Washington Insider-- Monday

Chipotle and Non-GMOs

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Rep. McCarthy: House Spending Bill Action Now into May

Appropriations bills will not be brought to the House floor for a vote before members leave for a recess that starts April 29, according to House Majority Leader Kevin McCarthy, R-Calif.

The development is raising doubts the appropriations process will meet a Sept. deadline, necessitating a continuing resolution (CR) to keep the government funded. “It's doubtful that appropriations bills are going to get done in time,” House Minority Whip Steny Hoyer, D-Md., said, noting that likelihood is building given the seven-week break the chamber will be on starting July 15.

"My own supposition is we'll have a CR in September," Hoyer noted, adding, "it's going to be problematic at best to get appropriations bills done by Oct. 1."

McCarthy says he hasn’t "given up on the approps process," and voiced a view appropriations bills present the “perfect opportunity” to deal with issues including the Zika virus and the Flint, Mich. water crisis. Democrats, whose support would likely we vital to passing appropriations bills, are non-committal about their support for the bills given the lack of specific subcommittee allocations.

Four appropriations bills will be completed and ready to head to the House floor for action by the time lawmakers leave for the Apr. 29 recess, according to House Appropriations Committee Chairman Harold Rogers, R-Ky. The four are spending plans for Agriculture, Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs.


USDA to Continue Approving ‘Pork, the Other White Meat’ Payments

USDA’s Agriculture’s Agricultural Marketing Service (AMS) Wednesday decided that, based on its review of the value of four “Pork. The Other White Meat” trademarks the National Pork Board (NPB) purchased from the National Pork Producers Council (NPPC), it would continue to approve the Pork Board’s annual payments for the trademarks. NPPC sold the trademarks to the Pork Board in 2006 for about $35 million. NPPC financed the purchase over 20 years, making the Pork Board’s annual payment $3 million.

The sale was an arms-length transaction with a lengthy negotiation in which both parties were represented by legal counsel, and USDA, which oversees the federal Pork Checkoff program administered by the Pork Board, approved the purchase, NPPC noted.

In 2012, the Humane Society of the United States (HSUS), a lone Iowa farmer and the Iowa Citizens for Community Improvement filed a lawsuit against USDA, seeking to have the sale rescinded. A U.S. District Court dismissed the suit for lack of standing, but a federal appeals court in August 2015 reinstated it. Subsequently, USDA agreed to review the purchase, including conducting a valuation of the trademarks.

In a frequently-asked-questions document on its website, AMS set the value of the four trademarks at between $113 million and $132 million. It is unclear whether HSUS will continue to press its lawsuit.


Washington Insider: Chipotle and Non-GMOs

While Chipotle seems to have survived, with difficulty, its recent problems with food-borne illnesses, it now is facing litigation about a different problem. It seems the restaurant chain has been advertising that its product contain no genetically modified organisms (GMOs) and its definition of those products is being contested.

Bloomberg reported recently that Chipotle may face a class suit challenging its representations that its food contains no GMOs. A lawsuit against the firm over its use of genetically modified ingredients recently survived a motion to dismiss in Miami federal court. US District Judge Marcia Cooke allowed two of three claims in the case to go forward.

The litigation addresses a question not yet settled by legislators or the courts, Bloomberg notes, and that is whether meat or dairy products can be labeled non-GMO if the animals they came from were raised on genetically modified feed.

The Court ruled that more evidence is needed to establish a definition of non-GMO products and whether a reasonable consumer would share plaintiff Leslie Reilly's interpretation that animals raised on GMO-containing feed can't produce non-GMO meat.

Reilly's complaint is that Chipotle's ads say all of its food is “non-GMO,” the court said. By contrast, Reilly argues that meat and dairy products sourced from animals raised on GMO-containing feed are actually GMO products. Based on this understanding, Reilly interpreted Chipotle's ads to mean its animals did not eat feed made with genetically modified ingredients. She alleges she was duped into paying a premium price for non-premium food and she seeks to represent a class of Florida customers.

Chipotle, meanwhile, does not regard the meat from these animals as GMO products, the court said. The company did not deny Reilly's allegations that she bought food products made from animals raised on GMO feed, but contended her interpretation of its “non-GMO” representation was “nonsensical” and not plausible. The court apparently disagreed and in refusing to dismiss the case said this divergence emphasizes the need for more information.

Chipotle will contest the Reilly claims, spokesman Chris Arnold said.

Judge Cooke dismissed without prejudice a claim for injunctive relief, finding the plaintiff did not have standing to claim future harm from eating at Chipotle. But the judge also ruled it was too early to decide whether Reilly's interpretation of "non-GMO" was plausible. She also allowed an unjust enrichment claim to go forward.

Cooke's decision differed sharply from that of a Northern District of California judge who dismissed a similar case against Chipotle.

So, it will be interesting to see what develops in the Florida case and how any findings there might impact the organic foods industry generally. While the courts may not have defined the term non-GMO, USDA and the organics industry have firm ideas on the matter, as do many participants in the organics industry. Thus, it is likely that there will be additional rounds in this high-stakes fight, which could well have broad implications for producers and watched closely as it proceeds, Washington Insider believes.

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