Grocery Mfrs. Ass'n, Snack Food Ass'n, Int'l Dairy Foods Ass'n, & Nat'l Ass'n of Mfrs. v. Sorrell

Decision Date27 April 2015
Docket NumberCase No. 5:14–cv–117.
Citation102 F.Supp.3d 583
PartiesGROCERY MANUFACTURERS ASSOCIATION, Snack Food Association, International Dairy Foods Association, and National Association of Manufacturers, Plaintiffs, v. William H. SORRELL, Peter E. Shumlin, Tracy Dolan, and James B. Reardon, Defendants.
CourtU.S. District Court — District of Vermont

Catherine E. Stetson, Esq., E. Desmond Hogan, Esq., Mary H. Wimberly, Esq., Hogan Lovells U.S. LLP, Washington, DC, Matthew B. Byrne, Gravel & Shea PC, Burlington, VT, for Plaintiffs.

Alan D. Strasser, Esq., Daniel N. Lerman, Esq., Lawrence S. Robbins, Esq., Lee Turner Friedman, Esq., Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, DC, Jon T. Alexander, Esq., Kate T. Gallagher, Kyle H. Landis–Marinello, Esq., Vermont Office of the Attorney General, Montpelier, VT, for Defendants.



Pending before the court are a motion to dismiss (Doc. 24) filed by Defendants William H. Sorrell, Peter E. Shumlin, Tracy Dolan, and James B. Reardon (collectively, the State) and a motion for a preliminary injunction (Doc. 33) filed by Plaintiffs Grocery Manufacturers Association (GMA), Snack Food Association (SFA), International Dairy Foods Association (IDFA), and National Association of Manufacturers (NAM) (collectively, Plaintiffs).

The State's motion asks the court to dismiss Plaintiffs' Amended Complaint in its entirety for failure to state a claim for which relief may be granted. Fed.R.Civ.P. 12(b)(6). Plaintiffs' motion asks the court to enjoin the State's enforcement of Act 120 in its entirety pending a resolution of the case at trial. Fed.R.Civ.P. 65(a). The court heard oral argument on January 7, 2015, at which point the court took the pending motions under advisement. Because the State's motion to dismiss winnows the claims for which Plaintiffs may seek a preliminary injunction, the court addresses that motion first. In the course of analyzing the motion to dismiss, the court considers whether Plaintiffs are likely to prevail on the merits of their claims at trial, which is an essential component of their request for preliminary injunctive relief.

Plaintiffs are represented by Catherine E. Stetson, Esq., E. Desmond Hogan, Esq., Mary H. Wimberly, Esq., and Matthew B. Byrne, Esq. The State is represented by Alan D. Strasser, Esq., Daniel N. Lerman, Esq., Lawrence S. Robbins, Esq., Lee Turner Friedman, Esq., Vermont Assistant Attorney General (“VTAG”) Megan J. Shafritz, VTAG Jon T. Alexander, VTAG Kate T. Gallagher, VTAG Kyle H. Landis–Marinello, and VTAG Naomi Sheffield.

The following Amicus Curiae have filed briefs in support of Act 120: the Vermont Public Interest Research Group and the Center for Food Safety, which are represented by Laura B. Murphy, Esq.; The Vermont Community Law Center, which is represented by Jared Kingsbury Carter, Esq. and William B. Peard, Esq.; and the Free Speech For People, Inc., which is represented by Ronald A. Fein, Esq. and Anthony N.L. Iarrapino, Esq.

I. Factual and Procedural Background.
A. The Amended Complaint.

Plaintiffs' Amended Complaint challenges Act 120's requirement that certain manufacturers and retailers identify whether raw and processed food sold in Vermont was produced in whole or in part through genetic engineering (Act 120's “GE disclosure requirement”)1 and which prohibits manufacturers from labeling or advertising GE foods as “natural,” “naturally made,” “naturally grown,” “all natural,” or “any words of similar import” (Act 120's ‘natural’ restriction”).

Count One of the Amended Complaint alleges Act 120's GE disclosure requirement violates the First Amendment; Count Two claims Act 120's “natural” restriction violates the First Amendment; Count Three asserts Act 120's “natural” restriction is impermissibly vague in violation of the First and Fifth Amendments; Count Four alleges Act 120 violates the Commerce Clause; and Count Five asserts Act 120 is preempted by various federal statutes. With regard to each claim, Plaintiffs allege a violation of the Fourteenth Amendment, as they are suing defendants for their actions under the color of state law. See U.S. Const. amend. XIV, § 1.

B. Act 120.

Act 120 was signed on May 8, 2014 and will be enforceable effective July 1, 2016 (the “effective date”). It requires that “food intended for human consumption offered for sale by a retailer” after the Act's effective date “be labeled as produced entirely or in part from genetic engineering if it is a product: (1) offered for retail sale in Vermont; and (2) entirely or partially produced with genetic engineering.” 9 V.S.A. § 3043(a). Genetic engineering (“GE”) is defined as “a process by which a food is produced from an organism or organisms in which the genetic material has been changed” through the application of:2

(A) in vitro nucleic acid techniques,3 including recombinant deoxyribonucleic acid (DNA) techniques and the direct injection of nucleic acid into cells or organelles; or

(B) fusion of cells (including protoplast fusion) or hybridization techniques that overcome natural physiological, reproductive, or recombination barriers, where the donor cells or protoplasts do not fall within the same taxonomic group, in a way that does not occur by natural multiplication or natural recombination.

9 V.S.A. § 3042(4).

Act 120 applies to raw agricultural commodities, which are defined as “any food in its raw or natural state, including any fruit or vegetable that is washed, colored, or otherwise treated in its unpeeled natural form prior to marketing.” 9 V.S.A. § 3042(10). It also applies to processed foods, which are defined as “any food other than a raw agricultural commodity and includes any food produced from a raw agricultural commodity that has been subjected to processing such as canning, smoking, pressing, cooking, freezing, dehydration, fermentation, or milling.” 9 V.S.A. § 3042(8).

A GE manufacturer is subject to Act 120 if it:

(A) produces a processed food or raw agricultural commodity under its own brand or label for sale in or into the State;

(B) sells in or into the State under its own brand or label a processed food or raw agricultural commodity produced by another supplier;

(C) owns a brand that it licenses or licensed to another person for use on a processed food or raw commodity sold in or into the State;

(D) sells in, sells into, or distributes in the State a processed food or raw agricultural commodity that it packaged under a brand or label owned by another person;

(E) imports into the United States for sale in or into the State a processed food or raw agricultural commodity produced by a person without a presence in the United States; or

(F) produces a processed food or raw agricultural commodity for sale in or into the State without affixing a brand name.

9 V.S.A. § 3042(6).

1. Act 120's GE Disclosure Requirement.

Act 120 requires that a “packaged raw agricultural commodity” be labeled by GE manufacturers “with the clear and conspicuous words ‘produced with genetic engineering.’ 9 V.S.A. § 3043(b)(1). If the “raw agricultural commodity” is not sold separately packaged, then a GE retailer must “post a label” on the shelf or bin “with the clear and conspicuous words ‘produced with genetic engineering.’ 9 V.S.A. § 3043(b)(2). Packaged processed food must be labeled by a GE manufacturer with the words: ‘partially produced with genetic engineering,’ or ‘may be produced with genetic engineering,’ or ‘produced with genetic engineering.’ 9 V.S.A. § 3043(b)(3). Act 120 states it “shall not be construed to require” either “the listing or identification of any ingredient or ingredients that were genetically engineered” or “the placement of the term ‘genetically engineered’ immediately preceding any common name or primary product descriptor of a food.” 9 V.S.A. § 3043(d).

2. Act 120's “Natural” Restriction.

Act 120 prohibits GE manufacturers from using labeling, advertising, or signage indicating that a GE food product is ‘natural,’ ‘naturally made,’ ‘naturally grown,’ ‘all natural,’ or any words of similar import that would have a tendency to mislead a consumer.” 9 V.S.A. § 3043(c). Act 120 does not define the term “natural” or the phrase “any words of similar import.”

3. Act 120's Exemptions and Penalties.

Act 120 exempts certain products from its embrace, including alcoholic beverages subject to Title 7 of Vermont's statutory code and food not packaged for retail sale that is “a processed food prepared and intended for immediate human consumption” or that is “served, sold, or otherwise provided in any restaurant or other food establishment.” 9 V.S.A. § 3044(4), (7)(A)-(B). It also exempts [f]ood consisting entirely of or derived entirely from an animal which has not itself been produced with genetic engineering, regardless of whether the animal has been fed or injected with any food, drug, or other substance produced with genetic engineering.” 9 V.S.A. § 3044(1).

A GE manufacturer or retailer may obtain an exemption from Act 120 for any food “grown, raised, or produced without the knowing or intentional use of food or seed produced with genetic engineering” by providing its own “sworn statement,” or verification from an independent organization, that the food “has not been knowingly or intentionally produced with genetic engineering and has been segregated from and has not been knowingly or intentionally commingled with food that may have been produced with genetic engineering at any time.” 9 V.S.A. §§ 3044(2), (6); 3045(b). Act 120 provides that a “person” is liable for any “false statement” made in the course of obtaining this exemption. 9 V.S.A. § 3047.

Under Act 120, any “person” who violates its requirements is “liable for a civil penalty of not more than $1,000.00 per day, per product,” which “shall accrue and be assessed per...

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