In re Kind LLC "Healthy & All Natural" Litig.
287 F. Supp. 3d 457
S.D. Ill.2018Background
- Plaintiffs allege KIND labeled snacks "non-GMO" and "natural" though products contain ingredients derived from genetically modified or synthetic sources; FDA/USDA rulemaking on these terms is pending.
- The court previously stayed the "natural" claim under primary jurisdiction and dismissed the original "non-GMO" claim without prejudice for insufficient pleading; Plaintiffs filed an amended complaint curing some defects.
- The USDA is statutorily required to issue a national bioengineered (GMO) disclosure standard by July 29, 2018; the FDA opened and closed a notice-and-comment period on "natural" in 2015 but has not issued a final definition.
- KIND moved to dismiss or stay the amended "non-GMO" claims (preemption, primary jurisdiction, failure to state a claim); Plaintiffs moved to lift the existing stay of the "natural" claim arguing agency inaction prejudices them.
- The court found Plaintiffs sufficiently pleaded reliance and plausible presence of GMO-derived ingredients based on testing and industry statistics, but it balanced agency timelines and primary-jurisdiction concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preemption of state-law "non-GMO" claims by National Bioengineered Food Disclosure Standard | State-law consumer-protection claims seek to remedy misleading labels, not impose labeling standards; not preempted | Federal statute preempts state requirements "relating to" GMO labeling | Not preempted — plaintiffs' claims challenge truthfulness, do not impose new labeling standards |
| Primary jurisdiction stay of "non-GMO" claims pending USDA rulemaking | Plaintiffs: courts can adjudicate consumer-deception issues now; USDA standard will not be dispositive | KIND: USDA expertise and statutory deadline counsel staying litigation to avoid inconsistent outcomes | Stayed until August 15, 2018 (to allow USDA action by July 29, 2018); otherwise plaintiffs may move to lift stay |
| Sufficiency of amended pleading on "non-GMO" claims | Plaintiffs: amended complaint alleges specific plaintiffs read labels, identifies affected products, cites independent testing and plausible links to GMO crops | KIND: allegations are speculative, rely on industry percentages, fail to specify GMO levels/types making label misleading | Complaint adequate at pleading stage; motion to dismiss on merits denied (but claim stayed per primary jurisdiction) |
| Motion to lift stay on "natural" claim (FDA rulemaking stalled) | Plaintiffs: FDA inaction since 2016 prejudices their case; stay should be lifted to avoid undue delay | KIND: FDA may still act; judicial economy and relatedness to "non-GMO" claim justify continuing the stay | Motion to lift denied without prejudice; "natural" claim stayed until August 15, 2018 (plaintiffs may renew if FDA has not acted) |
Key Cases Cited
- Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir.) (standards for considering allegations as true on motion to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard requiring factual plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim for relief)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (presumption against preemption of state police powers absent clear congressional intent)
- Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707 (Supremacy Clause preempts conflicting state laws)
- Ellis v. Tribune Television Co., 443 F.3d 71 (2d Cir.) (four-factor primary jurisdiction framework)