The Second Circuit Court of Appeals is currently in the midst of an interlocutory appeal by the Grocery Manufacturer’s Association (“GMA”) and others of the District Court of Vermont’s denial of a request for a preliminary injunction against Vermont’s “Right to Know” Act. 

The Act, passed by the Vermont legislature on May 8, 2014, and effective July 1, 2016, has the stated goal of establishing a system to allow for informed decisions by consumers with respect to the potential health effects of “genetically engineered foods,” commonly referred to as “GMOs.”  The Act applies to products entirely or partially produced with genetic engineering, with a focus on raw agricultural commodities and covered processed foods.  Labels on covered food products must either state that they are “produced with genetic engineering” or “may be produced with genetic engineering.”  Limited exceptions are made for foods derived entirely from animals, restaurant foods, alcoholic beverages and foods that have been independently verified to have “minimal” GMO content.  Penalties under the Act include $1,000.00 per day, per product, fines for food manufacturers.

The GMA filed its initial Complaint with the District Court in June 2014, and sought a preliminary injunction in September 2014.  U.S. District Judge Christina Reiss refused to enjoin the law in a ruling issued on April 27, 2015, which was promptly appealed to the Second Circuit.  Oral argument in the appeal took place on October 8, 2015.  

The crux of the issue before the Second Circuit is the proper standard for evaluating GMA’s position that the Act violates the First Amendment by imposing a burden on speech by, inter alia, food manufacturers, based upon the content of that speech.  In reaching her decision to deny the preliminary injunction, Judge Reiss applied the less-stringent First Amendment analysis set forth in Zauderer v. Office of Disciplinary Counsel,  471 U.S. 626 (1985).  Given what the appellants term the “controversial” information/disclosures mandated by the Act, they argue the U.S. Supreme Court’s decision in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980) and its stricter level of scrutiny applies.  Appellants further rely on Second Circuit precedent, arguing that the case of Int’l Dairy Foods Ass’n v. Amestoy, 92 F.3d 67 (2d Cir. 1996), bars the state legislature from enacting a law that “trammel[s] manufacturer’s free speech rights to appease “consumer curiosity” and was ignored by the District Court.  The State of Vermont continues to argue that the District Court’s reliance on Zauderer and its less-stringent “rational basis” test was proper, in that the Act merely serves to provide consumers with “factual information.”

The Second Circuit panel reviewing the case addressed the issue of ripeness during oral argument, and remains, given the impact of the Act as the first of its kind to have a set effective date, at the forefront of debate over the regulation of GMO food and food products.  The Second Circuit’s decision bears watching, as the costs to industry resulting from enactment of the Act and the potential domino effect of similar acts being passed by other state legislatures could be significant and will require extensive advanced planning to ensure compliance.

The Second Circuit case is Grocery Manufacturers Association, et al. v. Sorrell, Case No. 15-1504.  The District Court case is Case No. 5:14-cv-117 and the Court’s order denying the preliminary injunction is Document #95.  A link to a .pdf copy of the Order is provided immediately here.