Appellate court invalidates key elements of Bioengineered Food Disclosure Standard regulations

In upholding the lower court decision, the court held that AMS’s digital disclosure provision is unlawful because it does not provide sufficient consumer access to information about bioengineered foods, given the limitations USDA identified in 2017 with QR code access in retail stores.  (Of course, today, QR code access is magnitudes greater than it was in 2017.) Relatedly, the court found that providing for a “text message” disclosure option as a standalone alternative to digital disclosure impermissibly expanded the options for complying with the BE Rule beyond the statutorily provided “text, symbol, or electronic or digital link” choices, and is therefore unlawful under the Administrative Procedures Act (APA). Although the court agreed that AMS’s digital and text disclosure regulations violate the statute, with respect to the remedy for this violation, it reversed the lower court’s decision not to vacate the disclosure regulations and, instead, directed the lower court to prospectively vacate the regulations after “receiving the parties’ input as to the proper form of such a prospective vacatur.”  This means a further court decision must be issued to provide guidance on how the digital disclosure requirements will change. The Ninth Circuit did not directly opine on what method of digital disclosure would be compliant but did quote a section of the lower court’s decision that suggested adding text message instructions to the digital disclosure might “fix the problem of inaccessible electronic disclosures.”  That is, the district court suggested that an on-pack statement that provides QR code instructions (“Scan here for more food information”), a phone number that can be called to access the disclosure, and a phone number that can provide the disclosure via a text message may be compliant with the BE Rule.  (We note here that the lower court did not discuss the important factor that companies using the digital disclosure are already required to provide an on-pack phone number that can be called to obtain the disclosure.)

Additionally, the court reversed the lower court’s decision to uphold AMS’s exclusion of highly refined foods that do not contain detectable modified genetic material from the definition of bioengineered foods that require disclosure. In doing so, the court held that AMS improperly justified the detectability standard by arguing that foods that contain non-detectable amounts of genetically modified material are “legally equivalent” to foods that do not contain genetically modified material. The court noted that a detectability standard could potentially survive review if grounded in AMS’ statutorily derived discretionary powers. Stated differently, the court implied that if AMS were to better describe its rationale for excluding foods where bioengineered content is non-detectable, that rationale might survive review.  Therefore, AMS may be able to fix the detectability standard with a better administrative record.  The open question for the lower court on this issue is whether to vacate portions of the regulations in the meantime.

Finally, the court upheld AMS’s decision to mandate the use of the term “bioengineered,” as opposed to alternative terms like genetically engineered (GE) or genetically modified organism (GMO), in order to comply with the BE Rule. The court explained that it was reasonable for AMS to mandate the use of the term bioengineered because doing so clearly defined the technology being disclosed and “bioengineered” was the statutory term used by Congress.

No immediate changes are required by food manufacturers, but future changes will be needed for companies relying on the digital disclosure to comply with the BE rule.  There is not a clear timeline for when and how the requirements for digital disclosure and/or disclosure of highly refined ingredients will change. AMS has a clear path to revise the detectability standard to align with its discretionary powers, such that highly refined foods that do not contain detectable modified genetic material could remain excluded from or not subject to the disclosure requirement. This outcome seems more likely given that the first Trump Administration issued the original final BE Rule with its exclusion of highly refined ingredients. However, the court’s decision also requires the lower court to eventually vacate the digital and text message disclosure rules, which means that food manufacturers currently using the digital (or text message) disclosure will have to prepare to come into compliance with a new regulatory scheme at some point in the future.

More details follow.

Background

In a 2020 lawsuit filed against USDA, the USDA Secretary, and the AMS Administrator, plaintiffs –including retail stores that sell natural and organic food products, and food safety advocacy organizations – challenged the disclosure statute and implementing regulations issued by USDA. Plaintiffs primarily argued the regulations violate the APA because they (1) permit a text message disclosure option as an alternative to a digital disclosure; (2) require disclosures that use the word “bioengineered;” and (3) exclude highly refined foods that do not contain detectable amounts of bioengineered materials. In 2022, the lower court invalidated the text message disclosure regulation and denied plaintiffs' motion in all other respects. The lower court declined to vacate the text message disclosure regulation until AMS revised the final rule consistent with the court's decision. That is, USDA was given time to amend the regulations without a need for companies to immediately change their disclosure practices. In its October 31, 2025, decision, the Ninth Circuit upheld the decision to invalidate the text message disclosure option but ruled that the lower court abused its discretion by declining to vacate the regulation. Accordingly, the Ninth Circuit ordered the lower court to craft a “prospective vacatur” that considers the parties' views.  Additionally, the Ninth Circuit reversed the lower court's decision approving the exclusion of highly refined foods from the definition of bioengineered food. The Ninth Circuit otherwise affirmed the lower court's decision, including upholding USDA's mandated use of the term “bioengineered” as opposed to “GMO.” We provide more details about the decision below.

As brief background, the statute directed USDA to conduct a study to “identify potential technological challenges that may impact whether consumers would have access to the bioengineering disclosure through electronic or digital disclosure methods.” In the event USDA determined “that consumers, while shopping, would not have sufficient access to the bioengineering disclosure through electronic or digital disclosure methods,” the agency was directed to “provide additional and comparable methods” to access the disclosure. AMS hired Deloitte Consulting to conduct the study, and based on the results of the study, concluded that “consumers would not have sufficient access to the bioengineering disclosure through electronic or digital means under ordinary shopping conditions at this time.” To improve consumer access to the bioengineering information, AMS created a fourth disclosure option involving text messages, separate from the digital disclosure method. Under the final rule, companies could choose among the text disclosure statement on the label, symbol, text message, or the digital disclosure option. The digital option also requires a phone number on-pack that provides access to the disclosure.

Decision on Digital and Text Message Disclosures

The Ninth Circuit affirmed the lower court's decision, which found that AMS's decision to provide a separate text message disclosure option did nothing to fix the problem of inaccessible digital disclosures. Instead, the text message option merely provided a fourth disclosure option that regulated entities can select instead of the digital disclosure method. The court likewise concluded that nothing in the statute permitted AMS to expand the disclosure options for manufacturers beyond the “text, symbol, or electronic or digital link” choices. In short, the court found that the digital disclosure regulation as written is unlawful because it does not create sufficient access to information about bioengineered food as required by the statute; and the text message disclosure is unlawful because, contrary to the statute, it established a fourth disclosure option instead of fixing the existing digital disclosure option. To that end, the court held that because AMS did not appeal the lower court's decision that the digital disclosure and text message disclosure regulations are unlawful, the readoption of those rules on remand is precluded and “underscores that the AMS committed a serious error that weighs in favor of vacatur.” Although the Ninth Circuit itself did not opine on what revisions AMS should make to bring the digital disclosure option into compliance with the BE Rule, it did favorably quote the lower court, which said that an example of fixing the digital disclosure would be to “add[]...the alternative text message instructions to the electronic disclosure.”

When considering the question of whether/how the digital disclosure and text message disclosure rules should be vacated, the Ninth Circuit held that the lower court abused its discretion by declining to vacate the rules until AMS revised the final BE Rule in a manner consistent with the lower court's decision. The court reasoned that the lower court erred in finding that vacatur would disrupt consumer access to bioengineering disclosure because the lower failed to account for the finding that a QR code provides inadequate access to bioengineering information. However, consistent with the arguments we outlined in an amicus brief filed by the Consumer Brands Association,² the Ninth Circuit did agree that vacatur would disrupt the food industry, finding that the tens of thousands of products labeled in accordance with the current BE Rule constituted sufficient evidence in the administrative record of industry reliance on the Rule. Accordingly, the court declined to adopt Plaintiffs' position that the disclosure rules are immediately invalid and that millions of labels should be made instantly unlawful. Instead, it ordered the lower court, on remand, to consider the parties' views and fashion a “prospective vacatur” under which, for example, sell-through of existing labels would be permitted for a period of time with a deadline for the shipment of new labels. This means that, for now, no changes are needed related to the digital or text message disclosure while the lower court hears the question of a prospective vacatur on remand. Once the lower court issues a decision, there will be greater clarity on any changes needed for companies using the digital or text message disclosure and the timeline for such changes.

Definition of “Bioengineered Food” and Treatment of Highly Refined Foods

The court reversed the lower court's finding that AMS was reasonable in excluding highly refined foods that do not contain detectable modified genetic material from the definition of bioengineered food. The court explained that, according to the statute, food is “bioengineered” if it “actually has modified genetic material within it” regardless if such material is detectable. The court found that AMS “relied entirely on the flawed legal premise that non-detectability of a substance under the regulation was equivalent to its non-presence” and made no mention of its statutorily derived discretionary powers. In particular, AMS has discretion under the statute to “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.”³  Because AMS failed to analyze the detectability issue under the framework of this specific authority, the court held it was precluded from upholding the detectability standard on that basis.

Although the court held that AMS did not cite the appropriate statutory authority in crafting the detectability standard, it rejected Plaintiffs' argument that AMS has no discretionary authority to exempt highly refined foods from disclosure. The court noted that the statute “unmistakably directs the agency to set the levels of bioengineered substances that, if present, will qualify the food “to be a bioengineered food.” Therefore, the court left open the possibility for AMS to use its discretionary authority to define some level of modified genetic material, below which highly refined foods would not be required to provide a bioengineered disclosure.

The court ultimately declined to immediately vacate the detectability standard and exclusion for highly refined ingredients.  Instead, it ordered the lower court to, on remand, determine which portions of the detectability standard, if any, to vacate or leave in place pending AMS revising the final rule in accordance with the court decision.

Restrictions on Use of the Terms GE/GMO

The court rejected Plaintiffs' arguments that challenged AMS regulations to the extent they require disclosures to use the term “bioengineered” as opposed to more consumer friendly terms like GE or GMO, reasoning that “it was not arbitrary and capricious for [AMS] to conclude that allowing regulated entities to satisfy the disclosure requirement by picking and choosing from a menu of different terms” would “muddy the scope of disclosure.” Rather, choosing a uniform term to ensure consistency and minimize marketplace confusion was a “reasonable and reasonably explained” conclusion. Moreover, the court held that AMS properly determined that the uniform term should be “bioengineered” rather than “genetically modified” or “GMO” because “it was the term ‘used by Congress,' it ‘clearly and accurately described the technology' being disclosed, and it would avoid ‘inconsistencies with the preemption provisions' of the Act.”⁴ Plaintiffs' arguments that “bioengineering” and “genetically engineered” are interchangeable terms ignores the fact that the statute “expressly limits the definition of ‘bioengineering' to those foods ‘contain[ing] genetic material that has been modified through in vitro recombinant [DNA]  techniques'”⁵ and explicitly  authorizes AMS to determine if the terms “genetically engineered” and “GMO” are similar enough to satisfy the statutory definition of bioengineering.

Next Steps

No immediate changes are needed by food manufacturers at this time, but this will change in the future, particularly for companies relying on the digital (or text message) disclosure options. AMS has a clear path to continue excluding highly refined foods from BE Rule disclosure requirements. The Ninth Circuit remanded the case to the lower court with instructions to (1) find unlawful the current detectability standard (while also leaving open the ability for AMS to craft a detectability standard based on its discretionary authority, which the court suggested could survive review); (2) remand the final BE Rule to AMS for revisions; and (3) determine whether any portions of the BE Rule should be vacated.

Upon direction from the lower court in accordance with the Ninth Circuit's instructions, AMS would then be tasked with revising the final rule to address both issues.  AMS would need to undertake notice and comment rulemaking, including issuing a proposed rule and providing an opportunity for public comment. Note that since the lower court's 2022 decision, AMS has listed on its regulatory agenda its plans to issue a proposed rule to amend the text message disclosure option and add language to the digital disclosure option, although no such proposed rule has been published. In the meantime, the current BE Rule remains in effect, while the lower court considers the parameters under which it will prospectively vacate the digital and text disclosure regulations and whether it will vacate the detectability standard. It is possible that food manufacturers may have to come into compliance with new labeling requirements before AMS issues a revised rule, should the lower court's prospective vacatur go into effect before AMS's rulemaking process is completed.

Authored by: Veronica Colas and Chigozie Akah.