The FDA Gets Pulled Into the "Natural" Labeling Fray: Surprise Move May Change the Food Fight

by McGuireWoods LLP

In a surprising change of tack, the U.S. Food and Drug Administration (FDA) announced Tuesday that it will accept public comments on the use of "natural" claims on food labels. The move, which may signal FDA's intention to formally regulate use of the term, has potentially far-reaching consequences in a number of different arenas. Crucially, an FDA rule defining "natural" might provide consumers more certainty about the food they eat, could trump increasingly common state legislation on the subject and may curtail the flood of class-action litigation challenging "natural" claims on products that contain genetically engineered organisms (GMOs) or bioengineered ingredients, or that are otherwise processed in a manner objectionable to certain stakeholders.

Until Tuesday, the FDA has steadfastly refused to regulate the term "natural" on food packaging. In 1993, the FDA issued nonbinding guidance that the term "natural" meant "nothing artificial or synthetic, including food coloring, had been included or added to the food." Genetic engineering and other innovation quickly rendered that guidance virtually meaningless. Since 1993, though, the FDA has repeatedly declined to provide binding guidance on the term. Just last year, the FDA declined pointed requests from three federal judges who stayed consumer class-action litigation and asked the agency to determine the meaning of the term "natural."

The uncertainty engendered by the FDA's inaction created a void that litigation and patchwork legislation across the county attempted to fill – particularly with regard to food containing GMOs. For example, in 2014, Vermont passed a law prohibiting the use of "natural" claims on foods that contain GMOs, legislation which was vigorously opposed by many in the food and beverage industry. In response, divergent interests in the U.S. Congress have introduced competing federal legislation to resolve the same issue nationally. But an FDA rule could preempt state legislation, and relieve the pressure Congress might otherwise feel to act. In contrast to the FDA, the USDA has long enforced a definition of the term "natural" for the foods it regulates (meat, poultry and egg products, in the most general terms). That definition provides consumers and industry with certainty and, combined with the preemptive effect of the USDA labeling-approval regime, virtually eliminates labeling litigation for USDA-regulated foods. Most consumers and many producers of FDA-regulated foods have long hoped that FDA would take similar action – and this announcement may be a step in that direction.

The regulation of the term "natural" by the FDA might affect food manufacturers in a number of different ways. Most obviously, any final rule would require manufacturers to change labeling that is not compliant with the new definition. While that may sound onerous, such a mandate would eliminate the current tension between marketers advocating liberal use of such claims on the one hand, and risk-averse legal departments counseling against the same on the other. Additionally, compliance with a new FDA definition of "natural" would likely insulate food and beverage manufacturers from civil liability under the express preemption clause of the Nutrition Labeling and Education Act (NLEA) or perhaps under a separate preemption provision contained in the new rule. Of course, a manufacturer's failure to comply with whatever rule or definition the FDA promulgates could open it up to enforcement by the government or civil suits by consumers under various state laws. Finally, a federal standard would presumably trump conflicting state laws under the Supremacy Clause allowing the industry to distribute its products nationwide, with one uniform standard applying.

More immediately, the fact that the FDA has invited public comment may lead courts to stay pending litigation in deference to the FDA's primary jurisdiction in this area. In 2014, three federal judges temporarily stayed class-action lawsuits against food manufacturers making "natural" claims and requested FDA input regarding "whether and under what circumstances food products containing ingredients produced using genetically engineered ingredients may or may not be labeled ‘natural.'" The FDA, however, declined to weigh in at that time. With the FDA showing little interest in joining the debate, courts since then have been reluctant to dismiss or stay "natural" labeling claims under the primary jurisdiction doctrine. However, FDA's announcement that it is entering the "natural" fray may prove to be a game-changer. Now, manufacturers can point to an ongoing FDA regulatory process which often results in a new rule and certainly represents a greater willingness to consider issuing such a rule. Under these circumstances, it appears likely that courts will more seriously consider staying litigation while the FDA completes the notice-and-comment rulemaking process.

The FDA's request for comment does not technically mean the FDA will eventually issue a rule defining the term "natural," but it provides a very strong signal to all interested parties that a regulation is possible. The McGuireWoods food and beverage team is ready to assist clients in preparing a comment to the FDA in the regulatory process and in defending companies whose "natural" claims are challenged in court.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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