Federal Court Refuses to Enjoin Enforcement of Vermont GMO Labeling Law

April 28, 2015 | Kristine A. Tidgren

A federal court in Vermont recently denied the request of food manufacturers to enjoin the enforcement of Vermont’s new Genetic Engineering (GE) labeling law set to go into effect next year. The court did, however, also refuse to dismiss the majority of the plaintiffs’ claims. As such, the validity of the law remains unsettled, and more opinions will issue down the road.

Vermont Act 120 was signed into law on May 8, 2014. It is set to become effective July 1, 2016. The law requires food sold in Vermont by a retailer to be labeled “produced entirely or in part by genetic engineering” if it is made from an organism that has had its genetic material changed.  The Act applies to both raw foods, such as fruits and vegetables, and processed foods. The law imposes the labeling burden on manufacturers for packaged food and on retailers for raw food that is not separately packaged. For bulk produce, for example, the retailer must post a conspicuous label on the shelf or bin where the raw food is sold. The law also prevents manufacturers from labeling any food made with GE ingredients as “natural.” The Vermont Legislature stated that the purpose of the law was to allow consumers to make informed choices regarding the “health effects” of the food they purchase, to inform consumers concerned about “environmental effects,” and to reduce and prevent consumer “confusion and deception.”

The Grocery Manufacturers Association, the Snack Food Association, the International Dairy Foods Association and the National Association of Manufacturers challenged the law, urging that it was unconstitutional. They asserted in their federal complaint against Vermont state officials that the law violates their members’ First Amendment rights and places an impermissible burden on interstate commerce. They also contend that the law is preempted by federal labeling laws. The plaintiffs’ members allege that it is virtually impossible to manufacture many foods with non-GE sources. They state that the availability of non-GE products simply does not meet demand. As such, the manufacturers allege that they will be forced to relabel the “vast majority” of their products. This, they assert, will require significant expenditures that are virtually impossible to quantify. The plaintiffs also assert that smaller manufacturers may not be able to bear these costs. As such, market competition in Vermont may be lessened to include only those large manufacturers able to afford the cost of the labeling burden.

The defendants filed a motion to dismiss, arguing that the plaintiffs had failed to state a claim for which relief could be granted. The plaintiffs asked the court for a preliminary injunction, specifically asking the court to enjoin enforcement of the new law.

Yesterday, the court granted in part and denied in part the defendants’ motion to dismiss. The court dismissed the plaintiffs’ claims asserting a violation of the dormant commerce clause. The court ruled that the plaintiffs had failed to assert a plausible claim that the law clearly discriminates against interstate commerce. The burden imposed on interstate commerce, the court found, was no different than the burden placed on intrastate commerce. The court also dismissed several of the plaintiffs’ preemption claims, but allowed several others, namely those alleging preemption by Federal Meat Inspection Act and the Poultry Products Inspection Act, to continue. The court also allowed the First Amendment claims to continue, although the court seemed inclined to dismiss the claim contesting the GE disclosure requirements. The court ruled that this provision was constitutional under the applicable Zauderer test. Specifically, the court stated that the law bore a reasonable relationship to the harm it sought to prevent: the deception of customers. The question for another day is whether the Zauderer test requires a “substantial governmental” interest. The court also found that the plaintiffs had stated a plausible claim that the “natural” restriction violated their members’ First Amendment rights.

Finally, the court rejected the plaintiffs’ request for a preliminary injunction, finding that they had not shown persuasive evidence that their members would prevail on the merits and that they would suffer irreparable harm absent enjoinment of the enforcement of the law.

This case raises several questions similar to those raised in the California egg case. How much can the laws of one state dictate requirements for nationwide manufacturers? Are laws such as the GM labeling law at issue preempted by existing federal laws? We'll write in more detail about this case as it unfolds. This is the first of what could become many state GE labeling laws. In February, a similar GMO labeling bill, HF147, was introduced in the Iowa House. It died in committee with no action taken.

The Vermont case is Grocery Manufacturers Association v. Sorrell, No. 5:14-cv-117 (U.S. Dist. Ct. Vt. April 27, 2015).