What Manufacturers Need to Know About “Natural” Labeling

Contributed by Natalie Blazer

As we have previously reported, consumers are bringing lawsuits in increasing numbers over food companies’ use of the terms “natural,” “all-natural,” or “100% natural” on their product labels. At the risk of oversimplifying, these days a “natural” food label seems to practically guarantee that a complaint will be brought against a manufacturer. While standard business practices and precautions should obviously be taken first and foremost at the food packaging and labeling stage, there are also lessons to be learned from recent litigation in this area (once the product is already labeled), as well as the actions (or lack thereof) taken by the Food and Drug Administration.

FDA and the Term “Natural”

As I reported in July and my colleague noted last month, courts recently faced with food labeling lawsuits relating to some variation of the term “natural” have punted to the FDA, finding that the issue of what foods should qualify as “natural” is a decision for the regulatory agency, not the judiciary. This move by a judge may buy manufacturers time given that the FDA has declined to answer this very question for at least the last three years.

But it can work in the manufacturer’s favor in other ways, too. The FDA’s decision not to restrict use of the term “natural” dates back to 1993, when the agency stated that it “will maintain its policy…regarding the use of ‘natural,’ as meaning that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in the food.” In other words, despite its refusal to issue an actual rule on what the term “natural” means, the FDA has made clear that the term should be restricted only in a very limited fashion.

Thus, manufacturers faced with any variant of a “natural” food labeling suit should be armed with an argument that the absence of any official definition of “natural” by the FDA, the regulatory body that has the authority to decide such matters, as well as its refusal to restrict the term beyond the minimum limitations it announced in 1993, means their labels are perfectly appropriate and not misleading.   Manufacturers can also argue that the case should be dismissed under the primary jurisdiction doctrine, which permits a court to remove a case from its courtroom when court action might interfere with a federal agency’s statutory authority. This defense, however, has been met with varied success.

Are GMOs “Natural”?

One of the most common complaints alleged by consumers in the “natural” lawsuits is that the presence of genetically modified organisms (“GMOs”) automatically renders a product not “natural,” and thus any “natural” label on the product is inherently deceptive. As our readers may know, GMOs are plants that grow from seeds in which DNA splicing has been used to place genes from another source into the plant. Because medical research and scientific studies ostensibly have yet to determine the long-term health effects of genetically engineered foods, the plaintiffs in these lawsuits typically allege that GMOs pose a potential threat to consumers.

However, the FDA has for decades approved genetic modification (also known as “bioengineering”) as a safe and effective means of crop production. As stated in its 1992 Statement of Policy: Foods Derived From New Plant Varieties, the agency “is not aware of any information showing that foods derived by these new [genetic modification] methods differ from other foods in any meaningful or uniform way, or that as a class, foods developed by these new techniques present any different or greater safety concern than foods developed by traditional plant breeding.” Moreover, the FDA has on several occasions reaffirmed its policy that for purposes of food labeling, there is no material difference between genetically modified crops and traditionally-grown crops. It has even gone so far as to say that because bioengineering techniques are “more precise [than traditional plant breeding methods,] they increase the potential for safe, better-characterized, and more predictable foods.”

Thus, because the FDA has allowed bioengineered foods to become the overwhelming bulk of corn and soy crops grown in this country, a manufacturer whose products contain such ingredients could argue that its products are in fact “natural” (based on both the FDA’s own statements, as well as the prevalence of such ingredients in today’s market, making GMO products the norm). Indeed, manufacturers could point to the fact that the FDA has effectively created the only generally accepted meaning of the term “natural,” and that nothing in the definition excludes genetically modified ingredients. (The FDA has prohibited the use only of the term “organic” when GMOs are present, but this is a very different issue from whether the product is “natural.”)

Potential for Class Certification

Relatively few food-labeling lawsuits of any kind have advanced to the class certification stage, and to our knowledge no food-labeling lawsuits relating to GMOs have made it that far. Interestingly, some defenses that have failed to prevent non-GMO related food-labeling lawsuits from being certified might prove useful in the GMO product context. For example, some courts have certified classes in non-GMO food product cases over defendants’ objections that consumers had different reasons for purchasing the products and that many of the class members did not rely on the allegedly misleading statements. This is because many states hold that individual reliance is not a requirement of their consumer protection statutes as long as the alleged misrepresentation was “material.” In other words, reliance is deemed satisfied if it can be determined that a reasonable class member would likely be deceived by the product labeling claim. But the issue of “reasonable reliance” in the GMO context seems to be fundamentally different: given that GMO may still be considered “natural” as viewed through the prism of the FDA’s pronouncements (unlike when artificial additives are included), arguably there would be no reasonable common understanding among consumers that GMO is not “natural”, thereby potentially eliminating the presumption of reliance.

Manufacturers can expect to continue fighting off plaintiffs on the “natural” label issue, since these lawsuits aren’t going away anytime soon. At least for now, food companies are somewhat cushioned by the inaction of the FDA to define “natural” or to update its policy on GMOs in the last 20 years. In the class action context, a manufacturer’s best argument may be that the Rule 23 procedural device cannot be used to have the judiciary establish for all consumers, in one lawsuit, what “natural” means, when other methods for doing so (e.g. regulatory action) are superior to the class action vehicle. Ultimately, in light of the FDA’s pronouncements regarding what is “natural,” manufacturers have strong substantive arguments that plaintiffs cannot show – considering FDA policy – that the “natural” label of a product is deceptive or misleading.