It’s back to the drawing board for the U.S. Department of Agriculture (USDA) regarding label disclosures for genetically modified (GMO) foods, as a federal court of appeals reversed a district court’s grant of summary judgment regarding an exemption to the department’s rule on the disclosure of genetically engineered foods.

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit held that the U.S. District Court for the Northern District of California court erred in rejecting plaintiffs’ claim that the Agricultural Marketing Service (AMS) committed a legal error by generally excluding highly refined foods from the definition of the phrase “bioengineered foods,” which described the foods that were subject to the disclosure requirement (Natural Grocers v. Rollins, No. 22-16770, 2025 U.S. App. LEXIS 28547 (9th Cir. Oct. 31, 2025)).

The panel also held that the district court abused its discretion in declining to vacate the two disclosure-format regulations, which dealt with electronic or digital linking of bioengineered food disclosures (7 C.F.R. §66.106) and text message disclosure (7 C.F.R. §66.108) .

The panel directed the district court to prospectively vacate those rules after receiving the parties’ input.

“Today’s decision is a landmark victory for the public's right to know what they eat and feed their families," said George Kimbrell, the Center for Food Safety’s Legal Director and lead counsel in the case. “We've fought for decades for GMO labeling, as required by more than 60 other countries, and today’s decision is a crucial culmination of those hard-fought efforts. QR codes alone do not provide meaningful access to all Americans, and USDA now will have to remedy that failing and provide accessible labeling. We are gratified that the court has struck down USDA’s loophole for ultra-processed GMO foods, the vast majority of which have been genetically engineered for increased pesticide tolerance.”

Pub. L. No. 114-216 required disclosure for any food that “contains” modified genetic material, but the subsequent USDA rule stated that if the modified material was not “detectable,” it was not “contained” and did not need to be disclosed.

However, the appeals panel said “there is an obvious and important difference between whether a substance is actually present and whether, using a particular method, one is able to detect that the substance is present.”

And while the appeals panel agreed with plaintiffs that the particular detectability standard AMS adopted “cannot be sustained based on the statute,” the panel concluded that “it remains open to the agency to address the subject of detectability by a proper exercise of that authority on remand. We therefore reject plaintiffs’ argument that the agency’s only option is to require disclosure with respect to all highly processed foods made from bioengineered ingredients, without regard to any measure of detectability,” the decision said.

Because the panel concluded the discretionary authority granted in the statute could allow AMS to address detectability by setting relevant “amounts of a bioengineered substance” that, if present, would qualify “the food to be a bioengineered food,” 7 U.S.C. §1639b(b)(2)(B), “we reject plaintiffs’ contention that we should order the AMS, on remand, simply to impose a disclosure requirement on all highly processed foods that were made from bioengineered ingredients.”

The court also directed the district court to determine if any of the regulations should be vacated, “pending the district court’s remand of the matter to the agency.”

The plaintiffs also contended AMS’s decision was “arbitrary and capricious” under the Administrative Procedures Act (APA) and must be set aside (5 U.S.C. §706(2)). The panel disagreed, saying that “as an initial matter, we hold that the AMS permissibly concluded that the disclosure standard should rely on a single, uniform term that must be used in all disclosures. That is, it was not arbitrary and capricious for the agency 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.’”

“As the AMS explained, requiring a single, uniform term would ‘ensure disclosure consistency and minimize marketplace confusion.’ That conclusion is ‘reasonable and reasonably explained,’ and it is not arbitrary and capricious,” the decision said.

“The key question, then, is whether the AMS properly determined that the required uniform term should be ‘bioengineered’ rather than ‘genetically modified,’ ‘GMO,’ or some other similar term. As noted, the AMS selected ‘bioengineered’ 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.”

The decision added “AMS’s choice to use the particular term that Congress itself chose – ‘bioengineered’ – was not arbitrary and capricious.” Given that comments during the rulemaking “argued that Congress’s specific definition of ‘bioengineering’ did not cover food with genetic material that had been modified using techniques other than in vitro recombinant DNA techniques, whereas the more general term ‘genetic engineering’ reflected no such limitation, the AMS reasonably concluded that it should simply use the statutory term ‘bioengineered,’ which (by definition) accurately describes the technology that Congress intended to be disclosed.”

The panel also concluded the plaintiffs were “wrong in contending that the AMS did not adequately justify its rejection of the more common terms ‘GMO’ and ‘genetically engineered’ in favor of the statutory term ‘bioengineering.’ The AMS acknowledged that the former terms were more ‘familiar,’ but also noted that those terms potentially bore a meaning that was broader than the specific definition of ‘bioengineered.’ The agency further concluded that, to the extent that ‘bioengineered’ was less familiar, the proper response was for the AMS to ‘engage in outreach and education to provide information about the new disclosure term’ rather than to use a term that was freighted with a potentially different meaning,” the decision said.

The panel noted the district court agreed with plaintiffs that regulations concerning electronic or digital link or text message methods of disclosure “were unlawful under the APA and had to be remanded to the agency. The district court, however, expressly remanded those two regulations ‘without vacatur,’ and plaintiffs appeal that refusal to vacate these rules.”

The decision noted “the district court was persuaded by the concern that ‘vacatur would disrupt consumer access to bioengineering disclosures,’ but this unadorned comment fails to account for the Secretary’s own finding, which is well supported in the record, that the existing electronic or digital link option provides inadequate access to bioengineering disclosures.”

“Allowing an inadequate disclosure option to continue throughout the entirety of the administrative process for amending the regulations would itself perpetuate a disruption in ‘consumer access to bioengineering disclosures,’” the panel concluded.

In addition, the district court concluded “vacatur would disrupt the food industry,” which was already operating under, and in reliance on, the existing menu of options. “Plaintiffs contended this concern was without record support, but that is wrong: as Intervenors note, the administrative record confirms that tens of thousands of products were already being labeled with digital links as of 2018 and that number was expected to grow. Moreover, the administrative record also amply confirms the obvious point that changing labels is a logistically cumbersome task that takes time to accomplish,” the decision said.

“Although this disruptive concern is sufficiently supported in the record, the district court nonetheless abused its discretion in holding that this factor supported a complete denial of vacatur,” the panel said. “As plaintiffs correctly note, this concern would be fully addressed by ordering only a prospective vacatur of the two challenged provisions, e.g., by delaying the effective date of the vacatur or ‘setting a timeline’ for selling through any existing inventory of already-labeled products. But there is no basis in the record for concluding that this concern justifies a blanket allowance, for the entirety of the administrative process, to continue using disclosure options that have been found to be inadequate and unlawful,” the decision said. “Moreover, prospective vacatur would also mitigate, if not eliminate entirely, the district court’s related concern about disrupting consumer access to the bioengineering disclosure during the administrative process. Accordingly, we reverse the district court’s decision to deny vacatur of §66.106 and §66.108, and we remand with instructions to fashion an appropriate prospective vacatur of these rules after receiving input from the parties on that specific point,” the decision said.