We've had several clients ask for assistance in evaluating the potential effect of California's Proposition 37 on their food businesses. Prop 37, known as the “California Right to Know Genetically Engineered Food Act,” if passed, will make California the first state to require that food manufacturers label all food that contain ingredients made from genetically modified organisms.

Such mandatory labelling is similar to regulations in foreign markets, including the E.U., but would have significant effects here, particularly given how much of our current food would require new labeling (given the prominence of the use of genetically modified soy, corn and sugar beets here in the U.S.) and the "big unknown" – would the U.S. consumer (or the California consumer) reject products with a GM label, and instead opt for products that are not genetically modified, or would there be little effect on their purchasing decisions?

What is "known", in our view, is that, if passed, Prop 37 will result in a significant influx in consumer class action litigation against food manufacturers, which is already on the rise, and create uncertainty for food manufacturers regarding labeling and advertising.