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VOLUME 17, NUMBER 6, WHOLE NUMBER 199 MAY 2000

Supreme
Supr Court
eme Cour t denies Chevron def
defer
erence
erence
statutory
to statutor interpr
y interpretations
pr agency
etations in agency
letters
opinion letters and similar fformats
ormats
In its May 1, 2000, decision in Christensen v. Harris County, 120 S. Ct. 1655 (2000),
the United States Supreme Court ruled that statutory interpretations made by
agencies in pronouncements that do not have the force of law, such as opinion letters,
policy statements, agency manuals, and enforcement guidelines, are not entitled to

INSIDE “Chevron deference.” Instead, “Skidmore deference” applies. Skidmore deference,
whose namesake is the Court’s decision in Skidmore v. Swift & Co., 323 U.S. 134
(1944), is less forceful than Chevron deference for it compels the federal courts to
defer to agency interpretations of statutes only to the extent that the interpretations
• Regulating foods have the “power to persuade.” See 1 Kenneth Culp Davis & Richard J. Pierce, Jr.,
derived from Administrative Law § 6.3 (3rd ed. 1994) [hereinafter Davis & Pierce]. The decision
is significant for agricultural lawyers because many federal agencies, including the
genetically engineered USDA, render interpretations of the statutes they administer in formats that do not
crops have the force of law.
“Chevron deference” takes its name from the Court’s decision sixteen years ago in
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
In that decision the Court held that when the federal courts are faced with an
ambiguous statute, the courts must defer to an agency’s regulation containing a
reasonable interpretation of the statute. In essence, Chevron deference analysis
potentially presents two questions. The first question is whether the statute at issue
is ambiguous. If the statute is not ambiguous in that it speaks directly to the
question at issue, then the statute must be applied. If, on the other hand, the statute
is ambiguous, the court must defer to the agency’s regulatory interpretation of the
statute if the interpretation is reasonable. The second question, therefore, is
whether the agency’s interpretation is reasonable. See id. at 842-43.
If a court reaches the second question, the odds favor the agency. A recent study
Solicitation of articles: All AALA found that courts of appeals’ decisions citing Chevron upheld the agency interpre-
members are invited to submit tation seventy-three percent of the time. Michael Herz, Judicial Review in Develop-
articles to the Update. Please in- ments in Administrative Law and Regulatory Practice 1998-1999, 52 n.26 (Jeffrey
clude copies of decisions and leg-
C ontinued on page 2
islation with the article. To avoid
duplication of effort, please no-
tify the Editor of your proposed
article. for
Risks in asking f assurance
or adequate assurance
performance
of perf ormance
IN FUTURE The U.S. Court of Appeals for the Eighth Circuit on May 11, 2000 issued a decision
denying the appeal of several Iowa cooperatives that challenged jury instructions
related to the question of adequate assurance on hedge-to-arrive (HTA) contracts.

I SSUES While an Iowa federal district court found that the HTA contracts were cash
forward contracts not subject to the federal Commodity Exchange Act, a jury granted
nominal damages to a producer on a remaining claim for breach of contract and
denied the cooperatives’ claims for damages against the producer.
• New generation The appellate court outlined the letter sent by the Farmers Cooperative of Ledyard
farmer cooperatives to the producer, which was entitled “Demand for Adequate Assurance of Perfor-
mance.” The letter, among other things, “stated its concern surrounding the
substantial sums the Elevator had committed to covering margins under the Flex
• Crop share rental Hedge Contracts….[The Elevator] stated that various market and non-market
arrangements and conditions and developments created reasonable grounds for insecurity with respect
sample lease to [the producer] and others who held Flex Hedge Contracts with the Elevator.
Because of such insecurity, [the Elevator] demanded that [the producer] provide the
Elevator with adequate written assurances of his intent to perform under the Flex
Continued on page 2
CHEVRON DEFERENCE/CONTINUED FROM PAGE 1

S. Lubbers, ed. 2000) (citing Orin S. “[s]ome might argue that the uncertainty but only to the extent that those inter-
Kerr, Shedding Light on Chevron: An and conflicting authority [in the lower pretations have the “power to per-
Empirical Study of the Chevron Doctrine courts] on this issue are not particularly suade....”
in the U.S. Courts of Appeals, 15 Yale J. important because agency interpretive Id. (citations omitted).
Reg. 1 (1998)). Thus, “[i]n general, one of rules are at least entitled to Skidmore
two things happen in a Chevron case: deference.” Id. They further noted, how- Though the question may now have an
either the court concludes that the stat- ever, that “[i]n many cases ... the differ- answer, the Court did not speak in uni-
ute contains the answer, in which case ence between Chevron deference and son. The Court’s opinion was written by
the agency’s interpretation becomes ir- Skidmore deference is outcome determi- Justice Thomas, who was joined by Chief
relevant, or it determines that the stat- native.” Id. Justice Rehnquist and Justices O’Conner,
ute does not, in which case the agency’s In Christensen v. Harris County, the Kennedy, and Souter. Justice Scalia dis-
interpretation becomes, for all intents Court became either able or willing to sented as to the holding that the opinion
and purposes, dispositive.” Id. at 52. answer the question that Professors Davis letter was entitled only to Skidmore def-
In Chevron, the agency’s interpreta- and Pierce had noted as remaining unan- erence. Characterizing Skidmore defer-
tion of the statute was contained in a swered: whether agency pronouncements ence as an “anachronism,” Justice Scalia
legislative rule; that is, it was found in a contained in formats other than a legisla- opined that, “[w]hile Chevron in fact in-
rule that had been duly promulgated tive rule are subject to Chevron defer- volved an interpretive regulation, the
under the rulemaking procedures pre- ence. In response to a claim that a De- rationale of that case was not limited to
scribed in the Administrative Procedure partment of Labor opinion letter that that context....” Id. at 1664 (Scalia, J.,
Act. As recently as in the 1999 Supple- expressed the agency’s interpretation of dissenting). Justice Breyer, in a separate
ment to their treatise, Professors Davis a provision of the Fair Labor Standards dissent joined by Justice Ginsberg, took
and Pierce noted that the Court had been Act was entitled to Chevron deference, issue with Justice Scalia’s characteriza-
“unable or unwilling” to say whether the Court in Christensen held that Chev- tion of Skidmore as an “anachronism,”
Chevron deference should be accorded to ron deference did not apply. Christensen, but he expressed the view that Justice
nonlegislative rules such as interpretive 120 S. Ct. at 1662-63. Specifically, the Scalia may have been right in according
rules. Davis & Pierce, supra, at § 3.5 Court ruled: the opinion letter Chevron deference.
(Supp. 1999). They also observed that Here...we confront an interpretation Justice Breyer maintained that “to the
contained in an opinion letter, not one extent there may be circumstances in
arrived at after, for example, a formal which Chevron-type deference is inappli-
adjudication or notice-and-comment cable–e.g., where one has doubt that
rulemaking. Interpretations such as Congress actually intended to delegate
those in opinion letters–like interpre- interpretive authority to the agency (an
tations contained in policy statements, “ambiguity” that Chevron does not pre-
agency manuals, and enforcement sumptively leave to agency resolution)–I
VOL. 16, NO. 6, WHOLE NO. 187 May 1999 guidelines, all of which lack the force of believe that Skidmore nonetheless re-
AALA Editor..........................Linda Grim McCormick
law–do not warrant Chevron-style def- tains legal vitality.” Id. at 1668 (Breyer,
Rt. 2, Box 292A, 2816 C.R. 163 erence. Instead, interpretations con- J., dissenting).
Alvin, TX 77511 tained in formats such as opinion let- —Christopher R. Kelley, Assistant
Phone: (281) 388-0155
FAX: (281) 388-0155 ters are “entitled to respect” under our Professor, University of Arkansas
E-mail: lgmccormick@teacher.esc4.com decision in Skidmore v. Swift & Co...., School of Law, Of Counsel, Vann Law
Contributing Editors: Christopher R. Kelley, University Firm, Camilla, GA
of Arkansas, Fayetteville, AR; David C. Barrett, Jr.,
Washington, D.C.; Donald L. Uchtmann, University of
Illinois.
For AALA membership information, contact RISKS/Continued from page 1
William P. Babione, Office of the Executive Director, Hedge Contracts.” stituted a demand for an ‘off-exchange
Robert A. Leflar Law Center, University of Arkansas,
Fayetteville, AR 72701. The letter from the Farmers Coopera- transaction’), you may find that such a
tive of Ledyard included a detailed list of demand was unlawful and unreason-
Agricultural Law Update is published by the
American Agricultural Law Association, Publication items it would consider as adequate. In- able….
office: Maynard Printing, Inc., 219 New York Ave., Des cluded in the list was a demand for “pay- The three-judge appellate panel re-
Moines, IA 50313. All rights reserved. First class
postage paid at Des Moines, IA 50313.
ment in full of all commissions and mar- jected the cooperatives’ claims that they
gins previously paid by the Coop on your were prejudiced by the jury instructions
This publication is designed to provide accurate and behalf and all other costs incurred by the and found that “as a whole, they fairly
authoritative information in regard to the subject
matter covered. It is sold with the understanding that Coop pursuant to the Contracts.” Farm- and adequately stated the law applicable
the publisher is not engaged in rendering legal, ers Cooperative of Buffalo Center sent a to the dispute.” Finally, the appellate
accounting, or other professional service. If legal advice
or other expert assistance is required, the services of similar letter to the same producer. court said “a miscarriage of justice did
a competent professional should be sought. The jury instructions given by the dis- not occur.”
Views expressed herein are those of the individual
authors and should not be interpreted as statements of
trict judge on the issue of adequate as- Parties to contracts certainly can be
policy by the American Agricultural Law Association. surance provided that: justified in asking for “adequate assur-
You are instructed that it is unlawful ances of performance” under a variety of
Letters and editorial contributions are welcome and
should be directed to Linda Grim McCormick, Editor, to enter into a contract for the pur- circumstances. The facts of this case,
Rt. 2, Box 292A, 2816 C.R. 163, Alvin, TX 77511. chase or sale of commodity futures however, offer a vivid example of the
Copyright 2000 by American Agricultural Law unless the transaction is conducted on dangers of doing it incorrectly. The deci-
Association. No part of this newsletter may be or is subject to the rules of the Chicago sion [James Larson v. Farmers Coopera-
reproduced or transmitted in any form or by any means,
electronic or mechanical, including photocopying,
Board of Trade or other designated tive Elevator of Buffalo Center, Iowa, et
recording, or by any information storage or retrieval contract market. Therefore, if you find al.] can be found on the internet at http:/
system, without permission in writing from the that a demand for assurances consti- /www.ca8/uscourts.gov/opndir/00/05/
publisher.
tuted a demand to enter into a pur- 992954P.pdf.
chase or sale of commodity futures that —David C. Barrett, Jr., National
was not on or subject to the rules of a Grain and Feed Association,
designated contract market (i.e., it con- Washington, D.C.

2 AGRICULTURAL LAW UPDATE MAY 2000
GM FOODS/Continued from page 7
www.fda.gov/fdac/features/2000/ docs/fedrgstr/EPA-PEST/1997/Septem- Derived through Recombinant DNA Tech-
100_bio.html>. ber/Day-10/cry.htm>. nology-Final Consultations under FDA’s
5 20
In addition to federal regulation, agen- To reduce regulatory burden, FDA 1992 Policy (visited January 31, 2000)
cies of each of the fifty states may regu- exercises minimal oversight of products <http://vm.cfsan.fda.gov/~lrd/
late the use of biotechnology products that are Generally Recognized as Safe biocon.html>.
28
within the particular state, under either (GRAS). Such foods are subject to FDA's David A. Kessler, Michael R. Taylor,
independent state laws (for example, a section 402 broad post-market authority James H. Maryanski, Eric L. Flamm,
state seed certification law) or authority to remove unsafe foods from the market- Linda S. Kahl, The Safety of Foods Devel-
delegated by a federal agency. Michael J. place, but exempt from the far more oped by Biotechnology, 256 Science 1747,
Malinowski, B I O T E C H N O L O G Y, LA W, BUSI- rigorous and resource demanding pre- 1749 (1992).
29
N E S S,A N D RE G U L A T I O N § 11.06[A] (1999). market review of section 409 (unsafe food FDA did not require special labeling
6
See Coordinated Framework for Regu- additives. for the Flavr Savr tomoto because the
21
lation of Biotechnology, 51 Fed. Reg. 23302 FDA looked explicitly at both food new tomato was not significantly differ-
(June 26, 1986). and feed use of products containing the ent from the range of commercial variet-
7
Coordinated Framework for Regula- “antibiotic marker gene” introduced into ies referred to by that name. However,
tion of Biotechnology, 51 Fed. Reg. 23302, the Flvr Savr tomoto by genetic engineer- Calgene (the developer of the Flavr Savr
23303 (June 26, 1986). The dual goals of ing, both for the likelihood of inactivation tomoato) decided to provide special label-
promoting health and safety and promot- of therapeutic antibiotics (the gene did ing, including point-of-sale information,
ing the U.S. biotech industry are readily not inhibit the use of existing antibiotics to inform consumers that the new tomato
apparent when one reads the Proposed in people) and for the potential of genetic has been developed through genetic engi-
Coordinated Framework. Proposal for a flow to microorganisms (nor did it con- neering.
30
Coordinated Framework for Regulation tribute substantially to bacteria develop- The agency has not required labeling
of Biotechnology; Notice, 49 Fed. Reg. ing resistence). FDA concluded that the for other methods of plant breeding such
50856 (December 31, 1984). Also, see gene was safe. See FDA's review docu- as chemical- or radiation-induced mu-
United States Regulatory Oversight in ment at <http://vm.cfsan.fda.gov/~dms/ tagenesis, somaclonal variation, or cell
Biotechnology (visited October 26, 1999) OPA-ARMG.HTML#1> (Visited Septem- culture. For example, there is no require-
<http://www.aphis.usda.gov/biotech/ ber 23, 1999.) ment to label hybrid sweet corn because
22
OECD/usregs.htm>. Because the objective of most modi- it was developed through cross-hybrid-
8
Michael J. Malinowski, Biotechnol- fications is to effect some kind of change ization.
31
ogy, Law, Business, and Regulation § in composition no matter how small, one See, e.g., Greenpeace, The Sound of
11.06[A], at p. 11-87 (1999). Also see could argue that a genetically engineer- Unsound Science: EPA and EU Regula-
Chart I in the Coordinated Framework, ing food cannot be exactly equivalent. tion of Bt Crops and Effects on Non-
51 Fed. Reg. 23302, 23304 (June 26, This is largly the argument of those who Target Insects (visited May 16, 2000).
1986) and U.S. Regulatory Oversight of question the safety of any GM food. In <http://www.greenpeace.org/~geneng/>.
32
Biotechnology (visited Feb. 15, 2000) practice, there is an iterative consulta- See Food and Drug Administration,
<http://www.aphis.usda.gov/biotech/ tion process between developers and FDA Bioengineered Foods (visited May 16,
OECD/usregs.htm>. through which it is decided by mutual 2000). <http://www.fda.gov/oc/biotech/
9
21 U.S.C.A. § 303 (West 1999). consensus whether pre-market approval default.htm>.
10 33
21 U.S.C.A. § 331 (West 1999). should or should not be required. FDA See, e.g., National Research Council,
11
21 U.S.C.A. § 342(a) (West 1999). provides guidance to the developer on a Genetically Modified Pest-Protected
Food is also adulterated if it contains an case-by-case basis. Personal communi- Plants: Science and Regulation, at Chap-
unsafe pesticide chemical residue, i.e., a cations from Dr. Bruce Chassy, Professor ter 4: Strengths and Weaknesses of the
residue exceeding a tolerance or exemp- and Head, Department of Food Science Current Regulatory Framework, p. 143-
tion established by the Administator of and Human Nutrition, UIUC. 180 (2000). This publication is available
23
the Environmental Protection Agency. Statement of Policy, Foods Derived from National Academy Press and is on
21 U.S.C.A. § 346a (West 1999). From New Plant Varieties, 57 Fed. Reg. the Internet (visited May 16, 2000) at
12
21 U.S.C.A. § 333 (West 1999). The 22983 (1992). <http://books.nap.edu/catalog/
24
criminal penalties cannot exceed three The concept of substantial equiva- 9795.html>.
34
years in prison and a $10,000 fine. lence as applied to GM foods was first Id.
13 35
21 U.S.C.A. § 342(a) (West 1999). used in an OECD publication, "Safety The White House Office of the Press
14
21 U.S.C.A. § 348(a)(2) (West 1999). Evaluation of Foods Derived by Modern Secretary, Clinton Administration Agen-
15
21 U.S.C.A. § 321(s) (West 1999). Biotechnology: Concepts and Principles," cies Announce Food and Agricultural
Food additives used prior to 1958 can 1993, available at <http://www.oecd.org/ Biotechnology Initiatives: Strengthening
also be "generally recognized as safe" /dsti/sti/s_t/biotech/prod/MODERN.pdf>, Science Based Regulation and Consumer
because of the experience based on their accessed October 10, 1999. It is a report Access to Information (visited May 9,
common use in food. of a group of 60 experts from 19 coun- 2000). <http://www.pub.whitehouse.gov/
16
21 U.S.C.A. § 331(a) and (b) (West tries, nominated by their governments. uri-res/I2R?urn:pdi://oma.eop.gov.us/
1999). An October 7, 1999, article in Nature, 2000/5/4/10.text.1>. This FACT SHEET
17
21 U.S.C.A. § 343(a) (West 1999). challenging the validity of using substan- can be accessed through the web site for
18
21 U.S.C.A. § 371(a) (West 1999). tial equivalence to evaluate the safety of White House Electronic Documents,
19
See 21 U.S.C.A. § 346a. The quoted GM foods has drawn quick rebuttals. See <http://www.pub.whitehouse.gov/WH/
language comes from § 346a(b)(2)(a)(ii). <http://www.biotechknowledge.com/ Publications/html/Publications.html>,
The EPA has addressed the issue of tol- showlib_us.php3?2167>, accessed Octo- and searching for Fact Shhets issued
erances for pesticides produced by Bt ber 10, 1999. May 3, 2000). See also, Food and Drug
25
corn, for example. In the case of MON See Statement of Policy, Foods De- Administration, FDA to Strengthen Pre-
810, the EPA concluded that no tolerance rived From New Plant Varieties, 57 Fed. market Review of Bioengineered Foods
was necessary and exempted the active Reg. 22983 (1992). (visited May 16, 2000) <http://
27
ingredient. See Pesticide Fact Sheet (vis- U.S. Food and Drug Administration, www.fda.gov/bbs/topics/NEWS/
ited Feb. 14, 2000). <http://www.epa.gov/ Foods Derived from New Plant Varieties NEW00726.html>.

MAY 2000 AGRICULTURAL LAW UPDATE 3
egulating
Re foods
gulating f deri
oods der from
ived fr genetically
om geneticall engineered
y engineer crops
ed crops
by Donald L. Uchtmann

Genetic engineering offers much prom- consumed in the United States. 4 The selected categories of products poten-
ise. 1 Perceived benefits arising from its foundation for that regulatory scheme is tially produced by biotechnology processes
application to agriculture and the food found in the Federal Food, Drug, and and the specific agencies given primary
industry include: Cosmetic Act (FDCA) and two significant responsibility for approving their com-
· Cheaper and more abundant food public policy statements, all three of mercial use under existing laws are: 8
· New foods of higher quality and which are described below. ·plants, seeds, plant pests, and certain
greater utility for the consumer genetically engineered organisms contain-
·Reduced food production costs for the Genetic engineering and food- ing genetic material from plant pests:
farmer safety: key federal policies and regulated by the Animal and Plant
· Reduced use of chemical pesticides statutes Health Inspection Service (APHIS)
and the accompanying reduction in envi- The 1986 Coordinated Framework for of the US Department of Agriculture.
ronmental degradation the regulation of biotechnology ·pesticides and other toxic substances:
· Job creation, especially in countries Biotechnology products, including foods regulated by the US Environmental
at the leading edge of biotechnology re- derived from genetically engineered crops, Protection Agency (EPA) (EPA).
search and commercialization are regulated pursuant to a coordinated ·food additives and food: regulated by
·Staving off a world food crisis poten- framework announced in 1986 by the the Food and Drug Administration
tially arising from world population in- White House Office of Science and Tech- (FDA) of the U.S. Department of Health
creases. nology Policy. Relying on existing federal and Human Services (FDA actually regu-
laws, the coordinated framework assigns lates all food other than meat and poultry
Associated with these perceived ben- lead regulatory responsibility to one fed- products, the Food Safety Inspection Ser-
efits is an array of risks 2 and societal eral agency for each category of product vice of USDA has jurisdiction for domes-
concerns including: use. 5 For example, the Food and Drug tic livestock and poultry products, and
· Known food safety, agricultural, or Administration (within the Department EPA sets “tolerances” for pesticide resi-
environmental risks, e.g., allergies, a new of Health and Human Services) is the dues in food; but FDA is the lead agency
bacteria resistant to antibiotics, or a new lead regulatory agency for genetically for all food and food additives).
“super” weed engineered products in the category of Example: New Bt corn varieties (plants
·Unknown food safety, agricultural, or “food and food additives” even though the genetically engineered to produce a pro-
environmental hazards Food Safety and Inspection Service tein toxic to European Corn Borer) have
· Concerns about biotechnology’s im- (within the Department of Agriculture) fallen under the regulatory jurisdiction
pact on the structure of agriculture and has jurisdiction over meat and poultry of all three agencies–USDA, EPA, and
the number of “family” farms products. Where agency responsibilities FDA. For a particular line of Bt corn to be
· Concerns about biotechnology’s im- or authorities adjoin or overlap under commercially grown in the United States,
pact on corporate mergers and the ac- existing laws, the coordinated framework it needed to be approved by USDA-APHIS
companying concentration of economic sets out principles for coordinated and (e.g., a petition for “nonregulated status”
power cooperative reviews. 6 needed to be approved), which would
·Ethical and religious concerns, about Some background: In the mid-1980’s consider whether the plant would be a
patenting genes and about both using a numerous federal agencies had already “plant pest” and would prepare an envi-
technology to move genes among organ- amassed considerable experience regu- ronmental assessment. The USDA ap-
isms which do not naturally mate and lating agricultural, pharmaceutical, and proval is intended to assure that the crop
repressing a technology that offers the other products developed by traditional would not be harmful to agriculture con-
potential for significant humanitarian genetic manipulation techniques such as sidering both its benefits (effective con-
benefits. selective breeding. In the spring of 1984 trol of European Corn Borer) and its
the Reagan Administration formed an shortcomings (possibly speeding the de-
The opportunity to glean significant interagency working group to consider velopment of Bt-resistant pests). Because
benefits from genetic engineering, coupled the adequacy of the existing regulatory Bt corn plants contain their own toxic
with some risks and societal concerns, framework as the basis for regulating protein, it was also regulated by EPA,
causes genetic engineering and its prod- new products of biotechnology. This work- which has responsibility to assure the
ucts to be both controversial and subject ing group “sought to achieve a balance safety of pesticides. Since the Bt corn is
to governmental regulation. 3 This article between regulation adequate to ensure intended to be fed to livestock, processed
focuses on the federal regulatory scheme health and environmental safety while into corn syrup (a sweetener) for use in
intended to assure that foods derived maintaining sufficient regulatory flex- soft drinks, or made into corn flakes,
from genetically engineered plants are ibility to avoid impeding the growth of an FDA also had regulatory jurisdiction. To
just as safe to consumers as other foods infant industry.” 7 The working group summarize: A company bringing a par-
published Notice of its Proposal for a ticular variety of Bt corn to the market-
Coordinated Framework in December, place needed to approach USDA, EPA,
Don Uchtmann is a Professor of Agricul- 1984, and announced its regulatory policy and FDA and meet all their regulatory
tural Law in the Department of Agricul- in June, 1986. Present in both the 1984 requirements: USDA would determine
tural and Consumer Economics, Univer- and 1986 Notices is the working group’s that it was safe to grow, EPA that it was
sity of Illinois at Urbana-Champaign. conclusion that existing laws as currently safe for the environment, and FDA that it
B.S. 1968, University of Illinois; M.A. administered by existing agencies would was as safe to eat as other foods (al-
The University of Leeds, England, 1972; adequately meet the regulatory needs for though FDA would not automatically
J.D. 1974, Cleveland State University. products of the newer biotechnologies, review and formally approve the product
He is a former President of the American for the most part. before it entered the marketplace). Not
Agricultural Law Association. Under the Coordinated Framework, all genetically engineered crops would

4 AGRICULTURAL LAW UPDATE MAY 2000
fall within the jurisdiction of all three that establish, modify, or revoke toler- food and its intended use, irrespective of
agencies, but Bt corn is one that does. ances for particular pesticide residues. the method by which the plant variety
Such tolerances must be “safe,” meaning was developed. In other words:
The 1938 Federal Food, Drug, and generally that “there is a reasonable cer- ·if a new plant variety (for example, a
Cosmetic Act tainty that no harm will result from new Bt variety of corn) is intended to be
Regarding the safety of all food, includ- aggregate exposure ....”19 used as a food, the safety of that new
ing food developed from biotechnology, variety is generally determined by exam-
the key legislation is the 1938 Federal Whole foods, such as fruits, vegetables, ining the likely presence of toxicants or
Food, Drug, and Cosmetic Act. 9 The fol- and grains, generally are not subject to allergens in the food and any changes in
lowing provisions of the Act, as amended, pre-market approval under Act § 409 nutritional value;
are especially significant: (Food Additives) because such foods are · the mere presence of trans-genetic
· Act § 402. Adulterated Foods. Sum- generally recognized as safe (GRAS).20 material (nucleic acids) in the food does
mary: The adulteration of food and the But should a genetically engineered whole not trigger the pre-market FDA review
introduction into interstate commerce of food be subject to strict pre-market re- and approval required by section 409 (the
adulterated food is prohibited by the Act.10 view and approval by FDA? FDA gained genetic material is GRAS);
Foods are deemed adulterated, for ex- insight into this question when it chose to · but if the new genetic material ex-
ample, if they contain any poisonous or conduct a pre-market extensive review of presses itself in the food as a new protein,
deleterious substance in a quantity that the Flavr Savr tomato, utilizing an evalu- carbohydrate, fatty acid, oil, or other
ordinarily renders the food injurious to ation process open to public comments substance that differs significantly from
health.11 The Act provides criminal sanc- and a decision process open to public those currently found in existing foods,
tions for violation of its prohibited acts,12 scrutiny.21 The rationale for the pre-mar- then (a) the food is not substantially
and perhaps more significantly, by ket extensive review was the uncertainty equivalent24 to foods already on the mar-
criminalizing conduct, the Act provides a about whether the genetically engineered ket, (b) the “new” proteins, etc., will not
foundation for civil liability. Section 402 Flavr Savr tomato was “substantially be GRAS, and (c) the food with “new”
is also the statutory basis of FDA’s “post- equivalent” to existing tomatoes, which proteins, etc., is subject to the pre-mar-
market” authority to remove food from are recognized as safe. If it was not sub- ket review and approval requirements of
the market that has been found, through stantially equivalent to existing toma- § 409 (unsafe food additives).
experience or otherwise, to be unsafe. toes, its transgenic food components
·Act § 409. (Unsafe) Food Additives. would be a “food additive” (i.e. not GRAS) For example, if the genes in a new
Summary: The addition of an “unsafe” and the food would be required to un- plant variety express themselves in food
food additive to food, or the introduction dergo pre-market review and approval as a novel protein sweetener, that sweet-
into interstate commerce of food with an under § 409.22 FDA’s conclusion was that ener would trigger the submission of a §
“unsafe” food additive, is prohibited.13 the Flavr Savr tomato was “substantially 409 food additive petition by the com-
Food additives are “unsafe” unless, for equivalent” to its non-genetically engi- pany and mandatory pre-market approval
example, the additive and its use are in neered tomato counterparts. More im- by FDA. But the mere presence of recom-
conformity with a federal regulation pre- portantly, the experience gained in the binant DNA in the food, by itself, would
scribing the conditions for safe use.14 Flavr Savr considerations contributed to not trigger the pre-market approval ap-
Substances that are “generally recog- the development of FDA’s 1992 Policy paratus.25
nized as safe” (GRAS) by scientists are Statement regarding foods derived from A company could easily have questions
excluded from the definition of “food ad- new plant varieties. about food from its new plant variety.
ditives” and, therefore, cannot be a § 409 For example, is the food substantially
(Unsafe) Food Additive.15 Importantly, § FDA’s 1992 policy statement: foods equivalent to existing foods and thereby
409 is the basis for FDA’s only “pre- derived from new plant varieties generally recognized as safe (GRAS)? Or
market” approval requirements for ge- FDA’s 1992 policy statement clarified is pre-market approval required? The
netically engineered food or any other FDA’s legal and regulatory framework 1992 policy statement provided guidance
food. for foods derived from new plant variet- on when the company should voluntarily
· Act § 343. Misbranded Food. Sum- ies, including new varieties developed consult with FDA on scientific issues, the
mary: The misbranding of food or intro- through genetic engineering. It estab- design of appropriate test protocols,
ducing misbranded food into interstate lished a “standard of care” for the devel- whether a food additive petition under §
commerce is prohibited.16 Foods are mis- opers of new crop varieties regarding the 409 would be required, and the require-
branded if, for example, the label is false testing necessary to assure that foods ments for labeling. Although the consul-
or misleading.17 arising from the new plant varieties would tations are technically voluntary, they
·Act § 701. Regulations and Hearings. be as safe as other foods. It provided have become part of the standard of care
General authority to promulgate regula- guidance as to when a new plant variety expected of industry and are relevant in
tions for the enforcement of the Federal would trigger the pre-market approval determining civil liability in cases in-
Food, Drug, and Cosmetic Act is del- requirements of § 409. And it provided volving unsafe food. As a practical mat-
egated to the Secretary of Health and guidance to producers regarding when ter, the voluntary consultations are tan-
Human Services (the “departmental they should voluntarily consult with FDA tamount to being mandatory.26 A list of
home” for FDA).18 regarding various issues. Under this completed consultations can be found on
· Act § 408a. Pesticide Tolerances. framework, foods derived from geneti- the World Wide Web.27 A helpful expla-
Summary: Foods containing “unsafe” lev- cally engineered crop varieties are regu- nation of when a company should consult
els of pesticide residues are brought lated using an approach identical in prin- with FDA, and a decision diagram show-
within the meaning of § 402 Adulterated ciple to that applied to foods derived from ing the critical points when consultation
Foods, thus making their sale unlawful. conventionally developed new varieties.23 should occur, can be found in a 1992 issue
Unsafe levels of residues include those Under FDA’s 1992 policy the safety of of Science.28
exceeding the “tolerances” established food and its regulatory status (is pre- FDA’s 1992 policy also addressed la-
by EPA. The Administrator of EPA is market approval required or not?) de- beling of foods derived from new plant
given the authority to issue regulations pends on specific characteristics of the Continued on page 6

MAY 2000 AGRICULTURAL LAW UPDATE 5
GM FOODS/Cont. from page 5 cepts present in the laws provide flexibil- foods to market so far have participated
varieties, including plants developed by ity to agencies as they promulgate rules in the voluntary consultations. The re-
genetic engineering. The FDCA defines and regulations which are the heart of sults of those consultations are available
the information that must be disclosed in the regulatory effort. to consumers under the Freedom of In-
labeling. The Act also requires that all Regulating the product, not the process: formation Act, and FDA has asked the
labeling be truthful and not misleading, should GM foods be subject to a separate public for advice about how it might
but it does not require disclosure in label- regulatory scheme because they are de- make the consultation data available in a
ing of information solely on the basis of rived from a genetic engineering process, more user-friendly manner. Critics ar-
consumer desire to know. or should they be regulated like all other gue that the voluntary nature of the
FDA requires special labeling if the foods where the focus is on the character- consultation, on its face, erodes consumer
composition of the GM food differs sig- istics of the product? Consistent with the confidence and, in a procedural sense,
nificantly from its conventional counter- Coordinated Framework, FDA currently does not provide the kind of “sunshine”
part. For example, if a food contains a focuses on the characteristics of the food on the decision-making process that a
major new sweetener as a result of ge- product, not the fact that it may have mandatory consultative process would
netic modification, a new common name been produced from a plant produced provide.
or other labeling may be required.29 Simi- from the process of genetic engineering, Labeling and allergies: by not labeling
larly, if a new food contains a protein in determining how it is regulated. For all genetically engineered foods, is FDA
derived from a food that commonly causes example, foods derived from Bt corn or putting the public at greater risk of in-
allergic reactions (and the developer can- Roundup Ready soybeans are not subject gesting a new allergen and suffering an
not demonstrate that the protein is not to a separate, mandatory regulatory allergic reaction? FDA does not believe
an allergen), labeling would be necessary scheme. However, they are subject to a that a GM food is any more likely to cause
to alert sensitive consumers. Regarding voluntary consultation process. Critics an allergic reaction than a non-GM food.
the need to label a food just because it is argue that the process of creating plants It notes that about ninety percent of all
from a genetically engineered plant vari- through genetic engineering makes GM food allergies in the U.S. are caused by
ety, FDA does not require foods produced foods inherently different, creates inher- cow’s milk, eggs, fish and shellfish, tree
from GM crops to be specially labeled.30 ently different risks, and should be sub- nuts, wheat, and legumes (especially
FDA’s rationale is that it has no basis to ject to a strict regulatory scheme applied peanuts and soybeans). Under existing
distinguish genetically engineered foods to all foods derived from genetically engi- policy, companies must generally tell con-
as a class from foods developed through neered plants. sumers on the food label when the food
other methods of plant breeding. Pre-market approval and substantial contains a gene from one of these com-
equivalence: should all foods derived from mon allergy causing foods. FDA also indi-
Genetic engineering and food-safety: genetically modified plants be subject to cates it has no scientific evidence to indi-
some key regulatory issues mandatory pre-market approval, even cate that any of the new proteins intro-
The use of foods derived from genetic food thought to be “substantially equiva- duced into food by GM foods will cause
engineering has been controversial.31 In lent” to its non-GM counterpart? Most allergies. And, in the unlikely circum-
the United States, the FDA has addressed foods have not been tested and approved stance that the GM food does cause aller-
this controversy by holding a series of by FDA before coming to market. Under gic reactions, FDA can exercise its post-
public meetings in late 1999 titled “Bio- current laws and regulations, the only market authority to remove the food from
technology in the Year 2000 and Be- foods subject to FDA pre-market approval stores, just as it would with unsafe foods
yond.” These meetings, held in Chicago, (FDCA, § 409 - Food Additives) are foods resulting from other remote risks. Crit-
Washington, D.C., and Oakland, have containing added substances. Under its ics argue that a new protein in a GM food
served as a forum for the airing of views 1992 policy statement, FDA does not could theoretically be a new allergen and
from experts and lay citizens regarding generally require pre-market approval there is no known test that can assure it
the current regulation of foods derived for genetically modified foods – it views is not; therefore, consumers who wish to
from genetically modified plants. A sam- the GM food as GRAS unless there is a choose non-GM foods as a way of avoiding
pling of these issues appears below and significant difference in its proteins, car- a “new allergen” risk cannot tell which
transcripts from these meetings can be bohydrates, etc., compared to the food’s foods might be genetically engineered.
obtained from the FDA’s internet site.32 non-GM counterpart. Only if there are Consumer choice and labeling: should
significant differences, is pre-market ap- genetically engineered foods be labeled to
New technology and a patchwork of old proval required. To date, most of the GM allow consumers to choose? The issue is
laws: does the patchwork of older legisla- foods reviewed by FDA under its volun- more complex than it would first appear.
tion provide an adequate statutory basis tary consultation procedures have not Should foods containing some threshold
for the regulation of new risks associated been viewed as significantly different, so of GM ingredients be subject to manda-
with products at the cutting edge of tech- most GM foods have not been formally tory labeling or should the labeling policy
nological innovation? The Coordinated reviewed and approved by FDA before simply allow (as it currently allows) the
Framework relies on a patchwork of laws entering the market. Critics argue that food industry to segregate, label as “GM
such as the 1938 Federal Food, Drug, and no GM foods are exactly equivalent to Free,” and supply foods that are below an
Cosmetic Act as the statutory basis for their non-GM counterparts; therefore, established threshold for GM free? How
biotechnology regulation. Critics argue all should be subject to the existing pre- do we best use the limited amount of
that these laws were not enacted to regu- market approval requirements applying “label space” available? How do you label
late biotechnology and have been to food additives. genetically engineered foods without mis-
stretched beyond their original regula- Voluntary consultations: should the leading the public?
tory intent. Others argue that the laws voluntary consultative procedure de- Getting maximum bang for the regula-
are sufficient to identify the broad agri- scribed in FDA’s 1992 Policy Statement tory buck: if FDA were given new funding
cultural, environmental, and food-safety be made mandatory? Although techni- to improve the safety of food, would it
concerns related to biotechnology and to cally voluntary, the threat of civil liabil- make sense to invest those new dollars in
assign regulatory oversight to appropri- ity makes the consultations tantamount combating the risks of genetically engi-
ate agencies, and that the laws have been to mandatory in the eyes of the compa- neered food or combating other food safety
amended as necessary to fix outdated nies. And FDA believes all companies risks? Microbial spoilage and food con-
provisions. Furthermore, the broad con- that have brought genetically engineered taminants (substances like lead or diox-

6 AGRICULTURAL LAW UPDATE MAY 2000
ins) probably pose much greater risks to ties for the public and scientific experts information.35 More specifically, the plans
the safety of the food supply than genetic to be heard, and for both the regulated call for the following steps regarding food
engineering. In light of this, should new (the researchers and companies) and the safety:
funds be invested in new programs to intended beneficiaries of regulation (the · The Food and Drug Administration
combat food spoilage and contamination, consumer and the public) to fully partici- (FDA) will take steps to ensure that it is
or in expanding FDA’s capacity to con- pate. It generally operates in a manner informed at least 120 days before new
duct pre-market reviews and approvals that instills public confidence. It is dy- agricultural biotechnology crops or prod-
of all foods derived from genetically engi- namic and undoubtedly will continue to ucts are introduced into the food supply
neered foods? evolve. It has been tested by controver- and will propose that submitted infor-
sial issues in the past and has managed mation and the agency’s conclusion be
Narrow regulatory mandates: do the to evolve and adapt successfully to chang- made available to the public.
narrow statutory mandates to agencies ing scientific discoveries and political ·The U.S. Deptartment of Agriculture
prevent them from considering ethical realities. It is difficult to imagine that a (USDA), FDA, and the Environmental
and religious dimensions of biotech-re- truly erroneous regulatory decision re- Protection Agency (EPA) will support an
lated issues? The regulatory jurisdiction garding biotechnology would be made, or expanded program of competitively
of FDA, for example, is statutorily fo- stand very long if it were made. Either awarded, peer-reviewed research focus-
cused on food safety and labeling issues. consumers, scientists, the public at large, ing on current and future safety issues.
FDA has no statutory authority to ban the courts, the legislature, or the increas- · FDA will develop guidelines for vol-
GM foods because of ethical or religious- ingly important international commu- untary efforts to label food products un-
based concerns about genetic engineer- nity would find a way to effectively inter- der their authority as containing or not
ing. Some who hold such views believe vene. containing bioengineered ingredients in
the statutes should empower the agen- a truthful and straightforward manner,
cies to look beyond their current scope of Can biotech-related food-safety regula- consistent with the requirements of the
authority. Others believe that such ethi- tion be improved? Federal Food, Drug, and Cosmetic Act.
cal and religious views are entirely proper Our system of regulating biotechnol- · USDA, FDA, EPA, and the State
as a basis for individual actions, e.g., ogy is not a perfect system.34 We should Department will enhance domestic and
consumer boycotts. They argue, however, continue to evaluate both the regulatory foreign public education and outreach
that agencies should not be enforcers of system and its specific regulatory ac- activities to improve understanding of
ethics or religion because such a role tions. And we should continue to work the nature and strength of our regulatory
would raise the issues of “whose ethics” diligently to identify where improvements process.
and “whose religion;” instead, such is- can be made. For example, regarding the
sues should be deferred to the political system of biotech regulation, should there On their face, these initiatives seem to
arena, subject to constitutional limits on be some rearrangement or consolidation be a reasoned response intended to im-
the role of government and protections of in the agency roles outlined in the Coor- prove a regulatory scheme that is cur-
individual freedoms. It should be noted dinated Framework? Does the system rently serving U.S. consumers quite well.
that the narrow mandates of biotech regu- strike the appropriate balance between But the details will be important, and
lators and the current labeling void for formal governmental regulation and the they have yet to be developed.
genetically engineered foods creates a less formal regulation of consumer choice
dilemma for those who object to biotech- exercised through the marketplace? Has
1
nology on religious or ethical grounds. the system struck the correct balance See, e.g., Food and Drug Administra-
They are either forced to recast their between our society’s insatiable desire tion, Genetic Engineering: Fast Forward-
objections as concerns about health and for safety and its insatiable demand for ing To Future Foods (article revised Feb-
environmental risks (if they are to have innovation and new products, such as ruary 1998 and visited May 16, 2000).
any impact on agency rule-making), or those resulting from genetic engineer- <http://www.fda.gov/bbs/topics/CON-
they must resort to public protests and ing? To what extent should our domestic SUMER/geneng.html>.
2
civil disobedience (if they are to other- regulatory scheme be in harmony with See Gerald C. Nelson et al, The Eco-
wise “live” their beliefs). If it were pos- the schemes of trading partners or defer nomics and Politics of Genetically Modi-
sible, through some resolution of the la- to international trading rules? fied Organisms in Agriculture: Implica-
beling issue, to empower these people to Regarding specific agency actions, can tions for WTO 2000, at 32 (1999) (Bulle-
“live” their beliefs through consumer FDA find some resolution of the labeling tin 809, November 1999, Office of Re-
choice, such a resolution might bring issue (perhaps some guidance for volun- search, College of ACES, U. of Illinois at
greater clarity to the arguments about tary labeling as was developed for or- Urbana-Champaign).
3
health and environmental risks and de- ganic foods)? Should FDA make its 1992 For an excellent, brief discussion of
fuse some of the public protests about voluntary consultation procedures man- the contemporary setting of biotechnol-
genetically engineered foods. datory? Can the food testing and risk ogy, science, government regulation, and
analysis data developed in those consul- public concern, see the Preface to Na-
Conclusions and recent develop- tations be more readily available to con- tional Research Council, Genetically
ments sumers who want that information, per- Modified Pest-Protected Plants: Science
How healthy is the food-safety regulatory haps through “Food Safety Assessments” and Regulation (2000). This publication
scheme that would be available on the internet is available from National Academy Press
How healthy is the regulatory scheme and functionally analogous to the Envi- and is on the Internet (visited May 16,
for genetically engineered food? There is ronmental Assessments of agency ac- 2000) at <http://books.nap.edu/catalog/
considerable evidence that the regula- tions required by the National Environ- 9795.html>.
4
tory system’s vital signs are surprisingly mental Policy Act? Are there other ap- Regarding the safety of bioengineered
healthy.33 The system has appropriate proaches to these and other issues that foods generally, see U.S. Food and Drug
checks and balances, overall responsibil- would better serve the public interest? Admin., Are Bioengineered Foods Safe?,
ity is shared between governmental and In a Press Release issued May 3, 2000, DA Consumer Magazine Jan.-Feb. 2000
private entities, and decision making the White House announced plans to (visited Jan. 31, 2000). < http://
generally takes place “in the sunlight” of strengthen science-based regulation of
public scrutiny. It provides opportuni- biotechnology and consumer access to Continued on page 3

MAY 2000 AGRICULTURAL LAW UPDATE 7