Lawyer: Prop 37 will overtake Prop 65 as a source of consumer litigation in California

10-Oct-2012 - Last updated on 11-Oct-2012 at 13:37 GMT

Prop 37 is likely to surpass Prop 65 as a source of consumer litigation in California if the controversial GMO labeling initiative gets the green light next month, predicts one San Francisco-based lawyer.

Michael Jacob Steel, partner in the San Francisco office of law firm Morrison Foerster, has helped defend several clients against Prop 65 lawsuits.

He told FoodNavigator-USA: “Prop 65 at least has a few safeguards; but with Prop 37 you don’t even have to have bought the product, you can file immediately, you don’t have to give a 60-day notice, there’s no public interest requirement, and no requirement to alert the attorney general and state prosecutors.

More incentives to sue?

Prop 37 also gives citizen enforcers more incentives to sue, he claimed.

“For example, Prop 65 allows penalties of up to $2,500 per day, per violation, with 25% of the penalty being payable to the plaintiff. Successful plaintiffs may also obtain attorney fees.

“However, plaintiffs suing under Prop 37 may be able to recover both actual and punitive damages. They may also be able to collect not only attorney fees, but the costs of investigating and prosecuting the action.”

He added: “I’m expecting that if it passes, we’ll see a lot of lawsuits. Probably two kinds: suits against major food and beverage manufacturers brought by sophisticated lawyers used to dealing with sophisticated opponents; and suits against Mom and Pop stores brought by smaller legal firms.”

Exemptions under Prop 37

At the heart of Prop 37 - which will become law in July 2014 if Californians vote ‘yes’ on Nov 6 - is a requirement for companies to disclose if foods sold in California are “genetically engineered” (for raw agricultural commodities) or “may have been entirely or partially produced with genetic engineering” (for processed foods and supplements).

It excludes alcohol, medical foods, food served in restaurants, GE processing aids and enzymes, and meat from animals fed GE feed, and allows for deliberate addition of GE ingredients at levels of up to 0.5% (this threshold will fall to zero in 2019).

It also establishes an exemption for foods certified organic.

Products are also exempt if manufacturers/retailers can obtain sworn statements affirming the absence of GE processing from every supplier of every ingredient inside; or if they can prove the products have “not been knowingly and intentionally produced from or commingled with genetically engineered seed or food”.

Proving your product was not knowingly and intentionally made with GE could be challenging

soy-field — According to Margaret Smith, Cornell University professor of plant breeding and genetics, in 2012, genetically engineered varieties were grown on 88% of U.S. field corn acres and 93% of soybean acres

Due to the way the law is written, however, Steel said he expect plaintiffs to argue that food retailers/manufacturers must be able to meet both the above hurdles: ie. They must prove their food was “not knowingly and intentionally” genetically engineered AND get sworn statements from suppliers

In other words, before sworn statements even come into play, the defendant may first have to submit to discovery on the question of knowledge and intent (and “proving the negative—that one did not know something—is very difficult” - says Steel), with the associated threat of expensive and time-consuming depositions, interrogatories and document production.

Sworn statements would only come into play if the defendant could get past this initial hurdle, predicted Steel, making it much more likely companies will choose to settle.

Will GM labels on everything become like so much wallpaper?

Food-shopping-istock-Victor-Melniciuc — Margaret Smith, Cornell University professor of plant breeding and genetics, says: “If this law passes, most packaged products would have to carry a genetically engineered label. That leaves consumers in about the same place they are now: If they prefer not to consume these products, their primary alternative would still be to choose certified organic. One needs to ask what benefit will be gained by this new label and is it worth the cost.”

Some commentators have argued that GM labels will become so ubiquitous if Prop 37 passes (GM corn and soy are in most packaged foods) that the food industry should simply bite the bullet, slap labels on everything apart from organics or products certified Non-GMO, and see whether it really dents sales.

After all, if 7-8 out of 10 products they normally buy suddenly include a GM label in July 2014, are shoppers really going to panic, buy nothing, or switch to organic, or will they just shrug their shoulders and carry on filling their shopping carts as usual?

However, clients do not see it that way, said Steel.

First of all, they don’t accept the scientific or consumer-interest rationale behind putting what they feel will be seen as warning labels on products containing safe and legal ingredients that have been used in the food supply for years - and are already listed on the ingredients list.

Secondly, he said, it’s not just a case of everyone biting the bullet and adding a GM label to everything that’s not certified organics or Non-GMO Project verified.

“If 70% or more of foods are genetically engineered in the US, what about the other 30%? They are not all organic, so there will be grey areas."

ABA: Prop 37 will kill off natural baked goods category in California

The American Bakers Association told FoodNavigator-USA it is particularly concerned about Prop 37's definition of 'natural', which would exclude all baked goods, regardless of whether they contain GMOs, said SVP, Government Relations & Public Affairs, Lee Sanders.

Under Prop 37, firms cannot use the word ‘natural’ on products classified as ‘processed food’, the definition of which is ”any food produced from a raw agricultural commodity that has been subject to processing, such as canning, smoking, pressing, cooking, freezing, dehydration, fermentation or milling”.

She added: "The process of baking would disallow products from being considered natural. Baked goods, like many other food products, undergo cooking, and thus would be captured under the proposition."

Click here to read the text of Proposition 37 (The California Right to Know Genetically Engineered Food Act).