Listeria Recall Toolkit
The FDA recently took the relatively unusual step of obtaining a court-issued warrant to seize all cheese products at Estrella Family Creamery, a small, family-owned artisan cheese maker in Washington State. According to the United States Attorney's Office for the Western District of Washington, "the FDA asked Estrella to recall all cheese products. The company refused." The FDA requested the recall after both products and the manufacturing environment at Estrella tested positive for Listeria. A copy of the FDA form 483 report immediately pre-dating the recall request is here.
As the Estrella situation illustrates, the FDA is not just focused on large-scale manufacturing. As the FDA and USDA move to more risk-based allocation of resources, they are increasingly concerned about smaller operations and retail. Below are issues any food manufacturer must tackle when it comes to Listeria (much of this also applies to other food-borne pathogens).
What is Listeria?
Listeria monocytogenes is a bacterium that causes listeriosis, which primarily affects persons of advanced age, pregnant women, newborns, and adults with weakened immune systems. Though it affects only a small portion of the population, Listeria is the most deadly food-borne pathogen in the United States, killing 20-30% of all those who become seriously ill.
What should you do if your product tests positive for Listeria?
Assemble your well-rehearsed crisis management team immediately if a product tests positive (or if a regulator believes that your product may be contaminated). Members of the crisis management team; food safety personnel; company executives; and representatives from accounting, legal, supply chain, sales and customer service all are essential in the decision making process below.
Can you trace back and isolate contamination?
Quality assurance and food safety personnel need to answer trace-back issues as soon as possible. Can you determine the source of the contamination? Is it limited to one lot or a single day of production? How often are production facilities sanitized? How often are production surfaces swabbed for Listeria? Does the production facility re-use contaminated product from shift to shift?
Will you have to issue a recall?
Both the FDA and USDA lack mandatory recall authority. Though, as Estrella learned, the agencies do have the bully pulpit and the ability to get a court order to seize products. Because of the high mortality rate, regulators (federal and state) take any positive Listeria test result in food products extremely seriously.
If the food is considered a ready-to-eat product (RTE), a positive Listeria test will almost invariably lead to the FDA or USDA requesting a class I recall.
Even for a non-RTE food, a positive Listeria test will lead to a requested recall. If the agencies believe that the cooking instructions are clear, are easily followed by consumers and, if followed, will kill the bacterium, then the recall may be considered class II.
A primary difference between class I and II is that the class I recall will result in much greater publicity. For FDA-regulated facilities, a class I recall also triggers reporting and notification requirements under the Reportable Food Registry (RFR).
What does the Reportable Food Registry require?
RFR requires FDA-registered facilities to report to the FDA portal within 24 hours when there is a "reasonable probability that an article of food will cause serious adverse health consequences." As part of the report, information must be submitted "one step back and one step forward" in the supply chain. Once a report is submitted, the FDA will promptly alert your customers of the "reasonable probability" that your product will result in "adverse health consequences or death." If suppliers and customers are also FDA facilities, the FDA will also pressure those companies to report to the portal.
The ticking of the RFR's 24-hour reporting deadline forces a company to make snap decisions that might affect its entire business. While RFR reports can be amended or withdrawn based on new information, in the world of food products, the bell can almost never be unrung. A more lengthy discussion of the RFR can be found here.
How do you marshal your case with the regulators?
Assuming that you have information showing that contamination is limited (or non-existent), how do you convince the regulators? The FDA and USDA’s concern is public health (and politics). The regulators’ concern is not for your business.
Providing information to the regulators in a manner they perceive as credible, prompt and transparent is critical. Once the regulators lose confidence in your company's credibility and competence, the game may be over. In most cases, the most effective way to marshal your evidence is a well-prepared and credentialed crisis management team (e.g., food safety, quality assurance, supply chain, accounting, sales, legal, media, etc.).
TerraChoice Issues Timely 2010 Greenwashing Report
Just a few weeks after the Federal Trade Commission unveiled its proposed new Green Guides for public comment, environmental consulting firm TerraChoice chimes in with its 2010 report, “Sins of Greenwashing – Home and Family Edition.” In our increasingly green economy, TerraChoice makes a couple unsurprising, if not disappointing, findings. First, using the same survey sample of 24 retailers located in Canada and the United States, TerraChoice found green claims on 4,744 products in 2010, compared to 2,739 in 2009. Clearly, the tidal wave of green marketing in our economy is still on the rise. Second, based on the “seven sins” of misleading green marketing claims defined by the firm, 95% of the green products it examined made some form of false or misleading environmental claim.
The TerraChoice report offers several other interesting insights. TerraChoice found that big box stores do a substantially better job than other retailers when it comes to putting more green products on the shelves, and big box stores do a better job of finding and selling products that are backed up with bona fide green claims. Another interesting finding addresses the problem of false and bogus green certification labels. TerraChoice notes that roughly a third of the greenwashing sins were based on false certifications. TerraChoice even found meaningless certification marks for sale on the internet, including one titled “Green – Certified Environmentally Conscious,” which TerraChoice claims can be licensed by any interested manufacturer or retailer for only $15.
TerraChoice has made a name for itself over the past few years issuing annual “Greenwashing” reports that identify false and misleading green claims on consumer products. TerraChoice is of course not a government agency, but it bases its “seven sins of greenwashing” on the FTC’s Green Guides, rules issued by the Competition Bureau of Canada, and the International Standards Organization (ISO) standard for environmental marketing, ISO Standard 14021. TerraChoice administrates the “Ecologo” program, which was originally developed by the Canadian government, and in August of this year the firm was acquired by Underwriters Laboratories, which offers its own “UL Environment” certification program.
TerraChoice is certainly not a disinterested party in the green labeling game. The organization has a financial interest in selling its consulting services and in the success of the Ecologo and UL Environment certification programs. Given this bias, it’s probably safe to say that not all of the products that TerraChoice finds guilty of greenwashing (95% of all reviewed products) could be successfully challenged by the FTC, state attorneys general, or consumers. That said, the 2010 report is a good indicator of the greenwashing problem that pervades environmental marketing today. More importantly, the efforts of TerraChoice, as well as regulators like the FTC and interested consumer groups, demonstrate that interested stakeholders take green marketing claims very seriously – unlike many other marketing messages, which are tolerated as mere “puffery.” The growth of green marketing claims may be rapid, but scrutiny and regulation of such claims appear to be catching up.
Front of Package Labeling Claims Survive Motion to Dismiss
A recent decision held that Front of Package (”FOP”) labeling claims may not (yet) be subject to federal preemption. The decision in a putative class action, Chacanaca v. The Quaker Oats Company, involves what has become a common fact pattern: The FDA says an issue is complex and subject to industry guidance and possibly rule-making (for example, use of the terms “natural,” “wholesome,” and “smart choices”), while a court says the issue may not be complex and may be perfectly within the expertise of the judiciary and jury system.
Federal District Court Judge Richard Seeborg of the Northern District of California dismissed plaintiffs’ state law claims targeting the “0 grams trans fat,” “good source,” “made with whole grain oats,” and “no high fructose corn syrup” declarations on preemption grounds. Yet, insofar as Quaker Oats "seeks a favorable judgment at this juncture on all state claims that focus on the term 'wholesome'; on images of children, nuts, or oats; or the 'smart choices made easy' language or decal," the court denied the motion to dismiss.
The plaintiffs’ challenges to Quaker Oats’ use of the term ”wholesome” and images of the children seem targeted exactly at the claims that were preempted: the trans-fat issue. The court concedes that the FDA has recently indicated its intent to explore rule-making in the area of FOP labeling claims and that the FDA already “has extensively regulated food labeling in the context of a labyrinthine regulatory scheme.” “Nonetheless,” according to the court, ”plaintiffs advance a relatively straightforward claim: they assert that defendant has violated FDA regulations and marketed a product that could mislead a reasonable consumer. As courts faced with state-law challenges in the food labeling arena have reasoned, this is a question ’courts are well-equipped to handle.’”
Are the plaintiffs’ claims really that straightforward? How is a court "well-equipped" to determine the meaning of ”wholesome,” ”natural,” or other FOP claims? Is a court able to fully consider comments and information from all corners of the food manufacturing world? Isn’t this really in the wheelhouse of the regulators (or possibly the legislators)? Can the food business in the United States function effectively with individual courts and states determining their own common law (or even statutory) rules for product labeling?
FTC Green Guides, Sustainability & Third Party Certification
Our previous blog entry discusses last week's release of the Federal Trade Commission's ("FTC") revised, proposed "Green Guides" generally, discussing how the FTC is focused on "deception" and is not taking a radical departure from the 1998 version (the last version) of the Green Guides. But under the new Guides what are the consequences of the FTC's position on sustainability and third-party certification, especially as it relates to food products? The bottom line is that marketers of sustainable food products should re-evaluate (1) what sustainability claims are made and (2) the benefits of proper third-party certification.
The FTC, in its commentary to the revised, proposed Green Guides, reports that it "is unable to provide specific advice on sustainable as an environmental marketing claim. Unlike other claims we tested, the term contains no cue alerting consumers that it refers to the environment."
Yet the FTC acknowledges that sellers of food (and non-food) products are using the term “sustainable,” and consumer awareness of sustainability issues is growing rapidly. The FTC seems to be leaving itself room for action against marketers of "sustainable" products if it’s clear that consumers are meant to believe that “sustainable” is an environmental marketing claim. And, as discussed in our previous entry, marketers need to be wary of compliance with not only the FTC but also state consumer protection laws, which often reach further than federal law on the marketing of food products.
FTC has also chosen for the first time to address in the Green Guides what it calls "Certifications and Seals of Approval." FTC makes clear that "It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third-party." And, even
"third-party certification does not eliminate a marketer’s obligation to ensure that it has
substantiation for all claims reasonably communicated by the certification."
Food manufacturers and retailers who use a seal or logo to designate sustainability should evaluate whether the seal or logo could be read by the FTC, a consumer or a plaintiff’s lawyer to imply third-party certification or endorsement. In other words, if independent third-party certification isn't used, you should ask yourself the following questions:
- Is it clear to anybody reading your label (FTC, consumers, plaintiffs, bar, etc.) that the claim is only your claim and not a third-party claim?
- Do you have substantiation (i.e., science) to back up any claims of environmental sustainability (whether yours or a third party’s)?
If you as a food manufacturer or seller can't answer both questions affirmatively, your marketing may be a liability. The SC Johnson Company, for example, is the subject of a consumer class action alleging that the company's own "greenlist" certification program was deceptive. Often, the realistic choice may be a) not to market the product as environmentally sustainable or b) to switch to a substantiated third-party certification.
For food, your best choice may be Food Alliance certification, which is now the most comprehensive certification for sustainable food and the gold standard.*
*In the interests of full disclosure, I serve on the non-profit Board of Directors for Food Alliance and am a staunch advocate of the organization.
New FTC "Green Guides" Are Out of the Gate
Following several years of development, and much anticipation in recent months, the Federal Trade Commission has finally released “Proposed, Revised Green Guides.” The new Green Guides will be open for public comment until December 10, 2010. Thereafter, according to the agency’s press release, the FTC will determine if and how to issue the new Guides.
The proposed, revised Green Guides are summarized here and published with substantial analysis and comment here; the FTC invites submissions of public comments here.
The current official Green Guides, last updated in 1998, provide non-binding “interpretations” of federal consumer protection laws, including Section 5 of the FTC Act (15 U.S.C. § 45), which is the law that empowers the agency to punish deceptive practices. In general, the Guides establish that false or deceptive environmental marketing claims can be challenged under the FTC Act. The Green Guides also provide instruction and interpretations of marketing buzz words that were popular in 1998, such as “biodegradable,” “compostable,” “recyclable,” “refillable,” and “ozone safe.”
The proposed new Green Guides address the terms found in the 1998 edition, but also address several new issues that arise in present-day green marketing, including:
- environmental seals of approval,
- “free-of” and “non-toxic” claims,
- carbon offsets,
- claims concerning renewable energy, and
- claims about renewable materials.
The proposed Green Guides reinforce and restate the FTC’s reasonable policy position that environmental marketing claims should be supported by credible scientific evidence. In addition, the proposed Guides expressly discourage sweeping unqualified claims. For example, the Guides explain that an unqualified claim that a product is “eco-friendly” is inherently deceptive. In contrast, a simple clarification – if it can be substantiated – may be acceptable. The proposed Guides state that a claim such as “eco-friendly: made with recycled materials” is not deceptive if the clarification is prominent, and can be proven.
For the most part, the proposed Green Guides do not represent a radical shift from the 1998 version of the Guides. And on a careful reading of the revised Guides and the preceding 186 pages of analysis and comment provided by the FTC, it’s clear that the fundamental issue is deception. It’s deceptive to say your product has 50% more recycled contents than it used to, when your product only increases recycled content from 2 to 3 percent. It’s deceptive to mark your product with your own green “seal of approval” and not disclose that you made up the seal yourself. It’s deceptive to claim that you’ll plant trees to offset carbon emissions from your products, when it will take 10 years for the trees to get big enough to actually offset those emissions.
Ultimately, it does not appear that the FTC is proposing a major shift in regulations. The key question for any environmental marketing claim remains: is the claim “deceptive” under Section 5 of the FTC Act? The bigger question is, how will enforcement change? Last February, The New York Times reported that the FTC has filed seven complaints concerning environmental marketing claims since President Obama took office (compared to zero during the prior administration). If enforcement remains at that level, there cannot be substantial application of the new Green Guides. Then again, given the rapid growth of environmental marketing claims in recent years, the FTC’s renewed interest in this subject, and the threat of state consumer fraud actions, it would be imprudent to disregard the new Guides.
Juicy Jurisprudence: FTC and POM Wonderful File Suits
Over the last several weeks, the Federal Trade Commission (the “FTC”) and POM Wonderful LLC (“POM”), the makers of POM Wonderful 100% Pomegranate Juice and POMx supplements, have been engaged in a battle over the scope of the FTC’s authority to regulate advertisements and the propriety of claims POM has made in marketing its products.
After initially being placed on the defensive by a warning letter from the Food and Drug Administration (the “FDA”) in February, POM has taken an offensive approach by suing the FTC for declaratory relief, asking that the FTC’s standard for non-deceptive advertising be held invalid. Further, POM has asked the Washington D.C. District Court to find that the FTC overstepped its authority in defining what constitutes “substantiation” of health-related claims in recent consent agreements with Nestle Healthcare Nutrition, Inc. and Iovate Health Sciences, Inc. In those cases, the FTC alleged that Nestle and Iovate had engaged in deceptive trade practices in contravention of the FTC Act by falsely advertising the health benefits of their various products. As we have blogged previously (here and here), POM has been fairly active in the past year in pursuing its legal remedies, the two prior instances being Lanham Act claims.
On September 27, the FTC responded, alleging in its suit against POM that the advertisements for the company’s 100% Pomegranate Juice and POMx supplements contain false and unsubstantiated claims regarding the ability of the products to treat or prevent heart disease, prostate cancer, and erectile dysfunction. Interestingly, the FTC has proposed a settlement to POM, with one of the conditions being that POM receive FDA approval for any advertisements that claim its product “cures, prevents, treats, or reduces the risk of any disease.” Thus far, POM has stood by its research behind its health claims, making this an interesting set of cases to follow moving forward.
The OchocincO's Misprint: This Wouldn't Happen with Flutie Flakes
There is a niche market out there for celebrity-endorsed food products that benefit charities. PLB Sports out of Pittsburgh appears to be a market leader in this niche, labeling products ranging from beef jerky to salsa to mustard with images and slogans relating to both individual sports figures and teams. Probably the most famous of these were Flutie Flakes, a breakfast cereal that supported an autism charity founded by Doug and Laurie Flutie in honor of their son. Usually, the product’s appeal—and its distribution—will be limited to the area where the team or athlete performs; Wayne Chrebet’s fans outside the New York area would have had to buy through PLB’s website.
Chad Ochocinco sponsored “OchocincO’s”, a honey nut toasted oat cereal, to benefit Feed the Children. Mr. Ochocinco, né Chad Johnson, is a flamboyant wide receiver for the Cincinnati Bengals, as renowned for his Twitter feed as his receiving prowess. His personal website will allow you to buy a t-shirt with the slogan, “That ain’t my baby.” He has 1.3 million followers on Twitter and 800,000 people “like” his Facebook page, which can garner over a thousand responses to him asking “what are y’all eating for lunch?” He does not lead a quiet life.
So in some ways it comes as no surprise that there was not just a misprint on the label of “OchocincO’s.” The problem apparently was a wrong toll-free prefix, which isn’t surprising since there are so many of them. Clearly someone, and not Mr. Ochocinco, failed to proof the copy on the box sufficiently before it was printed, the kind of mistake that happens every day. But this particular misprint would lead one, rather than to a number for more information about his selected charity, instead to a phone sex line. And the market for such cereals is of course young fans.
The boxes have been withdrawn from stores and the PLB website states that new boxes with the correct toll-free number will be printed. Presumably, PLB and the printer will settle whose fault the mistake was.
One imagines, though, that sales of OchcincO’s will soar because of the publicity from the mistake, greatly benefiting his charity. And somehow this just doesn’t seem like it would have happened with Flutie Flakes or David Eckstein’s Ecks’O’s.
