A court has invalidated the portion of the U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service’s (AMS’s) final rule implementing the National Bioengineered Food Disclosure Standard (BE Rule) that allows for a text message disclosure as an alternative to the electronic/digital link disclosure. The court found the text message option was contrary to the statute’s requirement to “provide additional and comparable options to access the bioengineering disclosure”, and accordingly unlawful under the Administrative Procedures Act (APA). All other elements of the final rule, including the definition of bioengineered food and the use of “bioengineered” for the disclosure language, remain valid. Further, in order to minimize disruption to consumers and the food industry, the status quo – which allows for both electronic/digital disclosure and a text message option – will be maintained until AMS revises the final rule consistent with the court decision.
In a lawsuit filed against USDA, the USDA Secretary, and the AMS Administrator, plaintiffs –including retail stores that sell natural and organic food products, and food safety advocacy organizations – challenged the disclosure statute and implementing regulations issued by USDA.1 Plaintiffs primarily argued the regulations violate the APA because they (1) permit a text message disclosure option as alternative to an electronic or digital link disclosure; (2) require disclosures that use the word “bioengineered”; and (3) exclude highly refined foods that do not contain detectable amounts of bioengineered. In its September 13, 2022, decision (available here), the court granted summary judgment in favor of the plaintiffs under the APA for the text message disclosure regulation, and denied plaintiffs’ motion in all other respects.
As brief background, the statute directed USDA to conduct a study to “identify potential technological challenges that may impact whether consumers would have access to the bioengineering disclosure through electronic or digital disclosure methods.” In the event USDA determined “that consumers, while shopping, would not have sufficient access to the bioengineering disclosure through electronic or digital disclosure methods,” the agency was directed to “provide additional and comparable methods” to access the disclosure. AMS hired Deloitte Consulting to conduct the study, and based on the results of the study, concluded that “consumers would not have sufficient access to the bioengineering disclosure through electronic or digital means under ordinary shopping conditions at this time.” To improve consumer access to the bioengineering information, AMS created a fourth disclosure option involving text messages, separate from the electronic disclosure method. Under the final rule, companies could choose among the text disclosure statement on the label, symbol, text message, or the electronic or digital link disclosure option. The digital option also requires a phone number on-pack that provides access to the disclosure.
The court found that AMS’s decision to provide a separate text message disclosure option did nothing to fix the problem of inaccessible electronic disclosures. Instead, it merely provided a fourth disclosure option that regulated entities can select instead of the electronic disclosure method. As a result, the standalone electronic disclosure suffices under the regulations, even though USDA determined consumers would not have sufficient access to the electronic disclosure while shopping. The court found that Congress’s aim in mandating the study was to ensure that the electronic methods were accessible and would achieve the goal of disclosure, while AMS’s text message alternative did not achieve this goal. AMS also, according to the court, failed to adopt the Deloitte study’s recommendation that the text message alternative be added as an additional requirement for the electronic disclosure. The court concluded that nothing in the statute permitted AMS to expand the disclosure options for manufacturers beyond the “text, symbol, or electronic or digital link” choices.
Accordingly, the final rule is now remanded to AMS with respect to the text message option specifically. However, the court was convinced that vacating the rule immediately would disrupt consumer access to BE disclosure and would be disruptive to the food industry. Accordingly, the rule is remanded without vacatur, meaning the status quo is maintained while AMS revisits the issue. This means that the final rule remains in place as is, until AMS revises the rule in a manner consistent with the court decision.
Mandatory Disclosure Terminology (“Bioengineered”): In response to plaintiffs’ arguments that mandating use of the term “bioengineered” rather than using more consumer friendly terms such as GE or GMO, the court found that the statute supported the requirement to use bioengineered. By requiring USDA to supplement the statutory definition of bioengineering with “any similar term, as determined by the [USDA]”, Congress gave USDA discretion to only require the term bioengineered. USDA’s reasoning in determining that using terms such as GE or GMO could blur the scope of the regulations and lead to inconsistent disclosures, was found to be reasonable.
Definition of “Bioengineering” and Highly Refined Foods: The court found that AMS’s decision to define bioengineered foods to exclude foods that are highly refined and do not contain detectable modified genetic material was reasonable under the law. Because the statute required AMS to determine the amounts of a bioengineered substance that may be present in a food in order to be considered BE, and AMS determined that regulated entities must prove that rDNA is undetectable in foods derived from BE foods, AMS appropriately implemented the statutory mandate.
Restrictions on Use of the Terms GE/GMO, “May Be Bioengineered”, and Disclosure of Animal-Derived Foods as BE When Derived from Animals Fed GMO Feed: Regarding the First and Fifth Amendment challenges, where plaintiffs argued the word-use regulations unconstitutionally restricted their speech, the court found plaintiffs lack standing to bring these challenges. Nothing in the statute or regulations prohibits plaintiffs from using other terms such as GE or GMO, and the court concluded plaintiffs had failed to establish a likelihood of prosecution for using such terms. Similarly, the court concluded plaintiffs did not have standing to object to a provision that prohibits animal-derived products from being considered BE solely because the animals were fed GE feed, or the prohibition on using the phrase “may be bioengineered”. Because plaintiffs did not demonstrate any “concrete” plans to label meat or dairy products as “bioengineered”, or to use the phrase “may be bioengineered”, there was no credible threat of enforcement needed to establish standing.
Tenth Amendment Challenge to Statutory Provision Preempting State Labeling Laws for GE Seeds: The court upheld Congress’s decision to set national standards and practices for disclosures about bioengineering, so as to ensure that suppliers of GE seeds would be free of a patchwork of state laws. The court rejected plaintiffs argument that preemption is valid only if Congress has enacted a federal law mandating disclosure of GE seeds.
AMS is now tasked with revising the final rule – and specifically considering amendments to the electronic/digital link disclosure – that would provide appropriate access to consumers given the lack of access to the electronic/digital disclosures while shopping. Before revising the rule, AMS would need to undertake notice and comment rulemaking, including issuing a proposed rule and providing an opportunity for public comment. The Center for Food Safety, one of the plaintiffs, has stated it is considering appealing the court’s decision.
Authored by Martin Hahn and Veronica Colas.
Sanctions Navigator: Russia Sanctions
Are you sure want to delete comment ?
Scan this QR Code to share this content
This website is operated by Hogan Lovells Solutions Limited, whose registered office is at 21 Holborn Viaduct, London, United Kingdom, EC1A 2DY. Hogan Lovells Solutions Limited is a wholly-owned subsidiary of Hogan Lovells International LLP but is not itself a law firm. For further details of Hogan Lovells Solutions Limited and the international legal practice that comprises Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses ("Hogan Lovells"), please see our Legal Notices page. © 2022 Hogan Lovells.
Attorney advertising. Prior results do not guarantee a similar outcome.