, consumers are viewing their purchasing decisions as a vehicle for making a personal or political statement of sorts -- an opportunity to express personal preference. They're voting with their pocket-book for or against something, making a statement that some probably hope might eventually influence the marketplace one way or another. "Made in the USA" is a good example; "USDA Organic" is another. "Non-GMO" process-related information is just another aspect of that phenomenon. More and more often, consumers are pushing manufacturers and retailers to provide them with process-related as opposed to product-related information.

On the other hand, you have this uniquely American concept or brand of entrepreneurial litigation, which is fueled by a combination of factors unique to its legal system, including the jury system, contingency fees, and, of course, the American rule, with each side paying its own fees regardless of outcome (save statutory exceptions for certain types of claims). Over time, plaintiffs' class-action bar has wielded this combination of factors, together with the class-action procedural device itself, as a whip hand towards all sorts of ends -- more recently against the consumer product sector generally in response to the growing prevalence of voluntary labeling statements. It began with companies touting the "natural" qualities of their products as a point of differentiation.

This phenomenon, in turn, has given way to a broader play by plaintiffs' class-action bar aimed at pulling food and beverage companies onto new legal ground, in an effort to force them into disclosing all sorts of information about various aspects of their products, processes, and supply chains, based on its alleged relevance to consumers. The goal seems ultimately to make process disclosures of one sort or another mandatory -- a legal duty.

So, you've basically got two forces working in tandem, and "non-GMO" labeling is part of this trend.

Q:  If there's this groundswell of consumer demand for "non-GMO" labeling, why not provide it -- "Just Label It"?

At the outset, there are the practicalities -- where and how does one draw the line? Right now, "non-GMO" labeling is fashionable, but what about the wages a company pays, its carbon emissions, the labor practices of business partners in the supply chain, or the energy efficiency of its operations? Start down the road of volunteering process information and pretty soon all sorts of variables and factors creep into play.

That's not the hardest part, though. For while law does not prevent voluntary "non-GMO" labeling per se, it does require -- in the words of the Federal Food, Drug, and Cosmetic Act (FDCA) -- that such labeling not be "false or misleading in any particular." And there's the rub because, like the word "natural," the acronym "GMO" is an entirely lay concept with no legal or scientific definition and, likely as not, no common consumer understanding either. That's a fix best to avoid from a liability perspective, to the extent one has a say in the matter.

Now for many, the term "non-GMO" seems to be accepted shorthand for "not genetically engineered." Basically, the language police, here the natural and organic food industries, have declared that "GMO" means foods or ingredients derived from plants that have been modified in a transgenic manner. So, by the diktat of one segment of the food and beverage industry, only the commercial products of rDNA engineering (i.e. modern biotechnology) constitute "genetic modification" and should be labeled "GMO." But broadly speaking, virtually all cultivated food crops have been "genetically modified" by man in a variety of ways since the dawn of the agricultural age some 10,000 or so years ago. The implication -- intended or not -- is that "non-GMO" foods, those produced from plants bred conventionally, are materially different and, as such, superior to products not so labeled (i.e. so-called "GMO" foods). And there's no scientific support for that position in terms of the health, safety and nutritional value of genetically engineered foods and ingredients. So what's the message exactly?

Q:  Like two ships passing in the night?

That's apt. To me, as a defense lawyer, the chief problem with voluntary "non-GMO" labeling is the lack of a common language, which is terribly fraught legal ground on which to position oneself for perceived commercial advantage. Try broaching the subject with friends. In my experience, almost any discussion of genetic engineering very quickly begins to sound like a variation of Abbott and Costello's classic comedy routine -- Who's on First?

And we've been here before with advertisers adding the word "natural" and its variants to their products.  Look how that turned out.  In Yogi's words, "it's like déjà vu all over again."  The way in which the "natural" litigation unfolded, and what it has led to, holds valuable lessons for companies contemplating "non-GMO" labeling. Q:  How so?

The goal of food labeling law in this country is basically two-fold: (1) to prevent deception and, (2) to enable consumers to make informed decisions at the point of sale by mandating disclosure of certain product-related information, in terms of such things as standards of identify, ingredients, nutritional values, and the presence of allergens. That's basically the purpose of mandatory food labeling laws and regulations like those promulgated on a national level by the FDA under authority of the FDCA. Many states have incorporated these requirements into their own food laws by reference, and authorized consumers to enforce them under state consumer protection laws that broadly prohibit deceptive marketing practices. Lawsuits of this sort typically take the menacing shape of proposed class actions, as demonstrated by the explosion of consumer-fraud litigation over the past five years or so challenging labeling statements of all kinds by players great and small in the food and beverage industry.

In some cases, companies are accused of running afoul of mandatory labeling requirements. But the fuse that really ignited the current wave of food and beverage litigation was fashioned by plaintiffs' class-action bar from an industry arms race of sorts, a period marked by the widespread voluntary promotion and differentiation of competing products on the basis of their claimed "natural" qualities. With no legal definition or common consumer understanding of this term, however, no one could really say what the term actually meant -- except for plaintiffs' class-action bar, who insisted that the word meant whatever they said it did, neither more nor less. Many, as a result, discovered that they had simply followed the competition into litigation by following its lead on "natural" claims. A lot of companies unfortunately are still feeling the liability sting in that tail.

Voluntary "non-GMO" labeling raises the same liability specter:  Seller beware.

Q:  What's the legal risk or liability shadow that voluntary "non-GMO" labeling casts?

Voluntary "non-GMO" labeling basically does two things that could be problematical from a liability perspective.

One, it falsely endorses the notion that man-mediated conventional plant breeding techniques, including the use of biological and chemical agents to modify DNA, are "natural." At the same time, the label has the capacity to stigmatize genetically engineered foods and ingredients, which by default are deemed "unnatural" (i.e. synthetic or artificial). This, despite man's central role in both types of genetic modification and evidence that transgenic engineering can occur naturally, based on the recently reported discovery of agrobacterium transfer DNA in the genome of a cultivated sweet potato in Peru.

Two, the "non-GMO" designation can carry the false and misleading implication of comparative product superiority. This is particularly true when competing products are viewed side-by-side on store shelves, one labeled "non-GMO" and others without that claim. Without qualifying information, the "non-GMO" statement arguably amounts to an unsubstantiated comparative message. The NAD reached this conclusion a few years ago, in a challenge to an advertiser's use of the "Non-GMO Project Verified" seal. Siding with the challenger, it explained that the point of differentiation was not the ingredients themselves, but instead that the advertiser had submitted the products in question for laboratory verification that no bioengineered material had been accidentally introduced anywhere along the supply chain. NAD consequently recommended that the advertiser modify the "non-GMO" claims on its products to more accurately reflect the intended purpose of the "Non-GMO Project" seal (i.e. GMO avoidance). Without this qualification, it reasoned, the advertiser's "non-GMO" claim failed to accurately convey to consumers how its products differed from competitor products.

Q:  Are there any other liability factors for food and beverage companies to consider in relation to voluntary "non-GMO" labeling?

There's a wrinkle that can figure prominently, beyond the importance of accurately communicating the purpose of third-party "non-GMO" certifications. And that's the question of what it means to say that a food is "non-GMO" when there is no bioengineered variety of that food in commercial use -- when the food product cannot be made with genetically engineered ingredients. This was another issue in the NAD decision I mentioned earlier, but the modifications NAD recommended did not squarely address the subject. Here too, then, without context -- some sort of caveat or qualifying information -- a "non-GMO" claim is arguably deceptive to the extent it implies comparative superiority by inaccurately suggesting that the food was produced without the intentional use of bioengineered material.

Q:  What steps can food and beverage companies take to avoid or mitigate the legal risks of voluntary "non-GMO" labeling?

Start with and stick fairly close to FDA guidance on the subject. It's not legally binding, but it's the considered view of the industry's chief regulator. While the FDA disfavors use of the acronym "GMO," it's created a regulatory "safe harbor" of sorts by declaring that it does not intend to take enforcement action against use of that acronym -- provided (1) the food is, in fact, not derived from a genetically engineered plant, and (2) the food's labeling is not otherwise false or misleading.

A prudent course would be to explain, in all events, that the "Non-GMO Project" label means steps have been taken to avoid the adventitious presence of bioengineered material in a product, as the NAD has suggested. And when a "non-GMO" claim is made in connection with a food or ingredient that has no genetically engineered counterpart in commercial use, it's probably a good idea also to include a labeling disclosure -- a qualifier -- applicable to the particular food category as a whole (as opposed to a company's brand), such as "Green beans are not produced using genetic engineering." That way, the consumer is not led to assume -- falsely -- that competitor products without such a claim have been genetically engineered. Finally, the business team should partner early on in the process with the legal team.  You can't stop people from suing -- too often it seems the American way -- but a multidisciplinary approach to "non-GMO" and other voluntary process-related labeling can be the foundation of a robust defense if things go sideways.