Monday, May 11, 2020

"100% Natural" might be deceptive as applied to food w/bioengineered ingredients

Lee v. Conagra Brands, Inc., No. 17-2131 (1st Cir. May 7, 2020)

Lee alleged that Wesson’s supposedly “100% Natural” vegetable oil contained GMOs, which she regarded as “quite unnatural,” in violation of Mass. Gen. Laws ch. 93A.  She also alleged that surveys showed that many scientists and consumers don’t consider GMO-containing products to be natural. The district court found that the term wasn’t actionable because it conformed to FDA standards. The court of appeals reversed. Given Lee’s allegations, it was plausible that the label could have deceived a reasonable consumer.

Chapter 93A interpretation is guided by FTC interpretations; the FTC has an agreement with the FDA to let it take the lead on food.  Conagra argued that a GMO disclosure obligation would contradict FDA policy that (1) GMO products may be advertised as natural; and (2) the unannounced presence of GMOs in a product never causes the product’s label to mislead a reasonable consumer. “Conagra mischaracterizes Lee’s complaint and the FDA’s views.”

As to the complaint, it sought damages and an injunction against deceptive marketing, not an injunction requiring disclosure; Conagra could most obviously comply with a verdict against it by removing “100% Natural.”

As for the FDA: “The FDA has not said that GMOs are natural and may be advertised as such. Conagra does not cite any binding FDA guidance defining ‘natural,’ nor could it -- that guidance does not exist.” The FDA does have a policy that a product may not be labeled as “natural” if it contains anything “artificial or synthetic (including all color additives regardless of source).” See Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definitions of Terms; Definitions of Nutrient Content Claims for the Fat, Fatty Acid, and Cholesterol Content of Food, 58 Fed. Reg. 2,302, 2,407 (Jan. 6, 1993); see also Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms, 56 Fed. Reg. 60,421, 60,466 (Nov. 27, 1991) (noting that the “FDA has not attempted to restrict the use of the term ‘natural’“ and that its informal policy has been to interpret natural “to mean that nothing artificial or synthetic . . . is included in, or has been added to, the product that would not normally be expected to be there”).

An informal policy “not to restrict the use of the term ‘natural’” is not a rule defining that term. “Where, as here, an agency has issued no binding rule defining a term, the agency’s pronouncements do not dictate whether a representation has the capacity to deceive a reasonable shopper under Chapter 93A.” Indeed, the FDA’s “far more recent request for comment as to whether GMOs are natural implicitly acknowledges that the agency has not yet ruled that they are.” In a footnote, the court pointed out that the comment period closed nearly four years ago, but nothing has happened yet.

Nor has the FDA blessed “wholesale nondisclosure.” Its nonbinding statements don’t say that, but rather say that “food labelers have no general freestanding duty to disclose on a product’s label whether it contains GMOs.” That is not the same thing as saying “labelers never need to disclose whether their products contain GMOs, even when those labels might otherwise violate generally applicable consumer protection laws.” FDA’s draft guidance says that “the use, or absence of use, of bioengineering in the production of a food is not a fact that is material either with respect to consequences resulting from the use of the food or due to representations on the labeling.” But “[e]ven if that guidance generally blesses silence regarding GMO ingredients, it falls far short of blessing an affirmative misrepresentation concerning the presence of such ingredidents.” 

Indeed, the FDA also suggested that labels indicating GMO absence could be misleading, for example “if they imply that the food is superior because the food is not bioengineered.”  Lee’s argument was that Conagra “misled customers in an analogous way, with a similar—albeit somewhat vaguer—representation.”

Conagra also tried to rely on the National Bioengineered Food Disclosure Standard (NBFDS): in 2016, Congress required USDA to come up with a method for disclosing “bioengineered” ingredients in food products. The Final Rule establishes that, where “[a refined] food does not contain detectable modified genetic material,” bioengineered disclosure is not required. Additionally, “some oil refining processes may effectively eliminate all DNA” in the product, so “degummed refined vegetable oils and various other refined ingredients are unlikely to require [bioengineered] food disclosure . . . .”  

But, even assuming that the USDA rule frees Conagra of any disclosure obligation, “it says nothing of representations suggesting GMOs’ absence.” The rule specifically says that it covers “mandatory and voluntary bioengineered . . . claims,” and that there is no authority for an “absence claims regime,” over which FDA retains authority.  True, the NBFDS forbids states from directly or indirectly establishing “any requirement relating to the labeling of whether a food . . . is genetically engineered . . . or was developed or produced using genetic engineering.” But Lee wasn’t seeking a disclosure requirement and the NBFDS doesn’t cover absence claims, so there was no preemption.

[I see the preemption argument, but do we really think that states could not act against literally false "not bioengineered" claims on food that was concededly made with bioengineered ingredients?  That seems an extreme reading of the statute, which was designed to prevent states from requiring disclosure of bioengineering (even on the theory that failure to disclose was inherently a misleading omission), not from regulating falsity in general. If we think that states could act against such claims, then the question is whether "100% Natural" means "not bioengineered" to a substantial number of reasonable consumers.]

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