On May 7, 2020, the First Circuit handed down Lee v. Conagra Brands, Inc., which reinstates a previously-dismissed complaint alleging that Wesson Oil labeled “100% Natural” is plausibly misbranded because it contains corn oil made with GMOs. Until now, GMO class actions have had a mixed reception in the district courts. Lee is the first circuit court decision to embrace such a claim.
The First Circuit held that, at least as a pleading matter, FDA’s failure to define whether GMOs are “synthetic” does not preclude a finding that the label could be deceptive under state unfair and deceptive practices laws. In so holding, the Court got past several barricades that, in the past, have prompted courts to preclude such claims.
First, the Court rejected Conagra’s argument that this claim was tantamount to a requirement that Conagra affirmatively disclose the presence of GMOs. Not so, said the First Circuit. The complaint did not seek a disclosure contrary to FDA’s informal natural policy, only damages for deceptive advertising. In the process, the Court dispensed a bit of labeling advice of its own: If the district court were to enjoin Conagra’s labels, there is still no conflict because “Conagra could almost certainly comply” with FDA labeling requirements by removing the statement that Wesson Oil is “100% Natural.”
Second, the Court noted that FDA has not stated that GMOs are natural or may be advertised as such, only that “a product may not be labeled as ‘natural’ if it contained anything ‘artificial or synthetic (including all color additives regardless of source).’” Nor was the Court troubled by FDA’s 2015 request for comment as to whether GMOs are natural. To the contrary, because “FDA has not yet forged the regulatory ‘safe harbor’ that Conagra imagines,” FDA’s statements to date “would not foreclose a jury from finding that the use of ‘100% Natural’ on Wesson Oil labels could deceive consumers into believing that the product was GMO-free.”
Third, it rejected Conagra’s argument that, given FDA’s Guidance, a manufacturer never has to affirmatively disclose GMOs. As the First Circuit put it, “[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 ingredients.”
Finally, unlike some other courts, the First Circuit concluded that the USDA’s Final Rule on the National Bioengineered Food Disclosure Standard is of no help to Conagra either. There, Congress preempted state laws that establish food labeling standards that deviate from USDA’s GMO standards. But “[e]ven if we assume without deciding that the USDA sought to free Conagra of any obligation to disclose the presence of GMOs in Wesson Oil, it says nothing of representations suggesting GMOs’ absence.”
If you have any questions concerning the material discussed in this client alert, please contact the following members of our Food, Drugs, and Devices practice.
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