The country’s first genetically modified organism (GMO) food labeling law will take effect as scheduled despite a lawsuit from food industry groups seeking an injunction.

In 2014, Vermont became the first state to enact labeling requirements for GMOs, set to take effect July 2016. While Connecticut and Maine previously passed GMO labeling requirements, the laws in those states are not triggered until a specific number of neighboring states have enacted similar legislation.

Pursuant to Vermont’s law, fresh produce and processed foods offered for retail sale in the state must include special labeling if they are entirely or partially produced by genetic engineering. Processed foods containing one or more genetically engineered ingredients must include label statements such as “partially produced with genetic engineering” or “may be produced with genetic engineering.”

The law also prohibits foods with genetically engineered (GE) ingredients from concurrently using labels like “natural,” “naturally made,” “naturally grown,” or “any words of similar import that would have a tendency to mislead a consumer.”

Groups including the Grocery Manufacturers Association sued in response, arguing that the new law violated their First Amendment rights and the Commerce Clause and was preempted by various federal statutes. In addition, according to the plaintiffs, producers would have to re-label their products, “a costly, time and resource-intensive effort,” establish dual inventories, and create production and distribution systems for Vermont-bound products. Such costs might push smaller manufacturers out of the state market, the groups added.

The state filed a motion to dismiss in defense of the law and the plaintiffs asked the court for a preliminary injunction to halt the law from taking effect.

In an 84-page decision, U.S. District Court Judge Christina Reiss denied the preliminary injunction and granted the state’s motion to dismiss on multiple claims related to the GMO labeling requirements. However, she denied the motion regarding the “natural” terminology provision.

She noted that the legislature included a “Findings” section in the bill where lawmakers concluded “that food produced from genetic engineering should be labeled as such, because [l]abeling gives consumers information they can use to make decisions about what products they would prefer to purchase, because public opinion polls indicate labeling is relevant to consumers, and because [p]ersons with certain religious beliefs object to producing foods using genetic engineering [and object] to tampering with the genetic makeup of life forms and the rapid introduction and proliferation of genetically engineered organisms and, therefore, need food to be labeled as genetically engineered.”

Since the GMO labeling requirements are supported by the legislature’s “Findings” and based on these legislative purposes, the requirements survived constitutional scrutiny, the court said.

“The safety of food products, the protection of the environment, and the accommodation of religious beliefs and practices are all quintessential governmental interests, as is the State’s desire to ‘promote informed consumer decision-making.”

As for the Commerce Clause claims, Judge Reiss found that Vermont’s law treats both in-state and out-of-state entities in the same manner. The statute “does not require [genetically engineered] manufacturers to alter their labeling, production, and distribution practices nationwide and it is indifferent regarding whether and how GE products are labeled in other states.”

Claims that the law was preempted by the Federal Food, Drug, and Cosmetic Act, the Nutrition Labeling and Education Act, the Federal Meat Inspection Act, and the Poultry Products Inspection Act also failed to sway the court.

The Food and Drug Administration has not promulgated any formal standards for GMO labeling, the court noted, and the agency has issued guidelines for the voluntary disclosure of GE ingredients. “This clearly implies that, at least from the FDA’s perspective, GE ingredient information may be provided without violating federal law or misbranding a food product,” Judge Reiss wrote.

“While plaintiffs’ pleas for GE labeling uniformity reflects economic sense, and perhaps common sense as well, it runs afoul of the presumption against preemption which ‘is particularly weak where Congress had indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to stand by both concepts and to tolerate whatever tension there [is] between them,” the court said.

Turning to the restrictions on the use of “natural” terminology, the court ruled the potential benefits of the law did not outweigh concerns about the lack of a definition for the term “natural.”

Because the law’s “‘natural’ restriction is bereft of definitional content, it will either sweep too widely or too narrowly in penalizing commercial activities that employ an advertising term that is ‘susceptible to more than one interpretation,’” Judge Reiss wrote. “Moreover, because [the law] does not restrict food product manufacturers’ use of ‘natural’ terminology generally, this raises the question of what governmental interest could be directly advanced when only certain commercial speakers are prohibited from using a potentially misleading term.”

To read the opinion in Grocery Manufacturers Association v. Sorrell, click here.

Why it matters: Food manufacturers should brace themselves for the new law to take effect July 1, 2016. Based on the court’s extremely thorough review—and denial of the plaintiffs’ motion for a preliminary injunction—it seems likely that the GMO labeling provision will withstand judicial scrutiny. However, the court’s concerns about the restrictions on “natural” terminology used in conjunction with GE ingredients could present a partial victory for the plaintiffs as the court expressed skepticism that the law advanced a substantial state interest and was no greater than necessary to serve that interest. Whether the success of the law nudges other states to pass similar legislation remains to be seen.