An Exemplar Company
Saturday, November 01, 2014
California Right To Know Genetically Engineered Food Act

Remember the Magic 8 Ball toy we used to rely on as kids to predict the future? How would it answer the following questions: (1) Will California’s Proposition 37 pass and (2) If it does, will it actually provide long-term public benefit?

What does Prop 37 do?

The formal name of Prop 37 is The California Right To Know Genetically Engineered Food Act (full text here). If passed in next week’s election, the Act will require clear labeling of genetically modified foods (more commonly referred to as Genetically Modified Organisms or GMOs) sold in California with the following exceptions: organic foods; meat that itself is not genetically modified (including that raised on GMO feed or medicines); alcohol; food served in restaurants; foods used for medical purposes and some processed foods. Prop 37 also prohibits labeling or advertising GMOs as “natural,” and requires that raw agricultural commodities containing GMOs be labeled “Genetically Engineered,” and processed foods containing GMOs be labeled “Partially Produced with Genetic Engineering” or “May Be Partially Produced with Genetic Engineering.”

Will Prop 37 pass?

California voters placed Prop 37 on the ballot with over 950,000 signatures (As of May 2012 there were 17 million registered voters in California). Until recently all polls consistently showed Prop 37 succeeding, though the percentages by which differ widely. On October 1, 2012, an extensive study of Prop 37 — funded by the Willard Sparks Endowment at Oklahoma State University — indicated overwhelming support by 76% of likely California voters. A poll from October 11, 2012, showed Prop 37 passing by a margin of 48% to 40%. It appears money can make a difference as a new poll by the California Business Roundtable and the Pepperdine University School of Public Policy showed 39.1% of likely voters support the measure, while 50.5% oppose the labeling requirement. Undecided voters represented 10.5% of respondents. $43,000,000 has been spent on this ballot initiative thus far.

If Prop 37 passes, will it have any lasting effect?

The Act states, “Commencing July 1, 2014, any food offered for retail sale in California is misbranded if it is or may have been entirely or partially produced with genetic engineering and that fact is not disclosed …” Once it passes, expect its opponents to immediately head to court to prevent it from becoming law. Such a tactic may delay the effective date of the Act, while ironically confirming opposition’s claim that the Act will result in expensive litigation.

Presuming that The Right To Know Act ultimately becomes law, is an onslaught of litigation certain? The Act is enforceable in California Superior Court by any aggrieved person who may seek a temporary or permanent injunction restraining violations of the Act. Plaintiffs do not have to prove the absence of an adequate remedy at law, nor irreparable loss or damage or special individual injury or damages. In less legalese-y words, anyone damaged by the misbranding of GMO food can ask the court to prevent the advertisement and/or sale of such food. So will Prop 37 be just another cash cow for plaintiff’s lawyers, like Prop 65 has become?

Prop 65 is the 1985 California voter initiative that became the Safe Drinking Water and Toxic Enforcement Act of 1986, though most people still refer to it as Prop 65. It passed by a huge margin (63%) and requires the State to publish an annually updated list of chemicals known to cause cancer or birth defects or other reproductive harm. This list first was published in 1987 and now includes approximately 800 chemicals. Businesses operating in California are required to notify Californians about significant amounts of listed chemicals in their products or buildings, or that they are releasing into the environment. Specifically, the business must provide a "clear and reasonable" warning before knowingly and intentionally exposing anyone to a listed chemical. Alcohol-consumption warnings are the most well-recognized warning resulting from Proposition 65 … or are they?

Critics bet you don’t even notice those warnings anymore. They argue that Prop 65 has limited benefit unless you’re a law firm or litigant (in which case, Prop 65 has been a well of good fortune). Since individuals acting in the public interest are entitled to enforce the law, several private suits were filed and then settled for significant fee awards to plaintiff’s attorneys while providing no environmental benefit for Californians. This abuse of the legal system forced enactment of a regulation requiring the CA Attorney General to approve all pre-trial Prop 65 settlements.

Prop 37 includes some protections to prevent similar “shakedown lawsuits.” It requires would-be plaintiffs to give defendants an opportunity to fix their labeling before any class action suit can be filed. Additionally, penalties from violations of Prop 37 go to the state, not to plaintiffs or their lawyers. The Act does give the court discretion to award attorneys’ fees and costs, and that is likely to be the determining factor in how much litigation actually gets generated under the Act. Frequent attorneys’ fee awards will result in frequent lawsuits, and conversely. So at this point, it’s really a game of wait and see.