Proposition 37: A ‘Modest Proposal’

by | Dec 3, 2012

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Proposition 37, a ballot initiative that California voters rejected on November 6, 2012, would have made Jonathan Swift blush. Prop. 37 would have required warning labels on foods offered for sale to consumers in California that are made from “genetically engineered” plants or animals, and would render such foods “misbranded” if they were labeled or advertised as “natural.”

Prop. 37 included an enforcement provision that would have allowed “any person” to sue in Superior Court to enjoin violations of the law, notably without proof of damages or loss. Instead, economic damages would have been presumed to be “at least the amount of the actual or offered retail price of each package or product alleged to be in violation.” It also contained a “bounty hunter” provision, authorizing the Superior Court to award any person attorneys fees and costs for filing such a suit. This bounty hunter provision was modeled on Prop. 65 ?? the 1986 initiative that established California’s Safe Drinking Water & Toxic Enforcement Act, under which hundreds of plaintiffs’ attorneys have filed thousands of lawsuits.  These are known in the trade as Lawyers’ Full Employment Acts.  But Prop. 37 would have been worse than Prop.65.

Prop. 37 did not expressly identify who may be held liable. Rather, it appeared to place a duty (as well as the risk of private enforcement) on all parties in the food-supply chain. It states that it would be unlawful for “any person to manufacture, sell, deliver, hold or offer for sale” any food that is misbranded.  Thus, the following could all be held liable under that provision:

  • Manufacturers (“manufacture”)
  • Distributors (“sell,” “deliver”)
  • Storage Facilities (“hold”)
  • Retailers (“sell”)
  • Shippers/Transporters (“deliver”)
  • Marketers (“offer for sale”)

Many entities in the food-supply chain are not equipped to determine whether a food is the product of “genetic engineering.” Nonetheless, they could have been legally responsible under Prop. 37 and potentially subject to liability, even without the knowledge or intent that the food products they distribute or sell contain genetically engineered ingredients. How in the world is Piggly Wiggly supposed to know if a product contains genetically modified material? Facing the prospect of ruinous liability for sales of non-labeled GMOs, grocers likely would have required distributors to indemnify them against such liability, which would have the effect of banning GMO foods. Advocates may think it is a result they like – but according to the California Office of the Attorney General, 70 percent of foods sold in California contain genetically modified material (including 88 percent of the corn and 94 percent of the soybeans produced). Thus, all that would be accomplished is that most foods would be labeled protectively, if not meaninglessly, with the words “May contain genetically modified materials.”

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