The federal and state governments have long regulated food products’ contents and labeling. But as consumers increasingly demand food that is “natural,” “gluten free” and “GMO free,” guidance on when a manufacturer may fairly use such terms on a label has come less from agency regulation and more from private litigation, conducted in the plaintiffs’ chosen forum. Until regulators bring more certainty to this area of the law, food-product manufacturers should consider litigation risks before labeling a product “natural” or “GMO free.”

THE INITIAL WAVE OF “NATURAL” CLAIMS AND LACK OF REGULATORY GUIDANCE

Over the last few years, litigation challenging food-product labeling and advertising has spread rapidly. Most actions have been commenced in California, a historically plaintiff-friendly forum. Plaintiffs—usually seeking class certification—hae brought myriad lawsuits under state consumer-protection statutes, alleging, among other things, that food manufacturers and sellers are making false or misleading representations on food-product labels or in marketing materials. In the first wave of cases, plaintiffs contended that products labeled “natural” were deceiving, because the products contained allegedly non-natural ingredients, like high-fructose corn syrup.

Agency regulations provided little help to courts and litigants looking for guidance. The United States Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA), the agencies charged with regulating food-product labeling, have never defined the term “natural.” In non-binding guidance, the FDA stated that a product is likely not natural if it contains “added color,” “artificial flavors” or “synthetic substances.” Food Labeling, 58 Fed. Reg. 2302, 2407 (Jan. 6, 1993) (codified at 21 C.F.R. pts. 5 & 101). But for the most part, the terms “artificial” and “synthetic” are undefined too. And help is unlikely to come soon, as the FDA has said that defining “natural” is not a priority.

Without a regulatory definition, courts have been deciding the meaning of “natural” in one-off decisions granting or denying defendants’ motions to dismiss a plaintiff’s law suit. The risk of inconsistency inherent in piecemeal decision-making throughout multiple jurisdictions leaves food manufacturers and sellers wondering how to lawfully describe and promote their products.

PUBLIC PRESSURE AND LITIGATION MIGRATE TO GMOS

Food manufacturers and sellers may also have to worry about what they do not say. Critics of products containing genetically modified organisms (GMOs) have called for laws requiring product labels to indicate whether the product contains GMOs. Although some consumer groups allege that GMOs are unsafe and are not “natural,” many food manufacturers and agricultural companies believe otherwise, and have spent millions fighting these allegations, and the accompanying efforts to require disclosures concerning GMOs. Other companies have promised to indicate on all products whether the product contains GMOs, or else sell only GMO-free products.

ONCE AGAIN, REGULATORY SILENCE PUTS THE U.S. DISTRICT COURTS CENTER STAGE

The legal climate for GMO claims resembles the state of “natural” claims. The FDA has no regulations on labeling or advertising products that contain GMOs (or don’t). It has, however, recently issued informal guidance suggesting that food-product manufacturers and sellers refrain from making claims such as “No GMO” or “GMO free.” The FDA prefers explanatory phrases such as “We do not use ingredients that were produced using biotechnology;” “This oil is made from soybeans that were not genetically engineered;” or “Our tomato growers do not plant seeds developed using biotechnology.” The FDA warns against the phrase “GMO free” for the added reason that this statement may mislead consumers into believing that other, similar products do contain GMOs.

The FDA’s efforts to provide clarity will not, however, extend to the courtroom, at least for now. On January 6, 2014, in response to three actions in U.S. district courts challenging whether GMO-containing products may be accurately labeled “natural,” the FDA refused to define “natural,” referring only to its previous policy that it will not challenge use of the term “natural” on product labels if the product does not contain “added color,” “artificial flavors” or “synthetic substances.” The FDA added that, if it was to further define “natural,” it would do so through formal administrative rulemaking, not through private litigation.

Though the FDA may be unwilling to submit food-labeling issues to the courts, there is no shortage of private parties willing to do so. There have already been a number of lawsuits filed concerning GMO product labeling and advertising, and more will likely follow.

FORECAST FOR REGULATION AND LITIGATION

In September 2013, the FDA announced its policy initiatives for 2013-2014, which include providing formal guidance on product labeling and food safety.¹ Since then, the FDA has published informal guidance on “gluten free” labeling, the effects of significant manufacturing-process changes on the safety of food ingredients and food-contact substances, substances added to dietary supplements, and distinguishing liquid dietary supplements from beverages. In recent months, the FDA has drafted guidance or sought comments on evaporated cane juice, honey products and food allergens.

These areas are all ripe for litigation. Indeed, litigation and formal investigations have already begun regarding energy drinks, including those against Monster Beverage Corporation.

STATE LEGISLATURES ARE UNABLE TO FILL THE REGULATORY VOID

Rather than wait for federal regulation,² some states are pushing for rules that protect consumers, though with little success. California’s well-publicized Prop 37 (narrowly rejected by California voters in 2012) would have restricted the use of “natural” on food-product labels, and would have also addressed GMOs. California’s Senate introduced a similar bill (S.B. 1381) in February 2014, but it fell two votes short of passage. State legislatures in New Hampshire, Washington and New Mexico have rejected similar efforts to develop labeling requirements. Maine and Connecticut passed laws regarding GMO labeling, but they will not go into effect unless other states pass similar laws. In May 2014, Vermont enacted a law that requires food-product labels to indicate whether the product contains GMOs, and prohibits the use of the word “natural.” But the law does not go into effect until 2016, a number of food categories are exempt, and plaintiffs are already challenging it in court. Most recently, in November 2014, Colorado and Oregon voters rejected similar initiatives, which, if passed, would have required food manufacturers and distributors to label foods produced with genetic engineering or genetically modified ingredients as “GMO.”

Even these fitful attempts to supply what federal agencies have not will be snuffed out if Congress passes the Safe and Accurate Food Labeling Act of 2014 (H.R. 4432), which was introduced in the House of Representatives on April 9, 2014. The bill gives the FDA sole authority to determine the conditions under which bioengineered food may be required to carry a GMO label, and prevents individual states from passing legislation requiring the labeling of food and beverage products that contain GMOs.

H.R. 4432 would, however, provide some guidance itself; it specifies criteria by which a food producer could claim in a label that its food is or is not bioengineered, while also making it clear that such a label cannot suggest (either implicitly or explicitly) that foods developed without the use of bioengineering are safer than those developed with the use of bioengineering.

Furthermore, if enacted, H.R. 4432 will require the FDA to define what is meant by “natural” foods, and specify what is required for a food manufacturer to make a “natural,” “100% natural,” “naturally grown,” “all natural” or “made with natural ingredients” label claim.

But until H.R. 4432 (or a similar bill) is passed, or regulating agencies take further action, private litigation will drive the development of definitions for “natural,” “GMO free” and similar descriptors. In this plaintiff-friendly, relatively undeveloped legal environment, food-product manufacturers and sellers should evaluate whether to label or market their products as “natural” or “GMO free.”