KIND Snack Bar Class Action on Hold, Pending Guidance from USDA

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The makers of KIND snack bars will continue to face claims challenging their “non-GMO” and “natural” labeling, but the litigation is paused while federal agencies get a chance to issue relevant guidance.

U.S. District Judge William H. Pauley III granted defendants KIND LLC and KIND Management Inc.’s motion to stay claims over non-GMO labeling while the U.S. Department of Agriculture generates new guidance on the matter.

At the same time, the judge denied the defendants’ motion for dismissal, finding that the claims are not preempted by federal law.

Plaintiffs in the consolidated KIND class action lawsuit say KIND products contain genetically-modified organisms, contrary to their labeling that says their ingredients are “non-GMO.” According to the plaintiffs, testing conducted in June 2016 revealed KIND products contain processed ingredients derived from genetically-modified canola, corn and soy.

KIND argued that the “non-GMO” claims should be stayed under the doctrine of primary jurisdiction. This doctrine allows courts to stay a pending action while a federal agency develops and promulgates relevant regulations.

KIND points out that the U.S. Department of Agriculture is currently working on a new standard for food labeling that addresses GMO content. This standard was mandated in the National Bioengineered Food Disclosure Standard, a 2016 federal law that directs the USDA to establish standards governing disclosures about bioengineered foods. The law requires the standard to be promulgated by July 2018.

Judge Pauley agreed with Kind, noting that issues of GMO food labeling are within the USDA’s discretion to determine and that USDA guidance would help prevent inconsistent court rulings. The judge stayed the “non-GMO” claims until August 2018, by which time the USDA’s standard should be published.

Also on hold is the plaintiffs’ claim that KIND’s representations of its products as “all natural” are misleading. That claim has been stayed since September 2016 to give the U.S. Food and Drug Administration an opportunity to promulgate new regulations that govern the use of the term “natural” in food labeling.

In the most recent round of motions, the plaintiffs asked Judge Pauley to lift the stay on the “all natural” claims. They say the FDA has apparently taken no action on the proposed rules since the public notice and comment period closed in May 2016, and that leaving the stay in place while the FDA process appears indefinitely stalled would result in undue delay and prejudice.

Judge Pauley declined to lift the stay immediately but instead set it to expire at the same time as the stay on the “non-GMO” claims.

“There is no telling when the FDA will complete its work on the term ‘natural,’ much less provide any public guidance on its progress,” the judge said. “However, in the interest of litigating the ‘natural’ and ‘non-GMO’ claims concurrently, this Court believes the August 15, 2018 deadline is a sensible benchmark from which it can re-assess whether a stay over both claims is proper.”

Judge Pauley rejected KIND’s argument that the “non-GMO” claim is preempted by the National Bioengineered Food Disclosure Standard. The statute expressly preempts any state law that attempts to regulate food labeling that addresses genetically-engineered ingredients.

The judge noted that the plaintiffs’ claims do not rely on any such state requirement. The state statutes behind the plaintiffs’ claims are general consumer protection laws that provide remedies for labeling that is untrue and misleading. The statutes do not specifically address GMO foods, and therefore those claims are not preempted, the judge concluded.

The plaintiffs are represented by attorney Todd S. Garber of Finkelstein Blankinship Frei-Pearson & Garber LLP.

The “Natural” KIND Snack Bar Class Action Lawsuit is In re: KIND LLC “Healthy and All Natural” Litigation, Case No. 1:15-md-02645, in the U.S. District Court for the Southern District of New York.

UPDATE: On Aug. 15, 2018, plaintiffs urged a New York federal judge to unfreeze a class action lawsuit involving allegations Kind LLC falsely advertises its products as not containing genetically modified organisms, claiming that the U.S. Department of Agriculture has not indicated when it will issue a new GMO disclosure standard for products.

UPDATE 2: On Feb. 11, 2019, a New York judge determined that a Kind snack bar class action lawsuit can proceed in light of the U.S. Food and Drug Administration’s inaction regarding “natural” guidelines.