The plaintiffs in a five year old consumer class action against Frito-Lay North America and its parent company PepsiCo, Inc. got their wish earlier this month when Frito-Lay agreed to remove the “All Natural” label from its products containing genetically modified organisms (“GMOs”). In July 2012, a proposed class of consumers who purchased Tostitos tortilla chips, SunChips, and Fritos Bean Dip filed the suit against Frito-Lay under a variety of false labelling and consumer protection statutes. They claimed that because GMOs contain genetic material that has been “altered in a way that does not occur naturally, allowing the organism to exhibit traits that would not appear in nature,” Frito-Lay’s marketing of products containing GMOs as “All Natural” misleads consumers.

Frito-Lay recently agreed to remove “All Natural” labels from its products that contain GMO ingredients, and will not claim its products are “non-GMO” unless certified by an independent organization. It also agreed to pay up to $2.1 million in attorneys’ fees and costs, $215,000 to inform consumers about the settlement, and up to $5,000 to each of the named plaintiffs.  Two unnamed plaintiffs have filed objections to this settlement offer, and a final decision remains pending.

Takeaway: Although this settlement does not create enforceable law regarding GMOs and “all natural” labels, advertisers should be wary of false labelling suits arising from marketing products containing GMO ingredients as “all natural.”  Independent certification of non-GMO products may mitigate this risk.