“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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