California Federal Court Substantially Upholds Bioengineered Food Disclosure But Remands QR Code and Text Message Disclosure Options to USDA for Further Rulemaking

On September 13, 2022, a federal court in San Francisco decided an NGO-led challenge to the US Department of Agriculture’s (USDA) final rule establishing a national standard for the disclosure of bioengineered foods. At the center of this case, captioned Natural Grocers v. Vilsack, Case No. 20-cv-05151-JD (ND Cal.), is the 2016 National Bioengineered Food Disclosure Law (NBFDL), which set forth the first-ever national mandatory bioengineered food disclosure standard, and regulations promulgated by USDA to implement the law. 

The ruling rejected most of the Plaintiffs’ arguments, but remanded one aspect of USDA’s disclosure regulations for further rulemaking, allowing the rule to remain in effect while the agency reconsiders its statutory directives. Significantly, the court upheld the NBFDL’s preemption provision, reinforcing the US Congress’s intent to set forth national bioengineered food disclosure standards and protect regulated entities from being subjected to state-by-state requirements.  

Factual Background

In the NBFDL, Congress directed USDA to promulgate regulations requiring “that a bioengineering disclosure on labels for consumers take the form of ‘a text, symbol, or electronic or digital link,’” with the “disclosure option to be selected by the food manufacturer.” 7 USC § 1639b(b)(2)(D). The electronic or digital link (i.e., a QR code) must be accompanied by “on-package language’ indicating that the link provides access to food information, along with ‘a telephone number that provides access to the bioengineering disclosure.’” Id. § 1639b(d)(1), (4). 

The disclosure statute also required USDA to “conduct a study to identify potential technological challenges that may impact whether consumers would have access to the bioengineering disclosure through electronic or digital disclosure methods.” Id. § 1639b(c)(1). If the study determined “that consumers, while shopping, would not have sufficient access to the bioengineering disclosure through electronic or digital disclosure methods,” USDA must “provide additional and comparable options to access the bioengineering disclosure.” Id. § 1639b(c)(4). 

The NBFDL also “declared that the purpose of the disclosure statute was ‘to preempt state and local actions that mandate labeling of whether a food or seed is genetically engineered, and establish a mandatory uniform national disclosure standard for human food that is or may be bioengineered.’” See Order re Summary Judgment (Op.) at 2. Congress enacted an express preemption provision mandating that “[n]o State or a political subdivision of a State may directly or indirectly establish . . . any requirement relating to the labeling of whether a food . . . or seed is genetically engineered . . . or was developed or produced using genetic engineering, including any requirement for claims that a food or seed is or contains an ingredient that was developed or produced using genetic engineering.” Id. § 1639i(b).

The Agricultural Marketing Service (AMS), the arm of USDA that oversees the marketing of agricultural commodities, hired Deloitte Consulting to conduct the consumer electronic disclosure accessibility study mandated by Section 1639b(c)(1) of the statute. Deloitte found that “key technological challenges . . . prevented nearly all participants from obtaining the information through electronic or digital disclosure methods.” Op. at 4. It also found that the telephone numbers provided along with the electronic disclosure “do not provide a viable means of accessing the bioengineering disclosure,” and Deloitte therefore recommended “on-package identification,” including “a landline-enabled bioengineering disclosure” with “24-hour disclosure information via an automated recording,” and “a text message alternative for consumers who have access to a mobile phone.” Id. at 4-5.

Based on Deloitte’s findings, AMS concluded that “consumers would not have sufficient access to the bioengineering disclosure through electronic or digital means under ordinary shopping conditions at this time.” 83 Fed. Reg. at 65828. In an effort to satisfy Congress’s directive to “provide additional and comparable options to access the bioengineering disclosure,” 7 USC § 1639b(c)(4), AMS created an alternative disclosure option, relying on text messaging, that regulated entities could elect to use in lieu of the statutory options. 

AMS’s final regulations provide that regulated entities can comply with the disclosure requirement by including on a food label one of the following: (i) the statement “Bioengineered food” or “Contains a bioengineered food ingredient” (the text disclosure); (ii) a symbol that says “bioengineered” (the symbol disclosure); (iii) an electronic or digital disclosure link (i.e., a QR code) with accompanying text (the electronic disclosure); or (iv) text message instructions (the text message disclosure). 7 CFR §§ 66.100(b)(1)-(4), 66.102, 66.104, 66.106, 66.108.

AMS’s regulations also defined “bioengineering” to exclude from regulation foods with undetectable amounts of modified genetic material. 7 CFR § 66.1. As a safety net, it created a “List of Bioengineered Foods,” including eggplant, papaya, AquAdvantage® salmon, summer squash, soybean, and sugarbeet, presumed to be bioengineered. 7 CFR § 66.6. A highly refined food produced with an ingredient on the list is presumed to be bioengineered and required disclosure, and the regulated entity would have to retain documentation that the product is not bioengineered to avoid regulation. 7 CFR §§ 66.5, 66.6, 66.9. Thus, AMS determined that highly refined foods would not be subject to the disclosure requirements unless: (1) they had detectable amounts of modified genetic material; or (2) they included ingredients from the presumed bioengineered list and the regulated entity did not prove that the food was not bioengineered.

Plaintiffs — who are retail stores and consumer advocacy organizations — sued the agency for violating the Administrative Procedure Act (APA), 5 USC § 706, challenging the bioengineered food disclosure regulations as arbitrary, capricious, and contrary to Congress’s directives. In addition to claims brought under the APA, the plaintiffs also asserted that the regulations requiring disclosures to use the word “bioengineered,” unlawfully restricted their speech in violation of the First and Fifth Amendments to the US Constitution, and that the disclosure statute’s preemption provision preempting state labeling laws for genetically engineered (GE) seeds violated the Tenth Amendment.


The court first addressed whether the plaintiffs had standing to pursue their APA and constitutional challenges. The court held that they had standing because the retail stores “filed multiple declarations attesting to their stake in disclosing information about bioengineered foods to interested consumers, and how the regulations are said to adversely affect the stores.” The advocacy groups also filed declarations attesting to their “organizational interests in transparent labeling of bioengineered foods, their individual interests in obtaining information about bioengineered foods, and how the regulations are said to impede those interests by restricting the scope of disclosures,” which is sufficient to confer constitutional standing. 

However, the court held that the plaintiffs lacked standing to bring the First and Fifth Amendment challenges regarding the word-use requirement because “[n]othing in either text forbids the plaintiffs from using GE, GMO, or any other words they want in their communications with consumers. The only requirement is that all disclosures must use the word ‘bioengineered.’” As a result, “the record does not establish that plaintiffs face a well-founded fear of enforcement for using GE, GMO, or any other words above and beyond the mandatory disclosure terminology.” Summary judgment was therefore denied on those claims.

Text Message Disclosure Option Was Insufficient

On the merits, the court granted summary judgment in the plaintiffs’ favor on their claim that USDA’s regulation providing for the text message disclosure option was arbitrary and capricious. The court found that the Deloitte study’s conclusion that consumers would have difficulty accessing information electronically via the QR code, imposed an obligation on USDA to provide an “additional and comparable option” to the QR code. The court concluded that the separate text message option USDA provided to satisfy that requirement was insufficient because “[i]t merely provided a fourth disclosure option that regulated entities can select instead of the electronic disclosure method.” Op. at 17. 

In other words, “the standalone electronic disclosure suffices under the regulations, even though USDA determined that consumers would not have sufficient access to the bioengineering disclosure through electronic or digital means under ordinary shopping conditions at this time.” Id. The court also rejected the agency’s argument that it was entitled to deference in its interpretation of the “additional and comparable options” language to permit the agency to “provide ‘similar’ disclosure options rather than improvements on the electronic disclosure.” Id. at 19. The court reasoned that deference is only accorded when the statutory language is ambiguous, which the court found was not the case here. Id. 

As a result, the court remanded both the text message and the QR code provisions to the agency to improve the requirements for the QR code disclosure itself (even though the law mandates that the QR code also include a telephone number that provides 24-hour access to the disclosure). Id. at 19-20. The court noted that the Deloitte study had suggested that the text message option be added to the QR code itself, rather than as a separate option, as a potential solution. Id. at 18.

As to remedy, the court agreed with the government that remand without vacatur was appropriate “so that the status quo is maintained while AMS revisits the issue.” Id. at 20. The government emphasized that “vacatur would disrupt consumer access to bioengineering disclosures and exacerbate the very concerns implicated by the agency’s error,” and “vacatur would disrupt the food industry, which was required to comply with the regulations as of January 1, 2022.” Id. The court found these concerns to be persuasive and uncontroverted by the plaintiffs. Id. As a result, both the text message and QR code options will remain in place while the agency takes the matter under advisement. Id.

Mandatory Disclosure Terminology Satisfied the APA

The court denied summary judgment on the plaintiffs’ claim that requiring the use of “bioengineered” (but not GE, GMO, etc.) in disclosures was arbitrary and capricious and “contrary to the statutory directive to define ‘any similar term.’” The court explained that the disclosure statute “authorized the USDA to supplement the definition of bioengineering with ‘any similar term, as determined by the [USDA],’” but nowhere indicated that “any similar term” would need to be part of the mandatory disclosure language. Id. Further, using the term “bioengineered” was not arbitrary and capricious “as a change in practice or policy because the disclosure statute and regulations are the first federal actions implementing standards for bioengineered food disclosures.” Id. The court concluded that it was not arbitrary and capricious to use that term over other terms like GE and GMO, which the record confirms the agency considered but concluded “could blur the scope of the regulations, and lead to inconsistent disclosures.” Id. at 21. 

Bioengineering and Highly Refined Foods Provisions Satisfied the APA

The court also denied summary judgment on the plaintiffs’ APA challenge to USDA’s definition of “bioengineering” to exclude highly refined foods without “detectable” modified genetic material as an overbroad exemption that fails to regulate “any food that may be bioengineered,” as required by the statute. Id. at 21. The plaintiffs also claimed that “the agency’s decision to adopt an exclusion based on whether modified genetic material is ‘detectable’ was arbitrary and capricious because some studies have identified previously ‘undetectable’ modified genetic material in highly refined foods.” Id. 

The court rejected that argument because the plaintiffs failed to consider USDA’s published list of foods presumed to be bioengineered that are only excluded from disclosure if the regulated entity can prove that the food is not bioengineered, which the agency committed to updating regularly. Id. The court reasoned that the NBFDL requires the agency to “promulgate regulations that ‘determine the amounts of a bioengineered substance that may be present in a food, as appropriate, for the food to be a bioengineered food,’” and “AMS did just that.” Id. at 22. 

BE Disclosure Preemption Provision Does Not Violate the Tenth Amendment

Finally, the court held that the plaintiffs’ argument that the statute’s preemption of state labeling requirements for GE seeds violated the Tenth Amendment lacked merit. Plaintiffs’ claim was based on the “anticommandeering doctrine,” which states that “Congress cannot order a state to require or prohibit certain acts, or enact laws to those ends.” Id. at 23. The court held that the plain language of the preemption statute was “not an attempt by Congress to order the states to do something” and was simply “a typical federal preemption provision no different from similar provisions in many other federal statutes.” Id. The court held that there could be no violation of the Tenth Amendment because the disclosure statute was “a valid exercise of Congress’s power under the Commerce Clause,” and it reflected “Congress’s intent to set national standards and practices for disclosures about bioengineered foods.” Id. at 24-25.


There are a few key takeaways from this decision. First, in upholding the NBFDL’s preemption provision, the court reaffirmed Congress’s intent to set a national standard for bioengineered food disclosures. Preserving the preemptive effect of the federal disclosure requirements could benefit regulated entities by fostering predictability and consistency, and protecting them from being subject to potentially conflicting mandates. Second, the court rejected the plaintiffs’ request to vacate AMS’s regulations on remand and instead allowed the rules to remain in effect while the agency conducts further rulemaking. Maintaining the status quo under these circumstances reinforces that economic harm and other disruptions to industry are important factors for a court to consider in fashioning an appropriate remedy. Third, because the court held that the electronic and text message disclosure regulations were arbitrary and capricious and would need to be reworked, the court, in essence, required that the agency reinitiate a fulsome rulemaking process. While this will present opportunities for further stakeholder engagement on what the new rules should look like, the rulemaking process can be lengthy, so regulated entities should expect that they will not have finality on what their disclosure obligations will be moving forward for some time. 

ArentFox Schiff’s AgTech group is closely monitoring this issue and other issues of importance to the AgTech industry. If you have further questions, please contact Karen Carr, Rebecca Foreman, or the ArentFox Schiff attorney who handles your matters. 


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