Kind Bar Plaintiffs v. Kind Bar Defendants

Filing 91

OPINION & ORDER: re: (100 in 1:15-md-02645-WHP) MOTION to Dismiss Plaintiffs' Non-GMO Claims, filed by Kind, LLC, (108 in 1:15-md-02645-WHP) MOTION to lift Stay on "all natural" claims re: (83) Memorandum & Opinio n, filed by Charity Bustamante, Sarah Thomas, Amanda Short, Elizabeth Livingston. For the foregoing reasons, KIND's motion to dismiss the "non-GMO" claim is denied. Prosecution of the "non-GMO" claim is stayed un til August 15, 2018. Additionally, Plaintiffs' motion to lift the stay of their "all natural" claim is denied without prejudice to renew after August 15, 2018. The Clerk of Court is directed to terminate the motions pending at ECF N os. 100 and 108, and as further set forth in this order. Motions terminated: (100 in 1:15-md-02645-WHP) MOTION to Dismiss Plaintiffs' Non-GMO Claims, filed by Kind, LLC, (108 in 1:15-md-02645-WHP) MOTION to lift Stay on "all natural" claims re: (83) Memorandum & Opinion, filed by Charity Bustamante, Sarah Thomas, Amanda Short, Elizabeth Livingston.(Docketed in 15md2645 and 15mc2645) (Signed by Judge William H. Pauley, III on 3/2/2018) (ap)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE:
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KIND LLC “HEALTHY AND ALL
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NATURAL” LITIGATION
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This Document Relates to All Actions
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15-MD-2645 (WHP)
15-MC-2645 (WHP)

OPINION & ORDER

WILLIAM H. PAULEY III, United States District Judge:
Defendants KIND LLC and KIND Management, Inc. (together, “KIND”) seek
dismissal of Plaintiffs’ Amended Consolidated Class Action Complaint (the “Amended
Complaint”). Plaintiffs allege that KIND deceptively marketed its products as “natural” and
“non-GMO” even though they contain synthetic and genetically modified ingredients. This Court
previously stayed the “natural” claim. KIND now seeks to dismiss or stay the “non-GMO” claim.
Separately, Plaintiffs move to lift the stay of the “natural” claim. They assert that
the Federal Drug Administration’s (“FDA”) rulemaking process to define the term “natural” has
stalled since May 2016 when the agency closed its notice and comment period. Plaintiffs are
eager to forge ahead on their “natural” claim in tandem with their “non-GMO” claim, and contend
that indefinitely staying the “natural” claim will result in undue delay and prejudice.
For the reasons that follow, KIND’s motion to dismiss or stay the “non-GMO”
claim is granted in part and denied in part, and Plaintiffs’ motion to lift the stay on the “natural”
claim is denied without prejudice.

BACKGROUND
I.

Relevant Procedural History
A. Motion to Dismiss the Original Complaint
On September 15, 2016, this Court granted in part KIND’s motion to dismiss the

original complaint. See In re KIND LLC “Healthy and All Natural” Litig., 209 F. Supp. 3d 689
(S.D.N.Y. 2016). As an initial matter, this Court disposed of the original complaint’s “healthy”
claim after Plaintiffs stipulated to dismissing it. (ECF No. 74.) Invoking the primary jurisdiction
doctrine, this Court stayed the “all natural” claim, finding that the FDA’s rulemaking process
should run its course before allowing that claim to proceed here. Finally, this Court dismissed
without prejudice Plaintiff’s “non-GMO” claim on the basis that it was insufficiently pled.
Despite largely granting KIND’s motion, this Court provided Plaintiffs with a further opportunity
to re-plead their “non-GMO” claim.
B. FDA Rulemaking Process
In November 2015, the FDA “announc[ed] the establishment of a docket to receive
information and comments on the use of the term ‘natural’ in the labeling of human food
products, including foods that are genetically engineered or contain ingredients produced through
the use of genetic engineering.” Use of the Term “Natural” in the Labeling of Human Food
Products; Request for Information and Comments, 80 Fed. Reg. 69,905–01, 2015 WL 6958210
(proposed Nov. 15, 2015) (to be codified at 21 C.F.R. pt. 101). The notice and comment period
ended in May 2016. Since then, the FDA has gone quiet, leaving various stakeholders with little
clarity on the agency’s position.
On December 15, 2016, the parties jointly provided a status report concerning the
FDA’s rulemaking process. (ECF No. 65.) Despite injecting their letter with competing

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interpretations of what the FDA might do, the parties acknowledged that the agency had not
formally issued any guidance since closing its comment period.
C. Executive Order Regarding Regulatory Rulemaking
On February 24, 2017, the parties supplemented their joint status report (see ECF
No. 98.), informing this Court of President Trump’s January 30, 2017 executive order titled,
“Reducing Regulation and Controlling Regulatory Costs” (the “Executive Order”). Exec. Order
No. 13771, 82 Fed. Reg. 9339 (Jan. 30, 2017). While the Executive Order does not specifically
reference the FDA’s rulemaking process, Plaintiffs in particular stressed that an Executive Order
rooted in scaling back regulation could stymie the FDA’s process of defining “natural.”
The Executive Order essentially imposes new requirements on agency rulemaking.
First, it directs agencies to identify “at least two existing regulations to be repealed” for every new
regulation they seek to implement. (Executive Order § 2.) This requirement essentially offsets
the cost of a new regulation by eliminating two old ones. Second, the Executive Order establishes
an annual budgeting process to control the cumulative costs imposed by each agency’s
regulations. For 2017, it required the total cost of new regulations to be zero, unless an exception
applied. (Executive Order § 2(b).) In 2018, the Executive Order directs each agency to have a
budget that accounts for the reduction of costs imposed by their own regulations. (Executive
Order § 3.)
II.

Allegations of the Amended Complaint
In their Amended Complaint, Plaintiffs re-allege the stayed “natural” claim and

seek to cure the deficiencies previously identified in this Court’s Opinion and Order underlying
their “non-GMO” claim. The Amended Complaint devotes a section to addressing KIND’s nonGMO marketing, alleging, among other things, that “[t]esting completed on June 1, 2016 detected

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the presence of GMOs in at least some of [KIND’s] Products . . .” and that at least one product
tested “positive [for] GMO soy from the ingredient soy protein isolate.” (Amended Consolidated
Class Action Complaint, ECF No. 84 (“Compl.”), ¶ 33.)
In total, Plaintiffs assert nine different claims on behalf of a putative nationwide
class and/or various state sub-classes: (1) breach of express warranty; (2) unjust enrichment or
common law restitution; (3) negligent misrepresentation; (4) violation of New York General
Business Law (“NY GBL”) § 349; (5) violation of NY GBL § 350; (6) violation of California’s
Consumers Legal Remedies Act (“CLRA”; (7) violation of California’s False Advertising Law
(“FAL”); (8) violation of California’s Unfair Competition Act (“UCL”); and (9) violation of
Florida’s Deceptive and Unfair Trade Practices Act (“FDUPTA”).
DISCUSSION
I.

Standard
The allegations in the Amended Complaint are presumed true, with all reasonable

inferences drawn in Plaintiffs’ favor, for purposes of KIND’s motion to dismiss. Rescuecom
Corp. v. Google Inc., 562 F.3d 123, 127 (2d Cir. 2009). To survive a motion to dismiss, “a
complaint must contain sufficient factual matter . . . to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 663, 678 (2009) (citation omitted); Ruston v. Town Bd. for
Town of Skaneateles, 610 F.3d 55, 59 (2d Cir. 2010). However, a claim must rest on “factual
allegations sufficient to raise a right to relief above the speculative level.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). A pleading that offers “labels and conclusions” or a
“formulaic recitation of the elements of a cause of action” fails to state a claim. Iqbal, 556 U.S. at
678 (citation omitted).

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II.

Non-GMO Claim
Plaintiffs allege that KIND’s “non-GMO” representations are false because

KIND’s products contain ingredients derived from genetically modified crops. According to
Plaintiffs, a genetically modified crop is a crop whose genetic material has been altered by
humans using genetic engineering techniques. (Compl. ¶ 2.) Moreover, “genetically modified
organisms” are “organisms in which the genetic material (DNA) has been altered in a way that
does not occur naturally,” and encompass genetically modified crops. (Compl. ¶ 2.)
Plaintiffs assert that based on testing completed in June 2016, they discovered the
presence of GMOs in some KIND products. (Compl. ¶ 33.) They also allege that many other
products contain ingredients that were produced using genetically modified crops, such as canola,
corn, and soy. Some of these ingredients were so heavily processed that the GMO DNA from
their original sources was no longer detectable in the finished products. (Compl. ¶ 34.) The
Amended Complaint specifically lists soy lecithin, glucose syrup, vegetable glycerine, canola oil,
and ascorbic acid among the “heavily-processed ingredients originating from GMO crops” found
in KIND’s products. (Compl. ¶ 35.)
A. Preemption
KIND argues that the “non-GMO” claim is expressly preempted by the National
Bioengineered Food Disclosure Standard, a federal law that took effect on July 29, 2016 (the
“National GMO Standard Law”). This statute directs the U.S. Department of Agriculture
(“USDA”) to establish “a national mandatory bioengineered food disclosure standard with respect
to any bioengineered food” by July 2018. 7 U.S.C. § 1639b(a). Among other things, the USDA
must “determine the amounts of a bioengineered substance that may be present in food, as
appropriate, in order for the food to be a bioengineered food.” 7 U.S.C. § 1639b(b)(2)(B).

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The National GMO Standard Law precludes states from establishing state-specific
food labeling standards that deviate from the GMO labeling standards codified by the USDA.
The statute’s preemption clause provides that no state may “directly or indirectly establish . . . any
requirement relating to the labeling of whether a food . . . contains an ingredient that was
developed or produced using genetic engineering.” 7 U.S.C. § 1639i(b). Despite this express
preemption provision, the National GMO Standard Law also provides that “[n]othing in this
subchapter . . . shall be construed to preempt any remedy created by State or Federal statutory
common law right.” 7 U.S.C. § 1639j.
The preemption doctrine has its roots in the Supremacy Clause of the Constitution,
which provides that the “Constitution, and the Laws of the United States which shall be made in
Pursuance thereof . . . shall be the supreme Law of the Land . . . any Thing in the Constitution or
Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. This clause
“invalidates state laws that interfere with, or are contrary to” federal law. Hillsborough Cty. v.
Automated Med. Labs., Inc., 471 U.S. 707, 712–13 (1985) (internal quotation marks and citation
omitted); Kraft Foods N. Am., Inc. v. Rockland Cty. Dep’t of Weights & Measures, 2003 WL
554796, at *4 (S.D.N.Y. Feb. 26, 2003). When analyzing the scope of a preemption clause, a
court must “start with the assumption that the historic police powers of the States were not to be
superseded by the Federal Act unless that was the clear and manifest purpose of Congress.”
Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996). The “regulation of health and safety,
including laws regulating the proper marketing of food, are traditionally within states’ historic
police powers.” Kao v. Abbott Labs. Inc., 2017 WL 5257041, at *5 (N.D. Cal. Nov. 13, 2017)
(citing Fla. Lime & Avocado Growers v. Paul, 373 U.S. 132, 144 (1963) (“States have always
possessed a legitimate interest in the protection of (their) people against fraud and deception in the

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sale of food products at retail markets within their borders.”)); Lohr, 518 U.S. at 485.
Section 1639i of the National GMO Standard Law preempts state law. 7 U.S.C.
§ 1639i (titled “Federal preemption”). While that much is clear, this Court must “nonetheless
identify the domain expressly pre-empted” by the statute’s language. Lohr, 518 U.S. at 484. The
preemptive language in the National GMO Standard Law provides that no state “may directly or
indirectly establish . . . any requirement relating to the labeling of whether a food . . . is
genetically engineered . . . or was developed or produced using genetic engineering.” 7 U.S.C.
§ 1639i(b). The issue here, then, is whether Plaintiffs seek to “directly or indirectly establish . . .
any requirement relating to the labeling of” food containing GMOs.
KIND contends that the National GMO Standard Law preempts Plaintiffs’ claims
because they rely on “state law requirements that are related to the labeling of whether a food
contains an ingredient that was developed or produced using genetic engineering.” (KIND’s
Memo. of Law in Support of Motion to Dismiss, ECF No. 101 (“Mot.”), at 6 (alterations
omitted).) KIND also cites to the voluntary dismissal of a similar case in the District of Vermont,
arguing the plaintiffs there “recognized that the preemption provisions applied immediately to the
[state] GMO labeling requirements, thereby mooting the lawsuit.” (Mot. at 5 (citing Grocery
Mfrs. Assoc. v. Sorrell, Case No. 14cv117 (D. Vt.), ECF No. 160).)
But the state consumer protection statutes on which Plaintiffs’ claims rest do not
impose a GMO standard or requirement. Those statutes only provide remedies for representations
that are untrue and misleading. Indeed, the only agency-level guidance on GMO labeling
corroborates that view: “Food manufacturers may voluntarily label their foods with information
about whether the foods were not produced using bioengineering, as long as such information is
truthful and not misleading.” U.S. Food & Drug Administration: GUIDANCE FOR INDUSTRY:

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VOLUNTARY LABELING INDICATING WHETHER FOODS HAVE OR HAVE NOT BEEN DERIVED FROM
GENETICALLY ENGINEERED PLANTS (July 1, 2016),
https://www.fda.gov/RegulatoryInformation/Guidances/ucm059098.htm. “The fact that
Plaintiffs’ claims are consistent with the current [agency] guidance supports the Court’s
conclusion that allowing Plaintiffs to pursue their state-law claims would not frustrate
Congressional intent in enacting the express preemption provision.” Kao, 2017 WL 5257041, at
*8. KIND “may not affirmatively be required to disclose its use of bioengineered ingredients (if
any exist at all), but Plaintiff[s] [are] only alleging that” the non-GMO claim “might be untrue and
misleading if [KIND] in fact does use bioengineered ingredients or processing techniques that
render [an] ingredient [genetically modified].” Parker v. J.M. Smucker Co., 2013 WL 451656, at
*4 (N.D. Cal. Aug. 23, 2013); see also Fagan v. Neutrogena Corp., 2014 WL 92255, at *1 (C.D.
Cal. Jan. 8, 2014).
Although the Sorrell plaintiffs in the District of Vermont voluntarily dismissed
their non-GMO claim, they did so for very different reasons. The non-GMO claim in Sorrell
arose from Vermont’s Act 120, which directly regulates and imposes labeling requirements on
foods containing GMO. See Vt. Stat. Ann. tit. 9, §§ 3041–48 (effective July 1, 2016). Act 120
sought to “[e]stablish a system by which persons may make informed decisions . . . [and] avoid
potential health risks of food produced from genetic engineering,” and aims to “promot[e] the
disclosure of factual information on food labels.” § 3041. The parties in Sorrell acknowledged
that Act 120’s mandate that “food offered for sale by a retailer . . . be labeled as produced
entirely or in part from genetic engineering” ran afoul of the National GMO Standard Law’s
mandates. § 3043(a). Thus, the National GMO Standard Law’s express preemption clause
foreclosed any claim arising from the violation of Act 120.

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Unlike Vermont’s preempted labeling statute, however, Plaintiffs here do not seek
to impose new standards or requirements in connection with their consumer protection claims.
They simply want to ensure that KIND’s labels are truthful. Accordingly, Plaintiffs’ claims are
not preempted by the National GMO Standard Law.
B. Primary Jurisdiction
KIND seeks, in the alternative, to stay the non-GMO claim under the doctrine of
primary jurisdiction. “Recourse to the doctrine of primary jurisdiction is appropriate whenever
enforcement of the claim requires the resolution of issues which, under a regulatory scheme,
have been placed within the special competence of an administrative body.” In re KIND, 209 F.
Supp. 3d at 693 (ellipses omitted).
Like the “all natural” claim, KIND contends that the non-GMO claim, in view of
the National GMO Standard Law, should be stayed pending the USDA’s determination of a
GMO standard. (Mot. at 7.) As it did in its previous Opinion and Order, this Court considers the
application of the primary jurisdiction doctrine under four factors: (1) whether the issue is within
the conventional experience of judges or involves technical or policy considerations within the
agency’s field of expertise; (2) whether the issue is within the agency’s discretion; (3) whether
there is a substantial danger of inconsistent rulings; and (4) whether a prior application regarding
this issue has been made to the agency. Ellis v. Tribune Television Co., 443 F.3d 71, 82–83 (2d
Cir. 2006).
i. Conventional Experience of Judges
In its previous Opinion & Order, this Court noted the judicial divide on whether
courts can properly adjudicate food labeling disputes, but ultimately expressed its “reluctan[ce]
to declare that issues of alleged consumer deception are necessarily outside the conventional

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wisdom of judges (or even juries).” In re KIND, 209 F. Supp. 3d at 695. That sentiment applies
with equal force today.
KIND urges this Court to stay the “non-GMO” claim on the ground that the
National GMO Standard Law expressly directs the USDA to formulate a GMO standard by July
2018. But even if the USDA timely develops a standard, that determination will not have a
dispositive effect on Plaintiffs’ claims. Courts have routinely held that cases involving the
mislabeling of food products are “far less about science than [they are] about whether a label is
misleading, and the reasonable-consumer inquiry upon which some of the claims in [these]
case[s] depend[] is one to which courts are eminently well suited, even well versed” to handle.
In re Frito-Lay N. Am., Inc. All Natural Litig., 2013 WL 4647512, at *8 (E.D.N.Y. Aug. 29,
2013); Ackerman v. Coca-Cola Co., 2010 WL 2925955, at *14 (E.D.N.Y. July 21, 2010) (“The
question whether defendants . . . marketed a product that could mislead a reasonable consumer is
one courts are well-equipped to handle, and is not an appropriate basis for invoking the primary
jurisdiction doctrine.”).
There is no doubt that a national GMO standard will be relevant to many of the
underlying issues in this action. If the USDA successfully formulates that standard by July 2018,
the parties may likely rely on it to strengthen their claims or defenses. Beyond that, however, a
GMO standard will not conclusively shed light on whether a reasonable consumer would have
been deceived by KIND’s representation that its products were GMO free. See, e.g., Lockwood
v. Conagra Foods, Inc., 597 F. Supp. 2d 1028, 1035 (N.D. Cal. 2009) (even if FDA were to
formally define term “‘natural,’ federal law would not dispose of plaintiffs’ state law claims”).
This question is better suited for a jury. But until the underlying claims go to trial, this Court is
well-equipped to resolve issues of “whether conduct is misleading.” Langan v. Johnson &

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Johnson Consumer Cos., Inc., 95 F. Supp. 3d 284, 292 (D. Conn. 2015); Hasemann v. Gerber
Prods. Co., 2016 WL 5477595, at *6 (E.D.N.Y. Sept. 28, 2016); Belfiore v. Proctor & Gamble
Co., 311 F.R.D. 29, 75 (E.D.N.Y. 2015) (“Generally, the judiciary is well-suited to determine a
consumer’s reasonable expectations about labeling.”). Accordingly, this factor militates against
a stay.
B. Agency’s Discretion
There is no dispute that whether genetically engineered foods may be labeled as
“non-GMO” is within the USDA’s discretion. See 7 U.S.C. §§ 1639b(b)(2)(A)–(C); 1639c(c);
1639b(f); & 6524. Accordingly, this factor weighs in favor of a stay.
C. Substantial Danger of Inconsistent Rulings
KIND contends that allowing the “non-GMO” claim to proceed just months
before the USDA is expected to formulate a national standard will result in inconsistent rulings
among various courts. (Mot. at 8 (“Courts addressing GMO labeling claims under a patchwork
of state consumer protection laws inevitably will reach different conclusions.”).) While KIND is
“correct that different judges may rule differently, the Court understands this factor to be
concerned with inconsistent rulings between courts and agencies, not between different courts.”
Hasemann, 2016 WL 5477595, at *7; Elkind v. Revlon Consumer Prods. Corp., 2015 WL
2344134, at *10 (E.D.N.Y. May 14, 2015) (“[T]he danger of inconsistency on which the Court
focuses is the danger that the FDA may issue guidance that conflicts with the Court’s ruling.”).
Nevertheless, as this Court has previously noted, agency “guidance could explain
whether ingredients” derived from genetically modified crops could be considered “non-GMO.”
In re KIND, 209 F. Supp. 3d at 696. Moreover, staying this action until the USDA offers
guidance—which it is statutorily obligated to do—would “almost certainly help harmonize court

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rulings” and avoid any glaring conflicts with the USDA. In re KIND, 209 F. Supp. 3d at 696.
Accordingly, this factor weighs in favor of a stay.
D. Prior Application to Agency
The parties have not formally made applications to the USDA on this issue, but
the agency’s work is underway pursuant to the National GMO Standard Law. Thus, this factor
supports a stay until the USDA has concluded its work.
E. Potential Delay
In addition to the four Ellis factors, this Court may “balance the advantages of
applying the doctrine against the potential costs resulting from complications and delay in the
administrative proceedings.” Ellis, 443 F.3d at 83 (quoting Nat’l Commc’ns Ass’n, Inc. v.
AT&T Co., 46 F.3d 220, 222 (2d Cir. 1995)). Unlike the FDA’s work on the “natural” issue,
there is less of a concern that this action will be needlessly delayed because the USDA is
statutorily mandated to establish a national GMO standard by July 29, 2018. 7 U.S.C.
§ 1639b(a) (“Not later than 2 years after July 29, 2016, the [USDA] shall establish a national
mandatory bioengineered food disclosure standard . . . .”). With a date in place, this Court finds
that Plaintiffs will not be unduly delayed or prejudiced pending the completion of the USDA’s
work.
Accordingly, the “non-GMO” claim is stayed until August 15, 2018 to allow the
parties to review any agency action taken by July 29, 2018 and provide a status update informing
this Court of relevant developments. If the USDA has not taken any action by that date, or
publicly provided any updates regarding its progress, Plaintiffs are free to file a motion to lift the
stay.

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III.

Sufficiency of Claims
Aside from its preemption and primary jurisdiction arguments, KIND contends

that the Amended Complaint is insufficiently pled. In its prior Opinion & Order, this Court held
that “allegations that consumers were deceived by misleading ‘non-GMO’ labels are potentially
cognizable,” but dismissed the non-GMO claim without prejudice because Plaintiffs failed to
specify which of them had “read and relied on the ‘non-GMO’ labeling statement prior to
purchasing the products,” or which of the products contained GMOs. In re KIND, 209 F. Supp.
3d at 697. Further, Plaintiffs’ reference to genetically modified crops was insufficient because it
did not tie the crops “to the KIND products purchased by Plaintiffs.” In re KIND, 209 F. Supp.
3d at 698.
The state consumer protection claims at issue here require Plaintiffs to plausibly
allege that they were deceived by KIND’s advertising and that they suffered actual injury to
money or property. Exxonmobil Inter-America, Inc. v. Advanced Info. Eng’g Servs., Inc., 328 F.
Supp. 2d 443, 449 (S.D.N.Y. 2004) (NY GBL § 349 “liability attaches primarily where a party’s
misrepresentations . . . have the potential to be repeated in order to deceive numerous similarly
situated buyers”); Greenlight Capital, Inc. v. Greenlight (Switz.) S.A., 2005 WL 13682, at *6 n.8
(S.D.N.Y. Jan. 3, 2005) (NY GBL § 350 is “based on a specific type of deception, to wit, false
advertising”); Wilson v. Frito-Lay N. Am., Inc., 2013 WL 1320468, at *5 (N.D. Cal. Apr. 1,
2013) (“actual likelihood of deception in UCL, FAL, and CLRA cases is judged by a reasonable
consumer standard”); Kais v. Mansiana Ocean Residences, LLC, 2009 WL 825763, at *1–2 (S.D.
Fla. Mar. 26, 2009) (FDUTPA requires deceptive or unfair practice, causation, and actual
damages). Moreover, Plaintiffs’ common law claims—breach of warranty, unjust enrichment,
and negligent misrepresentation—must arise from Plaintiffs’ reliance on deceptive conduct.

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Glidepath Holding B.V. v. Spherion Corp., 590 F. Supp. 2d 435, 457 (S.D.N.Y. 2007) (negligent
misrepresentation); Avola v. Louisiana-Pacific Corp., 991 F. Supp. 2d 381, 391 (E.D.N.Y. 2013)
(breach of express warranty); Greene v. Gerber Prods. Co., 262 F. Supp. 3d 38, 77 (E.D.N.Y.
2017) (unjust enrichment).
As an initial matter, KIND argues that Plaintiffs’ allegations rest on an improper
syllogism—that is, Plaintiffs rely on a general statistic that “approximately 90% of canola, 89% of
corn, and 94% of soybeans grown in the United States are genetically modified” to improperly
infer that the soy, corn, and canola-based ingredients found in KIND products are derived from
such crops. (Mot. at 11.) But that is not all Plaintiffs do. They allege that “[i]ndependent testing
[ ] confirmed the presence of GMOs in at least some of the [KIND] Products.” (Compl. ¶ 48.)
Moreover, although Plaintiffs cannot specifically tie each ingredient found in every KIND product
to a domestic GMO crop, they are not required to do so at this stage. Rather, their allegations,
taken together, sufficiently establish a basis for their claims. Ault v. J.M. Smucker Co., 2014 WL
1998235, at *5 (S.D.N.Y. May 15, 2014) (“While Plaintiff is not certain Crisco Oil contains
GMOs, the factual allegations—taken as a whole—are more than sufficient to raise a right to
relief above the speculative level.”).
Indeed, Plaintiffs take a general, but overwhelming, statistic about genetically
modified crops in the United States and plausibly connect it to the relevant ingredients found in
KIND’s products. Put another way, they identify the KIND products carrying particular GMO
ingredients that are likely to have been derived from the vast majority of GMO crops in the
United States. This is not an implausible inference to make on a motion to dismiss. Ault, 2014
WL 1998235, at *4 n.4; see also Parker, 2013 WL 451656, at *2 (finding sufficiently plausible
the allegation that “it is highly likely that” Defendant’s products contain non-natural ingredients

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“given the percentage of GM crops in the U.S.”).
Additionally, KIND asserts that the Amended Complaint fails to specify the type
or level of GMOs that a product must contain to make the label “non-GMO” misleading. But this
issue is more appropriately addressed in discovery and on summary judgment. “It is not
unreasonable as a matter of law to expect that a product labeled [‘non-GMO’] contains only
natural ingredients . . . [t]his is true even though foods labeled ‘non-GMO’ may lawfully contain
some [genetically modified] ingredients.” Segedie v. Hain Celestial Grp., Inc., 2015 WL
2168374, at *11 (S.D.N.Y. May 7, 2015) (finding this issue better suited for resolution by a jury
and that “[a] fortiori, it is enough that Plaintiffs allege that ‘natural’ communicates the absence of
synthetic ingredients”) (emphasis added).
The more critical question on this motion to dismiss is whether the allegations
sufficiently posit a theory of liability under which a reasonable consumer would have been
deceived by KIND products bearing the “non-GMO” label. The Amended Complaint sets forth
the genetically modified makeup of KIND’s products, alleges that this composite belies the “nonGMO” label, and concludes that if KIND’s products contain genetically modified ingredients then
a “non-GMO” tag may be false or misleading to a reasonable consumer. (See e.g., Compl. ¶¶ 7,
17, 56, 93.) Of course, the “truth of this theory remains to be litigated, but it cannot be dismissed
on the pleadings.” Parker, 2013 WL 4516156, at *3. The Plaintiffs have, for now, addressed this
Court’s concerns regarding the various shortcomings besetting their original complaint—they
identified the plaintiffs who relied on the “non-GMO” label (Compl. ¶¶ 7–10); specified which
KIND products contain GMOs (Compl. ¶¶ 33, 35(a)–(e)); and established, through independent
testing and plausible allegations, the likelihood that GMOs in KIND products are linked to the
vast majority of genetically modified crops (Compl. ¶¶ 33–35, 48).

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Accordingly, although the “non-GMO” claim is stayed pending the completion of
the USDA’s work on establishing a national GMO standard, KIND’s motion to dismiss for failure
to state a claim is denied.
IV.

Natural Claims
Plaintiffs’ “natural” claim has been stayed since September 2016. Despite

deferring to the FDA’s work on formulating a “natural” definition, this Court held that it would
“reconsider the appropriateness of continuing the stay as the FDA’s process unfolds.” In re
KIND, 209 F. Supp. 3d at 697. The decision to continue or lift the stay is a matter within this
Court’s discretion. See Ratner v. Chem. Bank N.Y. Trust Co., 309 F. Supp. 983, 986 (S.D.N.Y.
1969) (“Although the doctrine of primary jurisdiction is in general applied to insure uniformity of
treatment and regulation, its application and the granting of a stay pending administrative action
rests in the sound discretion of the court considering all facts and circumstances presented to it.”);
Swearingen v. Santa Cruz Natural Inc., 2014 WL 2967585, at *4 (N.D. Cal. July 1, 2014); Gitson
v. Clover Stornetta Farms, 2014 WL 2638203, at *9 (N.D. Cal. June 9, 2014) (“[T]he Court will
stay the action, and revisit the stay in six months.”); Swearingen v. Late July Snacks LLC, 2014
WL 2215878, at *3 (N.D. Cal. May 29, 2014) (“[T]he Court finds it is appropriate to stay the
action and to revisit whether the stay is still appropriate at a status conference in five months[’]
time.”).
Almost a year and a half has elapsed since the stay. In the interim, the FDA has
exhibited little discernible activity. When this Court stayed the “natural” claim, it did so on the
basis that “the issue of whether the particular ingredients referenced in the Complaint rendered the
‘all natural’ label misleading seems to be particularly within the FDA’s discretion.” In re KIND,
209 F. Supp. 3d at 695. Agency discretion aside, this Court found that two other Ellis factors—

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the risk of inconsistent rulings and prior application to the FDA—weighed in favor of a stay, but
only slightly so, in view of countervailing considerations that any FDA definition of “natural”
would not “conclusively resolve [the] issue[s]” in this case. In re KIND, 209 F. Supp. 3d at 695.
Entering a stay seemed like the more prudent and appealing course of action at the time because
the “FDA ha[d] already completed its notice and comment period” and appeared “determined to
address the ‘all natural’ labeling issue.” In re KIND, 209 F. Supp. 3d at 696. Optimistic that the
FDA would achieve the two principal objectives of primary jurisdiction—uniformity and
expertise—this Court entered the stay.
But that was then, and this is now. Since the stay was entered, very little has
happened, at least on the agency front. Undeterred, plaintiffs across the country have continued to
file consumer-related claims concerning the misleading and deceptive use of the “natural” label.
See, e.g., Stanton v. Sarenton Foods, Inc., No. 17cv2881 (N.D. Cal. 2017); Rhinesmith v.
Tradewinds Beverage Co., No. 17cv0408 (C.D. Cal. 2017); Madrigal v. HINT, Inc., No.
BC646991 (Cal. Super. Ct. 2017); Yamini v. Eden Creamery, LLC, No. BC684736 (Cal. Super.
Ct. 2017); Organic Consumers Assoc. v. R.C. Bigelow, Inc., No. 17CA8375 (D.C. Super. Ct.
2017). Other plaintiffs, whose cases were stayed under circumstances similar to Plaintiffs, have
moved to lift the stays in their cases.
The parties contend there are two intervening developments that should inform this
Court’s decision to lift or continue the stay. First, President Trump’s Executive Order directs all
agencies to evaluate their existing regulations and make recommendations regarding their appeal,
replacement, or modification. While the Executive Order extends to all agencies—not just the
FDA or USDA—Plaintiffs fear that the FDA’s work on “natural” food labeling will slow to a
crawl, delaying any conclusive decision on the term for years. Second, despite the FDA’s relative

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silence on its progress, Congress has signaled its expectation for the FDA to make headway in
promulgating a uniform standard on “natural.” In a July 2017 report accompanying the 2018
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Bill (“2018 FDA Bill”), the House Committee on Appropriations remarked:
The Committee commends the FDA for taking the first step towards
defining the term “natural” and regulating its use on food labeling by
requesting public comment on a number of relevant questions in a
November 2015 Federal Register notice. The Committee directs
FDA to provide a report within 60 days of enactment of this Act on
the actions and timeframe for defining “natural” so that there is a
uniform national standard for the labeling claims and consumers and
food producers have certainty about the meaning of the term.
H.R. Rep. No. 115-232, at 72 (2017) (emphasis added). KIND therefore contends that a stay of
this action should remain in place because the FDA’s promulgation of a “natural” definition
appears imminent.
Courts have issued mixed rulings on whether to impose or lift a stay in “natural”
labeling litigation, in view of the glacial pace of agency action. Some have cited the
“congressional interest reflected in th[e] [House Report]” that “makes it likely that the FDA will
address, in a relatively short amount of time, the use of the term ‘natural’ on food labels.” Rosillo
v. Annie’s Homegrown Inc., 2017 WL 5256345, at *4 (N.D. Cal. Oct. 17, 2017); see also Kane v.
Chobani, LLC, 645 F. App’x 593, 594 (9th Cir. 2016) (“Given the ongoing FDA proceedings
regarding the terms ‘natural’ and ‘evaporated cane juice,’ we conclude that resolution of this
action will not be needlessly delayed and that judicial resources will be conserved by staying
these proceedings.”); Scholder v. Riviana Foods Inc., 2017 WL 2773586, at *4 (E.D.N.Y. June
23, 2017). Others, however, have not been as receptive, finding that “the relative benefit of any
ultimate decision [by the FDA]—which will likely be relevant only by analogy to this case—is
not worth the potential wait.” de Lacour v. Colgate-Palmolive Co., 2017 WL 6550690, at *4
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(S.D.N.Y. Dec. 22, 2017); Mohamed v. Kellogg Co., No. 14–2449, slip op. at 5–6 (S.D. Cal. Dec.
22, 2017) (“[S]o far the progress of the FDA’s deliberations on the matter have proceeded at a
glacial pace . . . it has not decided whether it will define the term at all . . . and because this case
has already been stayed for nearly two years, Defendant’s request to extend the stay is denied.”);
Pecanha v. Hain Celestial Grp., Inc., 2018 WL 534299, at *6 (N.D. Cal. Jan. 24, 2017)
(“Defendants point to no specific FDA action reasonably anticipated in the near future which
warrants delaying this case.”); Biffar v. Pinnacle Foods Grp., LLC, 2016 WL 7264973, at *2
(S.D. Ill. Dec. 15, 2016); In re Frito-Lay, 2013 WL 4647512, at *9 (E.D.N.Y. Aug. 29, 2013).
The House Report does not fully address the question of when the FDA must
establish a “natural” standard. Because enactment of the 2018 FDA Bill triggers the 60-day
period in which the FDA must provide an action plan and time frame on defining “natural,” the
House Report’s mandate depends on Congress’s ability to pass the appropriations bill. Although
the House Report was issued in July 2017, Congress has not enacted the bill into law. Without
that critical step, the FDA-related mandate in the House Report becomes toothless. At present,
the 2018 FDA Bill has been approved at the subcommittee and committee level in both the House
of Representatives and Senate. See United States Congress, Appropriations for Fiscal Year 2018,
Regular Appropriations,
https://www.congress.gov/resources/display/content/Appropriations+for+Fiscal+Year+2018 (last
visited Feb. 22, 2018). However, the bill remains under review for initial and final passage by
both chambers, and must subsequently be approved by the President.
Even if the 2018 FDA Bill is enacted, the House Report’s directive for the FDA to
act with deliberate speed is somewhat constrained by a number of other factors. First, the FDA is
only required to report “the actions and timeframe for defining ‘natural’” within 60 days.

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Therefore, the FDA may, after 60 days, simply provide a time frame setting forth a period of
many more months, or years, to fully define “natural.” If that happens, this case will remain in
judicial purgatory for an indefinite period of time.
Further, although the broad sentiment behind the Executive Order is rooted in
cutting regulatory costs, this Court cannot discern a specific impact to the FDA’s rulemaking
work on defining “natural.” Rather, as of October 2017—more than nine months after the
Executive Order was issued—it was unclear whether the FDA had suspended its work on
formulating food-labeling rules or whether the agency would plow ahead on implementing rules
that were under consideration long before the Executive Order.
The pace of the FDA’s process is still unclear. There is no indication whether the
FDA is earnestly working toward a uniform “natural” standard, or whether it has shelved that
effort. See Heather Haddon, FDA Commissioner Wants Closer Look at Health Claims on
Packaging, Wall St. J., Oct. 10, 2017, https://www.wsj.com/articles/fda-commissioner-wantscloser-look-at-health-claims-on-packaging-1507673335 (reporting that while FDA Commissioner
said the agency is “looking at how to define ‘healthy’ and ‘natural’ more uniformly,” he has
postponed other food labeling rules); Julie Creswell, Is it “Natural”? Consumers, and Lawyers,
Want to Know, N.Y. Times, Feb. 16, 2018,
https://www.nytimes.com/2018/02/16/business/natural-food-products.html (quoting the FDA
Commissioner, “‘Consumers have called upon the FDA to help define the term ‘natural’ and we
take the responsibility to provide this clarity seriously. We will have more to say on the issue
soon.’”). Neither the House Report nor the Executive Order provide much clarity, instead inviting
each party to take what little there is to hypothesize about what the FDA may be doing. See In re
Gen. Mills, Inc. Kix Cereal Litig., No. 12–249, slip op. at 1 (D.N.J. Apr. 21, 2017) (The

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Executive Order is “very far from an indication that the FDA intends to abandon its regulatory
efforts as to the kind of ‘natural’ labeling claims involved in this action, or that the need for
regulatory expertise has abated.”).
In view of these observations, this Court believes it prudent to continue staying the
“natural” claim, but will limit its duration through the date on which the USDA is expected to
define and promulgate the “non-GMO” standard. As the parties both acknowledge, the “nonGMO” and “natural” claims should not be litigated in piecemeal fashion since it would make little
sense as a matter of judicial economy for one set of claims to advance to resolution while the
other lags behind. (Mot. at 14; Plaintiffs’ Memo. of Law in Opp. to Mot. to Dismiss, ECF No.
105, at 23; KIND’s Reply in Supp. of Mot. to Dismiss, ECF No. 106, at 9.) Though the pace of
regulatory work is always subject to change, Congress has fixed, by statute, a concrete deadline
by which the USDA must complete its work on the “non-GMO” claim. 7 U.S.C. § 1639b(a).
There is no telling when the FDA will complete its work on the term “natural,” much less provide
any public guidance on its progress. However, in the interest of litigating the “natural” and “nonGMO” 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. Therefore, like
the “non-GMO” claim, the “all natural” claim shall be stayed until August 15, 2018.
While Ellis observed that “considerations of judicial economy should not be
considered because the Supreme Court has consistently held that there are only two purposes to
consider in determining whether to apply the primary jurisdiction doctrine—uniformity and
expertise,” it also held that the primary jurisdiction doctrine “relies on the timely and good-faith
efforts of regulatory agencies in addressing issues within their domain.” 443 F.3d at 91–92.
Absent any word from the FDA about its current progress, this Court cannot sit idly by on an

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illusory assurance that something is likely to happen. See Rosillo v. Annie’s Homegrown Inc.
No. 17–2474, slip op. at 1 (N.D. Cal. Jan. 26, 2018) (“The Court will not indefinitely stay this
case on the hope that Congress or the FDA will eventually, at some unknown point time, have
something to say on this issue.”). Therefore, if the FDA fails to issue any guidance on the
“natural” claim, Plaintiffs may renew their motion to lift the stay. By then, nearly two years will
have elapsed since the stay was first entered, and this Court presumes, without more, that the basis
for lifting stay will be substantially stronger. See Rosillo, slip op. at 1 (“The Court will be
disinclined to continue the stay beyond July 2018 unless the FDA has made some indication that
the regulatory process is close to completion.”); Campbell v. Annie’s Homegrown, Inc., No. 17–
7288, slip op. at 1–2 (N.D. Cal. Feb. 7, 2018).
CONCLUSION
For the foregoing reasons, KIND’s motion to dismiss the “non-GMO” claim is
denied. Prosecution of the “non-GMO” claim is stayed until August 15, 2018. Additionally,
Plaintiffs’ motion to lift the stay of their “all natural” claim is denied without prejudice to renew
after August 15, 2018. The Clerk of Court is directed to terminate the motions pending at ECF
Nos. 100 and 108.
Dated: March 2, 2018
New York, New York

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