The Nutrition Facts panel found on many food packages, that most of us have been scanning in grocery aisles for the past 20 years, is expected to undergo some significant changes starting this week. According to a recent press release from the U.S. Food and Drug Administration (FDA), the agency is planning to update the Nutrition Facts label based on the latest science-based nutrition recommendations.
Sources indicate that the changes may be announced as soon as this Thursday, when First Lady Michelle Obama is scheduled to speak at the fourth anniversary celebration of the “Let’s Move!” campaign. Bookmark this site for our report once the proposed Nutrition Facts changes are announced.
By way of background, the Nutrition Facts panel has allowed consumers to have consistent nutritional information and to make healthier choices, since passage of the Nutrition Labeling and Education Act of 1990 mandated nutrition labeling. In addition, throughout the years, mandatory nutrition labeling has encouraged many companies to change their ingredients to make the foods more healthful and thus more appealing to many consumers.
However, in light of new knowledge about nutrition and more evidence that people actually consult the labels of food packages, FDA officials believe it is time for an overhaul. Paula Trumbo, Ph.D., acting director of FDA’s nutrition programs staff explains that “updates are currently being assessed to address such factors as current nutrient recommendations, public health concerns based on recent data on food consumption, and the agency’s desire to make this information as clear and useful as possible.”
Our colleagues at the California Environmental Law Blog note the General Industrial Storm Water Permit is slated for adoption on April 1, 2014. Everyone in the California food industry from owners of feedlots to operators of manufacturing facilities will find this very important and should follow developments as Ryan Waterman and Missy Foster report on them.
While standing in front of a tractor at Michigan State University (the first land-grant university) on Friday, February 7, 2014, President Obama signed the long awaited $956 billion farm bill into law. The 2014 Farm Bill, what some have called a “jobs bill,” an “innovation bill,” a “research bill” and a “conservation bill,” passed in the House on January 29, 2014 with a vote of 251 to 166. The new five-year farm bill later advanced toward final passage on Tuesday, February 4, 2014 after a strong bipartisan Senate vote. According to FarmPolicy.com, “Lawmakers passed the sprawling legislation this week after four years of bitter arguments over farming subsidies and Republican efforts to reduce financing for food stamps. The final 950-page bill replaces direct crop payments with an insurance program and trims $8 billion from food stamps over the next decade.”
The farm bill is a massive piece of omnibus legislation that tends to make headlines every five to seven years when it is renewed by Congress. The first farm bill, the Agricultural Adjustment Act of 1933, was originally developed under President Franklin Delano Roosevelt’s New Deal as an emergency measure for farmers during the Great Depression to address plummeting commodity crop prices. During that time, the law essentially paid farmers to not grow food on a certain percentage of their land in order to prevent overproduction and balance supply and demand. In addition, the federal government bought and stored large quantities of grain in order to stabilize crop prices. The early law also included a nutrition program — the precursor for the supplemental nutrition assistance program (SNAP) — to feed the hungry.
Since then, agriculture in the U.S. as well as government policies concerning agriculture have changed dramatically. Yet despite these changes, the government continues to play a major role in managing risks within the agricultural industry. The modern day farm bill now addresses a wide variety of issues including nationwide hunger, rural broadband service, soil erosion, lack of credit and unfair export practices. For instance, the 2008 Farm Bill contained 15 distinct titles, including Commodities, Conservation, Trade, Nutrition, Rural Development, and Energy, among others.Continue Reading...
Alternative Product Labeling: Will "Simply" Changing Your Brand Protect Your Company From False Advertising Claims?
For the past few years, there has been a steady, if not increasing, stream of class action lawsuits filed against various food and beverage manufacturers and retailers alleging misbranding and false advertising due to the presence of “All Natural” claims. The companies sued in these cases range from major manufacturers and retailers to small private label suppliers. Typically, these consumer class actions typically allege that the products are falsely marketed as “natural” because they contain synthetic, artificial or processed ingredients. Products that bear an “All Natural” claim but contain ingredients anywhere from ascorbic acid (vitamin C) to zinc oxide have been challenged on false advertising grounds.
In light of the risk of litigation around the use of “All Natural” claims, some companies have begun reassessing statements and claims on their product labels and are taking a new approach to their marketing and advertising. One such company is PepsiCo. Recently, the company changed its “Simply Natural” line of Frito-Lay chips to just “Simply,” and its “Natural Quaker Granola” is now marketed as “Simply Quaker Granola.” Other large food companies, like Ben & Jerry’s, Breyers, and Campbell Soup Company, have also dropped the word “natural” from its new packaging.
However, replacing the word “natural” with a word like “simply” may not necessarily be a safe harbor. In 2003, the Center for Science in the Public Interest (CSPI) petitioned the Food and Drug Administration (FDA) to take regulatory action to prohibit The J.M. Smucker Company from making deceptive and misleading labeling claims that misrepresent the amount of fruit in Smucker’s “Simply 100% Fruit” spreadable fruit products. CSPI argued that the products contained more fruit syrup than fruit and that the syrups were actually made from apple and pineapple juice rather than the fruit named on the principal display panel.
In order to stave off litigation, food and beverage companies should carefully evaluate the claims of their product labels. For instance, is it worth the risk to use the work “natural” in product labeling and advertising? According to Stoel Rives attorney Melissa Jones, a trial lawyer who frequently counsels food and beverage companies faced with “All Natural” false advertising claims, it might not be. Melissa writes:
Although a few of the “All Natural” class action lawsuits have been dismissed at an early stage of the litigation, most courts have been unwilling to grant motions to dismiss entire cases and at least some of the claims usually proceed to further litigation or are resolved through settlement. The expense to companies that are sued in these cases is, not surprisingly, substantial, with settlements requiring payments of several million dollars.
That said, the alternative to “natural” labeling, such as the use of a word like “simply,” might not be litigation-proof either. Companies should conduct an intensive review of product ingredients to ensure compliance with labeling regulations and determine whether the ingredients and labeling claims are likely to result in an unwanted lawsuit.
I don't think we need a lot of scientific research to determine why people drink soy milk, almond milk and coconut milk. I'll save some time and list them, not in any particular order:
- They are lactose-intolerant
- They are living a vegan lifestyle
- They prefer the taste to cow's milk
- They prefer the nutritional profile to cow's milk
All four of these reasons have one thing in common: they depend on the consumer understanding that soy milk, almond milk and coconut milk are not cow's milk. So why on God's green earth did someone sue claiming that by labeling the products as soy milk, almond milk and coconut milk, they were confused into thinking the products contained cow's milk?
I will not cast aspersions, because I don't need to. U.S. District Judge Samuel Conti of the Northern District of California took care of this for me.
The case was Ang v. Whitewaves Food Co., and it involved two issues, one of which we won't get into at all: the question of whether evaporated cane juice is "sugar". The other was the claim that by labelling products as soy milk, almond milk and coconut milk, the producers of these products violated the "standard of identity" for milk. The problem is that the regulation they claim "defines" milk is not its standad of identity at all.
The regulation the point to, 21 CFR 131.110(a), provides, "Milk is the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows." But since we actually are capable of reasoning and using language in a non-mechanical way, we can readily understand that this is not the definition of "milk." This is a definition of milk, what you might call the default definition. When we say "milk" without an adjective, in a food context, we mean cow's milk. Milk in a dairy case that says only "milk" is assumed to be cow's milk, and indeed it had better be, or it is likely mislabeled.
But within the same set of regulations that include this definition are a whole bunch of definitions that make it clear that the FDA is not telling anyone that the word "milk" must only apply to cow's milk, despite the plaintiffs' contentions. For example, in the definition of "roquefort cheese", a cheese that cannot be made from cow's milk, the milk must be "of sheep origin", despite a cross-reference to a regulation that refers only to cow's milk.
The court, without looking at my little roquefort definition, reaches the same conclusion:
Moreover, it is simply implausible that a reasonable consumer would mistake a product like soymilk or almond milk with dairy milk from a cow. The first words in the products' names should be obvious enough to even the least discerning of consumers. And adopting Plaintiffs' position might lead to more confusion, not less, especially with respect to other non-dairy alternatives such as goat milk or sheep milk.
On that basis, the court found that the claims under state law were preempted, because federal law generally prohibits states from imposing labeling requirements inconsistent with federal regulations.
The court wasn't done with the plaintiffs, however. Even if not preempted, the court held, citing the famous Crunchberry case we blogged about here, the plaintiffs' claims were simply not plausible.
Plaintiffs essentially allege that a reasonable consumer would view the terms "soymilk" and "almond milk," disregard the first words in the names, and assume that the beverages came from cows. The claim stretches the bounds of credulity. Under Plaintiffs' logic, a reasonable consumer might also believe that veggie bacon contains pork, that flourless chocolate cake contains flour, or that e-books are made out of paper.
As I said at the outset, these products exist as a substitute for cow's milk for various reasons that give consumers a choice of beverage. No one seeks out these products assuming they are getting cow's milk; they seek them out because they are seeking alternatives to cow's milk. Judge Conti, who is a 91-year old senior U.S. District Judge appointed by Richard Nixon, deserves credit for so efficiently seeing through the plaintiffs' claims.
Following up on our recent post here on the FDA proposing that trans fats no longer be recognized as "generally accepted as safe" and the potential ensuing ban, I had the opportunity last week to speak with Colin O'Keefe of LXBN on the issue. In the brief interview, I share my thoughts on how the FDA arrived at this point and explain why I believe the industry is prepared for a move away from trans fats.
Last week, the U.S. Food and Drug Administration (FDA) announced in a Federal Register notice that it has made a preliminary determination that partially hydrogenated oils (PHOs), a major source of artificial trans fat in processed foods, are not generally recognized as safe (GRAS) for use in food. The November 7, 2013 notice includes the opening of a 60-day public comment period.
Under section 409 of the Federal Food, Drug, and Cosmetic Act, any substance intentionally added to food is a food additive subject to premarket approval and review by FDA, with some exceptions. The exceptions include substances “generally recognized as safe,” or GRAS, because they are generally recognized by experts qualified by scientific training and experience to evaluate its safety, as having been adequately shown through scientific procedures (or, in the case of a substance used in food prior to January 1, 1958, through either scientific procedures or experience based on common use in food) to be safe under the conditions of its intended use. PHOs, which are the primary dietary source of industrially-produced trans fat have a history of use as food ingredients and have long been considered GRAS ingredients by the food industry.Continue Reading...
Based on preliminary results from Tuesday’s election, it appears that Washington State’s hotly debated Initiative 522 (I-522) concerning the labeling of genetically-engineered foods has gone the way of California’s Proposition 37. Washington officials reported on Wednesday, November 6, 2013 that voters had rejected the measure, 54% to 46%. California’s similar labeling measure, Proposition 37, was rejected by California voters in November 2012.
County by county results show that certain counties in Washington including, King, Whatcom, and Jefferson, were largely in favor of passing I-522. However, the measure lost heavily in the southwest, central and eastern regions of the state.
If it had passed, I-522 would have required that any food offered for retail sale in Washington that was or may have been entirely or partly produced with genetic engineering to be labeled as follows:Continue Reading...
The FDA's final rule on gluten-free labeling was published in the Federal Register on August 5, 2013, with a mandatory date for compliance of one year thereafter, or August 5, 2014. But the FDA makes clear that this is an outside date. "However, as stated, FDA anticipates that manufacturers are likely to follow the requirements of the final rule as soon as possible." (emphasis supplied).
Imagine you're a consumer who suffers from the travails of celiac disease. Indeed, let's not imagine one, let's take a real one, a paralegal in my office who always orders the gluten-free option at our monthly lunches. Here's what she says is important about the rule:
As a celiac grocery shopper for the last three years, I was limited to the outside aisles. But now that food manufacturers are producing more gluten free products, I can once again shop in the once barren inner aisles. Clear, uniform rules on gluten free labeling are important. It means less time spent reading labels and less risk of a gluten reaction (usually lasting about 10 days). I can spend more time with family and friends and don’t have to worry about my reading glasses.
When she talks about "outside aisles", she means the meat, dairy and produce departments. The inner aisles are prepared and packaged foods. She's looking forward to shopping in the inner aisles again like everyone else.
Here's the deal: as the FDA knows, most of the goods that comply with the new rule (i.e., do not have wheat, rye or barley as an ingredient and contain less than 20 parts per million of gluten) are already known to be gluten-free to manufacturers. But right now, a "gluten-free" label does not need to be one that complies with the rule, yet a consumer like my paralegal has no way of knowing this until next August.
Why make her wait?
And wouldn't a manufacturer get serious bang for the buck by putting out, as soon as it can, a label that says, in essence, "Gluten-Free: Complies with new FDA Rule"?
And do it in big type, so she doesn't need her reading glasses. To quote a very wise man, "Make It So".
There is a concept in the law called puffery and it’s great.
I cannot prove that to you that it’s great, however, because a legal concept’s greatness or lack of greatness is something entirely personal. And that is an excellent introduction to the concept.
The case that brings up “puffery” is Viggiano v. Hansen Natural Corp., decided by the U.S. District Court for the Central District of California, which is in Los Angeles. Although the case covers a number of important issues, the one I want to focus on is the claim that labeling the soda at issue with the word “premium” breached an express warranty under Section 2-313 of the Uniform Commercial Code. The court described the claim as follows:
Viggiano also alleges that Hansen’s statement that the beverage is a “premium soda” is a warranty that has been breached because the soda has “less than premium ingredients [due to the] presence of sucralose and acesulfame potassium.”
The court would have none of it.
The term “premium,” however, is mere puffery; it has no concrete, discernable [sic] meaning in the diet soda context, and thus cannot give rise to a breach of warranty claim.
The court was almost entirely right. “Premium” clearly cannot give rise to a breach of warranty claim; it is not, as Section 2-313 requires, “An affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain . . . .” But it does have a “discernible” meaning and anyone reading this blog knows what that meaning is, instinctively. It means you’re going to pay a higher price. Why? Because the retailer, wholesaler and manufacturer all believe they can get you to pay a higher price. If they are right, you will pay the higher price whether there is any inherent extra value in the goods or not. If they are wrong, the price will be lowered. That is the unbending law of economics.
(Parenthetically, I think it's quite likely that Hansen's called its diet soda, and also its club soda, which is pictured here, "premium" is be because its main line of sodas is marketed as "Natural Cane Soda" because it uses cane sugar instead of HFCS and they needed a word to fit in the same position on the logo of the sodas that don't use sugar.)
But why do I think puffery is great? Because it helps leaven the conversation. It allows us to use poetry in advertising, not bureaucratic double-speak. And it stops unworthy lawsuits in their tracks.
Consider the world without puffery. I said we could never know that “puffery’ was “great”, but imagine if Kellogg’s could not have Tony the Tiger tell us that Frosted Flakes were "gr-r-reat!”
Or imagine the lawsuit when a flex-fuel train, running out of coal or diesel crossing the mountains, sues Good ‘n’ Plenty because their engine would not run on candy-coated licorice. I don’t want to live in that world.
We'll have plenty more about the FDA gluten-free labeling rule that came out Friday.
While I'm still digesting the 95 pages of the release, I wanted to point out something in the FDA's update that echoed what was in my last entry. In describing why the FDA chose 20 ppm as the level below which an item would be deemed "gluten-free", the FDA said,
This is the lowest level that can be consistently detected in foods using valid scientific analytical tools.
Well, exactly. We can't measure what we can't measure.
* But then again, I'm a lawyer.
In the fifth episode of "The Hitchhiker's Guide to the Galaxy", by Douglas Adams, Peter Jones played The Book. At one point, The Book gives some "helpful" information about the universe. First, that it is infinite. Next, it goes on to prove, through comical science and mathematics pulled out of Douglas Adams' unique brain, that the number of imports, exports, rainfall, population and monetary units in the universe is, in each case, "none."
My favorite is the explanation of why there is no population.
It is known that there is an infinite number of worlds, but that not every one is inhabited. Therefore, there must be a finite number of inhabited worlds. Any finite number divided by infinity is as near to nothing as makes no odds, so if every planet in the Universe had a population of zero then the population of the Universe must also be zero, and any people you may actually meet from time to time are merely the products of a deranged imagination.
Douglas Adams died in 2001, eons too early at the age of 49, but I am fairly certain he would have given a rueful chuckle to the case of Pardini v. Unilever US, Inc., decided by the United States District Court for the Northern District of California on July 9.
The case involved "I Can't Believe It's Not Butter! Spray". This is a product, as the court takes judicial notice, that is "dispensed via manual pump, with each pump delivering a squirt of oil."
According to the complaint, the first three listed ingredients are water, liquid soybean oil and sweet cream buttermilk, the latter of two presumably including fat. The plaintiff claimed that each bottle contains 771 calories and 82 grams of fat, making fat 24% of the product by weight. Nonetheless, both the packaging and the "Nutrition Facts" claim "0 Calories" and "0 Fat". Which plaintiff then claimed violated the Federal Food, Drug and Cosmetic Act, 21 USC § 301 et seq. So can a product that is nearly one-quarter fat legally claim no fat?
The key to this is serving size. The plaintiff claimed "that Defendant used unlawful serving sizes so that it could round down to zero ICBINBS's fat and calories per serving." The court, however, held that the serving sizes were lawful under FDA regulations, even though their effect is exactly what the plaintiff claimed. The plaintiff argued that the FDA recommended serving size for a spray is 0.25 grams but the serving size for this product is 0.20 grams. But one pump of the spray is in fact 0.20 grams. As the court said, "it would not make any sense for Defendant to list a serving size of 1.25 sprays (0.25 grams), since a consumer could not dispense a quarter of a spray." But even if 0.25 grams were used, "so long as the basic laws of physics apply, there is no possible way that 0.25 grams of any substance could have more than 0.5 grams of fat." (emphasis supplied)
The half a gram issue derives from the remarkably clear statement in 21 CFR § 101.9.(c)(2) defining what is to be disclosed on a label as to fat:
(2) "Fat, total" or "Total fat": A statement of the number of grams of total fat in a serving defined as total lipid fatty acids and expressed as triglycerides. Amounts shall be expressed to the nearest 0.5 (1/2) gram increment below 5 grams and to the nearest gram increment above 5 grams. If the serving contains less than 0.5 gram, the content shall be expressed as zero.
(emphasis, again, supplied)
In other words, Unilever not only was entitled to claim that its spray had zero grams of fat per serving, it was required to. As you contemplate the idea that a product that is nearly 25% fat by weight must, by law, make the claim that it has no fat, consider whether Douglas Adams had a gift for understatement.
Coauthored by Andrea Canfield and Claire Mitchell:
The Food Safety and Inspection Service (FSIS), the division of the U.S. Department of Agriculture (USDA) charged with regulating the safety and proper labeling of meat, poultry, and egg products, recently approved the Non-GMO Project Verified label claim for meat and liquid egg products. The label, certified by the Non-GMO Project, is intended to inform consumers that the animal was not raised on a diet that consists of genetically engineered ingredients, like corn, soy and alfalfa.
In October 2012, representatives from the Non-GMO Project, a third-party certifying organization, approached FSIS about potentially indicating on product labels under FSIS jurisdiction that the animals were fed diets without genetically engineered ingredients. USDA spokeswoman Cathy Cochran noted that FSIS “worked with the Non-GMO Project, three food companies, the Food and Drug Administration, and the Agricultural Marketing Service to be sure that the potential [non-GMO] label claims are truthful and not misleading to consumers.” According to Cochran, the agency took great care in vetting the Non-GMO Project’s standards, requirements and auditing processes before giving its approval.
Importantly, the approval of the Non-GMO Project Verified label does not necessarily signal a USDA policy shift with regard to non-GMO products. Cochran explained that FSIS allows companies to, “demonstrate on their labels that they meet a third-party certifying organization’s standards, provided that the third-party organization and the company can show that the claims are truthful, accurate and not misleading.” Cochran added that “[t]he agency…is not certifying that the labeled products are free of genetic engineering or genetic modifications.” Instead, the labels simply indicate that the products meet the standards of a third-party certifier regarding the use of non-GMO feed.Continue Reading...
Many of you may be familiar with the famous confection known as the Kinder Surprise or Kinder Egg, a toy-filled chocolate that is touted as the single largest children’s candy category in the world. The treat is manufactured by the Italian company Ferrero and has risen to nearly cult status in certain countries. Kinder Eggs are sold worldwide; however, U.S. consumers have likely only tried the confection while traveling abroad or through some other surreptitious means. The candy has been banned in the United States for decades.
This Spring, though, U.S. consumers might see something similar to the Kinder Egg in their Easter baskets. Kevin Gass, one of the founders of Candy Treasure LLC located in New Jersey, has developed a safe alternative to the Kinder Egg that meets the approval of both the U.S. Food and Drug Administration (FDA) and the Consumer Product Safety Commission (CPSC).
The FDA has long viewed the practice of intermingling confectionaries with trinkets with apprehension because of the potential choking hazard it presents. In fact, Section 402(d)(1) of the Federal Food, Drug, and Cosmetic Act expressly states that a confectionery is deemed to be adulterated “if it…has partially or completely imbedded therein any nonnutritive object,” unless the nonnutritive object has a functional value and would not be injurious to health.Continue Reading...
Social media has become a critical component of a company’s product marketing and promotion. However, based on FDA’s increased enforcement action around social media activity, it is a risk to be carefully considered.
The Food and Drug Administration (FDA) recently published a December 11, 2012 warning letter on its website that cited a dietary supplement company for its improper social media activity, among other things. Specifically, the warning letter explained that the supplement company’s “liking” of a consumer testimonial posted to its product Facebook page was a violative claim in that it established the product as a drug intended to cure, mitigate, treat, or prevent a disease. The FDA noted in its warning letter that the liking of the following March 10, 2011 Facebook post by the company constituted an impermissible disease claim:
“[Product]has done wonders for me. I take it intravenously 2x a week and it has helped me tremendously. It enabled me to keep cancer at bay without the use of chemo and radiation.”
The company has since removed this content from its Facebook page.
This is not the first time that FDA has scrutinized a company’s use of social media. In the past two years, over a dozen companies have been cited by FDA for making improper claims on the company or product Facebook page or Twitter account. However, this is the first time FDA has interpreted that a “like” implies endorsement of an unapproved claim.
There is some speculation that a crackdown on similar social media activities, such as “retweeting” a post on Twitter or “+1” on Google+, might be next on FDA’s agenda. In light of this regulatory risk, companies should ensure consider drafting formal social media policies and thoroughly vetting all social media marketing strategies to avoid enforcement action.
Among the ironies connected to New York's attempt to ban large cups of soda is the fact that the last time I was in the city, before the advent of 7-11 to its precincts, the one thing I really craved was a really large cup of Dr Pepper. When I visit New York, on business or for pleasure, I typically walk miles and miles, and on a hot day an icy cold cup of soda (I prefer the Diet) is what I need to refresh myself. I think I found one place that had it, but then again Dr Pepper is less common in the East.
A lot has been written about this ban both before and after a New York Supreme Court judge struck it down on Monday. Some of it has been fairly misleading and some of it has been relatively accurate. The case has nothing to do with equal protection under the U.S. Constitution, or indeed the U.S. Constitution at all. Rather, it was mainly decided based on an interpretation of a document that is, in its origins, older than the Constitution: the New York City Charter, a document that began in the reign of James II, the man for whom the city and state were named. Ultimately, the question was not so much the wisdom of the ban, but whether the Board of Health, a body appointed entirely by the Mayor without even City Council ratification, had the power to institute it, or whether that power was held by the City Council or the New York State Legislature, each of which had failed to pass similar legislation. Unless you are seriously concerned about the separation of powers doctrine under New York law (city or state), the vast majority of the case is of little interest and creates no precedent for what other jurisdictions may or may not do.
Much attention has been given to the judge's alternative ruling that the ban was "arbitrary and capricious" because it covered only some establishments and because it exempted certain drinks. The former of these is really a question of the authority of the Board of Health, which by a "memorandum of understanding" has ceded jurisdiction over grocery stores and convenience stores, as opposed to restaurants, to the state authorities. The court hints, however, that one problem with the ban is that that Board of Health did not seek, before imposing it, to coordinate with the state, which the MOU apparently required.
The latter can certainly be criticized. If you can get unlimited refills of a 16 ounce cup, have you accomplished anything? Some would argue that you have. Alcoholic beverages and milk-based beverages were exempt, which raises other issues. An article on the Bloomberg website, of all things, suggests that the result of the judge's action might be a broader ban. The director of the World Health Organization's Orwellian-sounding "Center on Public Health Law and Human Rights" argues that the ban was "legal and right." Mayor Bloomberg, not surprisingly, vows to succeed on appeal.
More interesting is the number of different ways in which New York restaurants had chosen to comply with the ban, and the cost of being required to be in a position to comply only to have the ban struck down just before it went into effect. 16 oz. cups were at a premium in the city before the ban was struck down; as the case goes through appeal, there will be more uncertainty about what those subject to the former ban may do, and if the mayor wins on appeal, how quickly they would have to comply with a reintroduced ban. While the organizations that challenged the law clearly had the right to do so, for many New York restaurant owners the real concern is certainty. They'd rather know what their duties are far in advance of having to implement them because they can't change their practices on a dime. This appeal doesn't do them any favors at all.
Earlier this year, the Food and Drug Administration (FDA) made some progress toward implementing the Food Safety Modernization Act (FSMA) by issuing two new proposed food safety rules. Specifically, the agency published proposed rules to establish standards for (1) growing, harvesting, packing, and holding of produce for human consumption (the “Produce Safety Rule”) and for (2) current good manufacturing practice and hazard analysis and risk-based preventive controls for human food (the “Preventive Controls for Human Food Rule”).
These two proposed rules are just the first step for establishing the framework for the modern food safety system called for by FSMA. Eventually, the FDA intends to release additional proposed rules addressing importer foreign supplier verification, preventive controls for animal food, and accreditation of third party auditors. A helpful overview of the proposed Produce Safety Rule and the Preventive Controls for Human Food Rule can be found here.
The FDA is currently in the process of soliciting comments on the proposed rules from industry stakeholders. The public may offer comments to the proposed rules over the course of the next several weeks. To facilitate that process FDA is planning to host two additional public meetings in Chicago, IL and Portland, OR in March. These meetings are the second and third in a series of public meetings announced in the January 31, 2013 Federal Register Notice and on FDA’s FSMA website. The first public meeting will be held February 28-March 1, 2013, at the U.S. Department of Agriculture in Washington, DC.Continue Reading...
After reviewing the voter petitions filed in support of Initiative 522 (I-522), the Washington Secretary of State’s Election Division announced last Friday that the measure received enough signatures and has been certified. The official certification was signed by Secretary of State Kim Wyman.
I-522, also known as “The People’s Right to Know Genetically Engineered Food Act,” concerns the labeling of genetically engineered foods. Similar to Proposition 37 that was recently rejected by California, I-522 would require most raw agricultural commodities, processed foods, seeds and seed stocks, if produced through genetic engineering, to be labeled as such when offered for retail sale.
Now that initiative has been certified, it will be forwarded to the Legislature. Legislators have three options on an initiative sent their way: (1) pass it into law as is; (2) take no action, resulting in it going to the November ballot for a public vote; or (3) send it and a legislative alternative to the ballot and let voters decide which, if either, they support. Lawmakers commonly take the second approach and pass the initiative along to the public for a vote.
Final updates for I-522 can be seen here.
We are pleased to announce that we have opened a satellite office in Washington, D.C. Our new address, effective immediately:
Stoel Rives LLP
1020 19th Street NW, Suite 375
Washington, DC 20036
Phone: (202) 398-1795 / Fax: (202) 621-6394
The new office is headed by firm partner Greg Jenner, a former Deputy Assistant Secretary of the U.S. Treasury for Tax Policy and Tax Counsel to the U.S. Senate Committee on Finance.
Click here to read the press release.
Last week on January 3, 2013, sponsors of Initiative 522 (I-522), a measure that would require the labeling of certain genetically engineered foods, filed their petitions with the Washington Secretary of State’s Office for review.
The filing of I-522 comes in the wake of Proposition 37, a similar initiative that was ultimately rejected by California voters in November 2012. If enacted, I-522 would require that any food offered for retail sale in Washington that is, or may have been, entirely or partly produced with genetic engineering to be labeled as follows:
- In the case of a raw agricultural commodity, the package offered for retail sale must clearly and conspicuously display the words “genetically engineered” on the front of the package, or where such a commodity is not separately packaged or labeled, the label appearing on the retail store shelf or bin where such a commodity is displayed for sale must display the words “genetically engineered;”
- In the case of any processed food, the front of the package of such food must clearly and conspicuously bear the words “partially produced with genetic engineering” or “may be partially produced with genetic engineering;” and
- In the case of any seed or seed stock, the seed or seed stock container, sales receipt or any other reference to identification, ownership, or possession, must state clearly and conspicuously that the seed is “genetically engineered” or “produced with genetic engineering.”
On January 4, 2013, exactly two years after the Food Safety Modernization Act (FSMA) was signed into law by President Obama, the Food and Drug Administration (FDA) published two new proposed food safety rules that will be available for public comment for the next 120 days.
The first rule on “Preventive Controls for Human Food” sets safety requirements for facilities that process, package or store food to be sold in the United States, whether produced at a foreign or domestic-based facility, for human consumption. A separate rule will be issued for animal food in the near future. The rule will require that food facilities implement “preventive controls,” a science-based set of measures intended to prevent foodborne illness similar to Hazard Analysis and Critical Control Points (HACCP) systems that are already required by FDA for juice and seafood processors. Each covered facility would be tasked with preparing and implementing a written food safety plan, which would include the following:
- Hazard analysis;
- Risk based preventive controls;
- Monitoring procedures;
- Corrective actions; verification; and
The FDA is also seeking public comment on a second proposed rule, which proposes enforceable safety standards for the production and harvesting of produce on farms.Continue Reading...
The Food and Drug Administration (FDA) has extended the deadline for food facilities to submit their registration until January 31, 2013.
Under the FDA Food Safety Modernization Act (FSMA), domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States are required to renew their facility registration by December 31, 2012, and every two years after that. FSMA directed that the food facility registration portal would be available starting on October 1, 2012.
However, FDA experienced a delay in implementing the biennial registration renewal for the 2012 cycle. As a result, the registration renewal portal did not become available until October 22, 2012. Food industry members requested that FDA extend the time to register in order to allow companies a full three-month window to complete the renewal requirement. In a new guidance document issued on December 12, 2012, FDA noted that it would exercise its enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013.
Failure to register a facility, renew the facility registration, or update required registration information can have serious consequences. For instance, the U.S. can bring a civil or criminal action in federal court against a company that handles food without a proper facility registration. In addition, if food being imported or offered for import into the U.S. is from a foreign facility for which registration has not been submitted, the food could be held at the port of entry and may not be delivered to the importer, owner, or consignee of the food until the foreign facility is registered with FDA.
The U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) issued a press release on Wednesday, December 5, 2012, announcing that companies producing raw ground chicken and turkey and similar products will be required to reassess their sanitation procedures and pathogen control plans over the next few months. Specifically, over the next 90 days, producers of raw ground chicken and turkey must conduct a thorough examination of its current Hazard Analysis and Critical Control Points (HACCP) to confirm its ability to identify hazards and better prevent foodborne illness. After the 90 day period, FSIS inspection program personnel will begin verifying that establishments that manufacture raw ground turkey or chicken products have indeed reassessed their HACCP plans.
FSIS will be documenting whether establishments made any changes to their HACCP plans in response to the required reassessment and will later evaluate those changes. Later, the agency intends to publish guidance materials for the industry on best practices to reduce Salmonella in ground and comminuted (further processed by mechanical separation or deboning and chopped, flaked, minced or broken down) poultry.Continue Reading...
This morning, the Food and Drug Administration (FDA) announced that as of 12:01AM this morning, the updated food facility registration system is now accepting food facility registration renewals. The renewal period was expected to open on October 1, 2012, however, FDA delayed the registration after receiving numerous requests from the Grocery Manufacturers Association and other trade associations seeking further guidance in meeting the registration requirements.
Registration renewal is a new requirement mandated by the Food Safety Modernization Act (FSMA). Originally, food facilities were required to register only once. The law now requires that food facilities re-register every 2 years with FDA, during the period beginning on October 1 and ending on December 31 in even numbered years. Even if a food facility is already registered with FDA, the facility is still obligated to renew registrations during the October 1-December 1 timeframe.
To register, update, or renew a registration, food facilities must submit the paper Form 3537 by mail or fax or register online at www.fda.gov/furls. FDA encourages online registration as the least costly, quickest, and most efficient means for food facility registration.
The Food Security Act of 1995 is part of a matryoshka of statutes. In the center is the general rule of 9-320(a) of the UCC, that a buyer in the ordinary course of business takes free of a security interest created by its seller. The next doll is the Farm Products Exception, which I wrote about here: except, most notably, in California, the buyer in the ordinary course rule does not apply to a buyer of farm products. The next doll is the Food Security Act itself: if you fail to comply with its terms, then the Farm Products Exception does not apply. Finally, if you do comply, then the Farm Products Exception does apply.
If that's not entirely clear, don't blame the messenger.
An interesting case out of the U.S. Bankruptcy Court for the Central District of Illinois asked this question: does the Food Security Act apply to proceeds? Here are the basic facts of CNH Capital America LLC v. Trainor Grain & Supply Co.: Both CNH and Trainor had financed crops for farmers named Printz, who are now in bankruptcy. CNH had the earlier filed financing statement. Trainor was also the grain elevator which bought the crops. CNH did not comply with the notice provisions of the Food Security Act. Trainor had therefore, there was no dispute, purchased the crops free and clear of CNH's lien. But what about the proceeds? Trainor simply offset them against its debt and paid nothing to the Printzes. Would it be able to walk away without paying, despite CNH's earlier filed financing statement?
Your ordinary buyer, when it pays for the crops, is concerned about double payment, which is why it will check the Food Security Act filings or notices of its seller. In essence, Trainor wasn't making any payment at all; no cash was changing hands. If it was wrong, it still had its debt. That probably isn't worth much without collateral and with the farmers in bankruptcy, but also, as a secured party, it was clearly in second position behind another creditor.
And that, in essence, is what the court held. The Food Security Act protects a buyer. If a secured creditor does not comply with its notice provisions (which, in some states like Idaho and Oregon, are essentially the same as for filing a financing statement, while in others, like Washington and, presumably, Illinois, involve actually sending notice to known prospective buyers of the farm products), then the buyer gets full title to the goods. But what it does not get is priority in proceeds as well.
Think of it this way: if there were no Farm Products Exception--the rule that applies to purchasers of every kind of goods except farm products--would a buyer who also had a second security interest be able to take the goods by setting off its debt against the interests of a first priority secured creditor? I think not, and that is what the court ruled here.
What if Trainor had paid the farmers and the farmers had turned around and paid Trainor in cash? Under 9-332 of the UCC, unless Trainor and the farmers had been in collusion, Trainor would, outside of bankruptcy, have taken good title to the funds. Of course, in bankruptcy, this was likely to be a preference and thus recoverable just as the setoff in the actual case was.
It seems like “delay” has become the word most often associated with the Food Safety Modernization Act (FSMA). Last next, we reported here on the Food Liability Law blog that starting on October 1, 2012, food facilities would be required to begin the biennial re-registration process in order to comply with the provisions of the FSMA. However, it looks like we may have spoken too soon.
On September 28, the Food and Drug Administration (FDA) posted the following on its website:
Biennial Registration Renewal for Food Facilities will not be available on October 1, 2012. We therefore will not be accepting food facility registration renewals at this time. Please check FDA’s website at http://www.access.fda.gov at a later date or sign up for FSMA updates to be informed when it becomes available.
FDA decided to delay the registration period mandated by FSMA after receiving numerous requests from the Grocery Manufacturers Association and other trade associations seeking further guidance in meeting the registration requirements.
As noted in our earlier post, FSMA now requires that food facilities re-register every 2 years with FDA. The law states that the registration period will begin on October 1 and end on December 31 during even numbered years.
At this time, FDA is recommending that food companies check the agency’s website to know when the registration renewal will become available.
Registration of food facilities with the U.S. Food and Drug Administration (FDA) has been a requirement for almost a decade. Since the passage of the Public Health Security and Bioterrorism Preparedness Response Act on June 12, 2002, facilities engaged in manufacturing, processing, packing, or holding food for consumption in the United States have been required to register with FDA in order to provide the agency with information on the origin and distribution of food and feed products, thereby aiding in the detection and quick response to actual or potential threats to the U.S. food supply.
Starting next week, however, all food facilities required to register with FDA must begin biennial re-registration to comply with the provisions of the Food Safety Modernization Act (FSMA). Signed into law on January 4, 2011, FSMA now requires that food facilities re-register every 2 years with FDA, during the period beginning on October 1 and ending on December 31 in even numbered years. The first registration renewal cycle under FSMA starts and Monday, October 1 and will continue until Monday, December 31, 2012. Even if a food facility is already registered with FDA, the facility is still obligated to renew registrations during the October 1-December 1 timeframe.Continue Reading...
Our colleague Claire Mitchell recently published an article in Guide to U.S. Food Labeling Law that describes how a California ballot initiative could be a game changer for food companies that use biotechnology in their food production process. Titled the California Right to Know Genetically Engineered Food Act, the initiative represents the state's first-ever ballot measure to require labeling of genetically engineered foods.
Claire describes the specific labeling requirements that would take effect on July 1, 2014, should voters approve Proposition 37. She also discusses the approach taken by the U.S. Food and Drug Administration on genetically engineered foods and the compliance challenge a new labeling requirement could pose for global food companies. You can read the full text of her article here.
On Tuesday, the U.S. Food and Drug Administration (FDA) announced that bisphenol A (BPA) is now formally banned from use in baby bottles and sippy cups. The announcement came as a surprise to some as the FDA had only just recently, on March 30, 2012, issued a decision to deny a petition by the Natural Resources Defense Council (NRDC) to ban the use of Bisphenol A (BPA) in all food and beverage packaging materials (see previous blog post on FDA’s denial here). The FDA explained in its denial letter that it appreciated the NRDC’s concern for consumer safety, and that it planned to continue to study the effects of BPA on human health.
Although the FDA is prohibiting the controversial chemical from baby bottles and sippy cups, the agency will continue to allow the presence of BPA in the packaging of other consumer goods. According to a statement by FDA spokesman Allen Curtis, “The agency continues to support the safety of BPA for use in products that hold food.” Rather than being based on safety, the FDA maintained that the ban is in response to the baby bottle industry’s voluntary phase out of the chemical over the last several years.
In related news, Washington State’s ban on the use of BPA in plastic sports bottles became effective last week. The ban is the result of a law passed in 2010 (RCW 70.280) prohibiting the sale of certain products containing BPA. Beginning in July 2011, manufacturers were banned from using BPA in bottles, cups and other containers for children under the age of 3. Now the law has been officially extended to prohibit the presence of BPA in sports bottles. A statement from the Washington State Department of Ecology explains that “[n]o sports bottles containing the chemical BPA can be made, sold or distributed in Washington as of July 1, 2012.” The ban will apply to all sports bottles up to 64 ounces. However, metals cans designed to hold or pack food will still be allowed to contain BPA.
Egg-associated illness caused by Salmonella has long been recognized as a serious public health problem. Specifically, Salmonella Enteritidis, a bacterium commonly found inside shell eggs that appear normal, continues to be one of the leading bacterial causes of foodborne illness in the United States. These eggs primarily become contaminated on the farm because of infection in the laying hens.
During the 1990s, the U.S. Food and Drug Administration (FDA) and U.S. Department of Agriculture implemented a series of post-egg production safety efforts such as refrigeration requirements designed to inhibit the growth of bacteria that may be in an egg. Those efforts, as well as egg quality assurance programs (EQAPs) and consumer and retailer education, contributed to a decrease in Salmonella Enteritidis illness during the mid-1990s. However, while these steps limited the growth of bacteria, they did not prevent the initial contamination from occurring. FDA and USDA officials became aware that further reductions in Salmonella Enteritidis illness could not be accomplished without additional federal measures addressing the contamination of shell eggs.Continue Reading...
The U.S. organic market has been growing steadily for the past several years. In fact, USDA reports that
[o]rganic farming has been one of the fastest growing segments of U.S. agriculture for over a decade. The U.S. had under a million acres of certified organic farmland when Congress passed the Organic Foods Production Act of 1990. By the time USDA implemented national organic standards in 2002, certified organic farmland had doubled, and doubled again between 2002 and 2005. Organic livestock sectors have grown even faster.
Additionally, organic products have gained increasing interest from U.S. consumers within the last decade. The word “organic” itself has become one of the frequently heard buzz words in the food and agriculture industries. More than just a buzz word, though, “organic” is also a clearly defined labeling term under the U.S. Department of Agriculture’s (USDA) National Organic Program (NOP). Organic labeling indicates that the food or other agricultural product has been produced through approved methods that integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.Continue Reading...
The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) is the primary agency charged with regulating the nation’s supply of meat, poultry, and egg products. Besides ensuring the safety and wholesomeness of those products, FSIS is also charged with the important function of reviewing the accuracy of all meat, poultry, and egg product labels.
Specifically, the Labeling and Program Delivery Division (LPDD) serves as the agency’s expert group on label review. The LPDD Staff examines all labels and labeling, including all forms of product identification, claims, net weight, species identification and nutrition related to meat, poultry, and egg products.Continue Reading...
In the conclusion to Aaron Bobrow-Strain’s White Bread: A Social History of the Store-Bought Loaf, he describes how he, a home bread baker, captures the microbes for his homemade sourdough. It’s not what we’d call hygienic, but it also apparently makes a delicious bread. Bobrow-Strain’s own behavior is really what tells you his conclusion: where bread is concerned, everything you’ve been told is wrong. Within limits.
Notwithstanding that its very title is a synonym for blandness, White Bread tells a compelling story in an accessible way. Over and over, we see how industry, government, science and the media gang up on their nemeses—home bakers and small-scale bakeries. Muckrakers warned of “disease-breeding bread” and a newspaper claimed, “Dough kneaded with the hands always runs the risk of contagion.” The result was the rise of industrially-baked bread, nearly all white bread.
Bobrow-Strain also tells the story of food evangelists like Sylvester Graham (namesake but probably not the inventor of the eponymous cracker) and how fortifying bread with vitamins was a factor in winning World War II. He reveals that much of America’s current industrial bread is actually owned by Grupo Bimbo, the Mexican baking conglomerate, which owns such iconic brands as Sara Lee, Arnold, Orowheat and Roman-Meal. He describes the counterculture’s push for whole wheat bread and how it has, with help from large-scale bakeries, overtaken white bread in the past few years for the first time.
The food liability takeaway here is nothing new, but a good reminder in a nice package: there is always a way to question conclusions from government or academia for their potential bias. If you are challenging a government mandate, find the bias and attack it. If you are on the side of the mandate, be ready for a challenge from the other side. The kind of research Bobrow-Strain has undertaken here is available on almost any government food mandate. Ignore it at your peril.
Recently, the U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) issued a notice announcing new procedures that it intends to implement when FSIS or other Federal or State agencies find a presumptive positive for Escherichia coli (E. coli) O157:H7 in raw ground beef. The impetus behind these new procedures was to improve the agency’s ability to trace contaminated food products in the supply chain, to act against contaminated foods sooner, and to better protect consumers from foodborne illness in meat and poultry products.
FSIS is proposing to launch traceback investigations sooner and pinpoint additional potentially contaminated product when the agency finds E. coli O157:H7 through its routine sampling program.Continue Reading...
Earlier this year, the U.S. Department of Agriculture (USDA) issued a press release indicating that the agency’s Food Safety and Inspection Service (FSIS) was proposing a new rule to modernize young chicken and turkey slaughter inspection.
Specifically, the rule intends to expand the use of the flexible, more efficient, fully integrated meat and poultry inspection system originally developed by FSIS in the late 1990s known as the HACCP Based Inspection Models Project, or HIMP. According to Alfred Almanza, Administrator of USDA’s FSIS, there have been 20 broiler plants under a HIMP pilot program since 1999. He explained that this 13-year-old study was undertaken to determine how best to modernize poultry inspection on a large scale. By expanding HIMP, FSIS aims to focus its inspection resources on the areas of the poultry production system that pose the greatest risk to food safety: the unseen threat of Salmonella and Campylobacter.Continue Reading...
A new U.S. Department of Agriculture Food Safety and Inspection (FSIS) rule, which was originally announced in a Federal Register notice published on December 29, 2010, will require nutrition labeling on the major cuts of single-ingredient, raw meat and poultry products and ground or chopped meat and poultry products unless one of several exemptions applies. This FSIS Final Rule recently went into effect in March 2012. Originally, the rule was to take effect on January 1 of this year; however, USDA officials delayed the effective date to allow the industry sufficient time to comply with the requirements.
The rule amends the Federal meat and poultry products inspection regulations, which previously required nutrition labels only on meat and poultry with added ingredients, such as marinade or stuffing. Under the new rule, packages of ground or chopped meat and poultry will be required to feature nutrition facts panels on their labels. In addition, whole, raw cuts of meat and poultry must now have nutrition facts panels either on their package labels or available for consumers at the point-of-purchase.
According to a press release from the FSIS:
The nutrition facts panels will include the number of calories and the grams of total fat and saturated fat a product contains. Additionally, any product that lists a lean percentage statement, such as “76% lean," on its label also will list its fat percentage, making it easier for consumers to understand the amounts of lean protein and fat in their purchase. The panels should provide consumers with sufficient information at the store to assess the nutrient content of the major cuts, enabling them to select meat and poultry products that fit into a healthy diet that meets their family’s or their individual needs.
Since the final rule was published, FSIS has posted the final point-of-purchase materials and examples of nutrition facts panels for ground or chopped products on its website. In addition, the Agency has conducted many other education and outreach activities to assist retailers and Federal establishments in complying with the requirements of the final rule, such as posting a PowerPoint presentation that gives an overview of the requirements of the final rule, presenting information at meetings, and responding to questions from industry stakeholders about the regulations through askFSIS at http://askfsis.custhelp.com/.
According to Undersecretary for Food Safety Dr. Elisabeth Hagen, the new FSIS requirements will allow consumers to make more informed choices about the food they purchase without having a significant effect on their wallets. It is estimated that implementation of these labeling requirements will add less than a half penny a pound to the cost of ground meat and poultry.
In following up from a previous Food Liability Law blog post that was recently published on Law360, the U.S. Food and Drug Administration (FDA) announced on Friday, March 30, 2012, that is was denying a petition by the Natural Resources Defense Council (NRDC) to ban the use of Bisphenol A (BPA) in food and beverage packaging materials.
The NRDC had filed a petition with the FDA in October 2008. The petition challenged the FDA’s position that exposure to BPA in low levels is safe, and accordingly, requested that the FDA ban the use of BPA as a food additive or in any substance that may become a component of a food product, as defined by the Federal Food, Drug and Cosmetic Act (FFDCA). Pursuant to a court order issued in December 2011, the FDA had until Saturday March 31, 2012 to issue a response to the NRDC’s petition.
The FDA explained in its denial letter that it appreciates the NRDC’s concern for consumer safety, and it will continue to broadly and comprehensively review scientific data regarding the effects of BPA on human health. In addition, the FDA plans to complete studies already in progress at the agency’s National Center for Toxicological Research (NCTR). The letter concluded:
FDA has determined, as a matter of science and regulatory policy, that the best course of action at this time is to continue our review and study of emerging data on BPA. . . . FDA is performing, monitoring, and reviewing new studies and data as they become available, and depending on the results, any of these studies or data could influence FDA's assessment and future regulatory decisions about BPA.
Douglas Karas, a spokesman for the FDA, stated, “I cannot stress enough that this is not a final safety determination on BPA.” He added, “This is a decision on the NRDC petition. The FDA denied the NRDC petition because it did not have the scientific data needed for the FDA to change current regulations, which allows the use of BPA in food packaging.”
Yet, despite the FDA’s decision to deny the NRDC’s petition, many major food companies have already begun using alternative packaging methods thereby eliminating BPA in order to quell public concern over the potential risks associated with the chemical.
Recently, on March 12, 2012, 55 Members of Congress sent a letter to the U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg calling on the agency to require the labeling of genetically engineered (GE) foods.
The bicameral, bipartisan letter led by Senator Barbara Boxer (D-CA) and Congressman Peter DeFazio (D-OR) was written in support of a legal petition filed by the Center for Food Safety (CFS) on behalf of the Just Label It campaign and its nearly 400 partner organizations and businesses; many health, consumer, environmental, and farming organizations, as well as food companies, are also signatories. Since CFS filed the labeling petition in October 2011, the public has submitted over 850,000 comments in support of labeling.
The letter comes as the most recent move in the longstanding and familiar debate over whether the U.S. should require labeling of GE foods. For years, proponents of labeling have emphasized that consumers have a right to know what is in their food and have expressed concern over the potential unintended consequences of consuming GE food products. On the other hand, opponents have maintained that the expense and difficulty of labeling GE food products would be prohibitive.Continue Reading...
The “All Natural” class action litigation in California has continued into 2012, as expected. The claims in California are being filed under California’s consumer-friendly unfair competition law (or UCL), which is codified in sections 17200 and 17500 of the California Business & Professions Code, and the Consumer Legal Remedies Act (CLRA).
Given the costs and risks associated with UCL and CLRA class actions, many companies are getting pro-active and are carefully analyzing their labels. The challenge for such companies, however, is that these lawsuits are not limited to labels that contain the words “All Natural.” They fall into several broad categories.
First, there has been litigation over products that are marketed as being healthy but contain allegedly unhealthy ingredients, such as trans fat, saturated fat, high-fructose corn syrup or sugar. Consumer protection class actions may also arise like a claim for a defective product-- where an otherwise healthy product experiences a manufacturing, packaging or storage deviation that takes its ingredients outside of the representations made on the label and subjects the manufacturer to litigation over “deceptive labeling” practices.
Second, there has been litigation over products that claim to be “All Natural” or “100% Natural” that allegedly contain GMOs or other synthetic or artificial ingredients. The types of ingredients that have been challenged by plaintiffs include:
ascorbic acid (vitamin C)
beta-carotene (vitamin A)
calcium pantothenate (vitamin B5)
folic acid (a B vitamin)
soy proteins (from hexane)
Of course, many of these ingredients are used frequently in products and there is no evidence that they are harmful. But given the California Supreme Court’s recent finding that “labels matter” (as opposed to product quality), plaintiffs are seizing on the opportunity to claim that something that has been processed or contains any “artificial” ingredient cannot possibly be “All Natural.”
Third, there has been litigation over claims about the quality of ingredients, such as “100% Pure” claims on orange juice or coconut water labels.
Finally, there has been litigation over products that have unsubstantiated health benefit claims, such as “proven to reduce cholesterol,” “supports digestion, . . . metabolism, . . .[and] liver function,” “supports immunity,” “reduces risk of chronic diseases,” “promotes healthy joints,” or otherwise.
In the current environment (with the lack of guidance from FDA and various court rulings that have struck down motions to dismiss), companies cannot afford to ignore the risk of litigation. The important thing for companies to take away from the morphing UCL class action litigation in California is that a cursory review of product labels is no longer enough to help ensure loss prevention. The product, whether labeled “All Natural” or not, should be reviewed carefully as the litigation theories in California broaden. Indeed, as noted above, many of the class action lawsuits in California involve claims other than “All Natural.” Companies should conduct an intensive review of product ingredients (and consider testing) to ensure compliance with labeling regulations and to assess whether the ingredients and labeling claims are likely to result in unwanted attraction from the plaintiffs’ bar.
Effective March 1, 2012, the FDA implemented an Interim Final Rule on the “Establishment, Maintenance, and Availability of Records” under the Food Safety Modernization Act, “FSMA”.
The FSMA statute among other new provisions, expanded the FDA’s authority to access and demand records from relating to the specific suspect article of food records, to include those relating to any other article of food that the FDA “reasonably believes is likely to be affected in a similar manner.” Although they are already in effect, the comment period for these rules is May 23, 2012. . These rules were not subject to the normal public review procedure because the FDA found that it was contrary to the public interest to delay them as the FSMA statute called for that access from its inception. The FDA has always indicated that” reasonable belief” determinations are made on a case by case basis because such decisions are fact-specific.
The expanded rule continues to reflect the requirement that records “must be made available as soon as possible, not to exceed 24 hours from the time of receipt of the official request, from an officer or employee only designated by the Secretary of Health and Human services who presents appropriate credentials and a written notice.”Continue Reading...
In follow up to previous articles, we note that a consumer group last week released a report that alleged that caramel colored sodas (Coke,Diet-Coke, Pepsi and Diet Pepsi) contain levels of 4-methylimidazole (4-MEI) that reached a level of 7 in a million cancer risk. The Center for Science in the Public Interest, claims that the carcinogen forms when ammonia or ammonia and sulfites are used to manufacture the caramel coloring that gives those sodas brown colors. In conjunction with their report the group requested that the Food and Drug Administration revoke its authorization for caramel colorings that contain 4-MEI, and in the interim to change the name of the additive to ammonia-sulfite process caramel coloring or chemically modified caramel coloring for labeling purposes.
Although according to industry experts the amount of soda that would trigger these effects is excessive, Coca Cola and Pepsi recently announced that they were changing their formulas, because of California's Prop 65 law that would require labeling if, as alleged, these products exceed the 1 in 100,000 risk that triggers labeling requirements.
As we noted earlier a sixty day notice has already been served on certain grocers with respect to similar products. The sixty day notice is the first step in the Prop 65 private enforcement process.
Bisphenol A (BPA) is an industrial chemical that has been present since the 1960s in plastic used in consumer products, including reusable water bottles, sippy cups, and baby bottles, to prevent cracking. BPA is also used in the protective lining inside metal-based food and beverage cans to avoid corrosion. In recent years BPA has become the focus of a heated debate. Citing an increasing body of scientific evidence, consumer and health advocates argue that there is a link between disruptions in the endocrine system and the consumption of products packaged with materials that include BPA. Certain studies have identified BPA as a risk factor in breast and prostate cancer, early puberty, childhood obesity, autism, and hyperactivity. Accordingly, critics of BPA believe it is a substance unfit for human consumption and have urged a ban on its use in food and beverage containers.Continue Reading...
Attorneys Lee N. Smith and Melissa A. Jones participated in the GMA 2012 Food Claims and Litigation Conference in Dana Point. Mr. Smith (his real name) spoke on the effect of the New Food Safety Modernization Act and its potential impact on litigation, and Ms. Jones (her real name) and Mr. Smith also presented an overview of Proposition 65 and recent developments with particular regard to food products.
How FSMA May effect Litigation
It was our premise that FSMA will affect litigation in two main areas. One related to the threshold standards under the statute, which have yet to be defined in detail by law or regulation and two, related to the potential increase in government actions under those standards and the commensurate increase in related plaintiff litigation.
The areas under FSMA that have similar thresholds are those that trigger recalls (Sec. 206) , reporting to the food registry (Sec. 211), deregistration (Sec 102), additional record review (Sec.101) and finally those that may trigger administrative detentions (Sec. 207). The first four sections are triggered by the reasonable probability standard, which is usually taken to be mean more than 50% or more probable than not; which is a low standard to trigger recalls or reporting. The other standard for detention is “A reason to believe” food is “adulterated or misbranded.” for administrative detentions." We believe that these standards will trigger litigation similar to the Del Monte Fresh litigation where industry challenged the FDA's lack of evidence available to require a detention and recall.
With respect to Prop 65 we discussed the Prop 65 listing process, and recent case law California Chamber of Commerce v. Schwarzenegger et al., 196 Cal. App 4th, 233 (2011) that supports listing that comes directly from listing made under the labor code.
We identified a recent preemption case that found that the regulation of poultry did not in fact pre-empt prop 65 (see Physicians Comm. for Responsible Med. v. McDonald’s Corp., 187 Cal. App. 4th 554 (2010) (federal Poultry Products Inspection Act did not preempt Prop 65 warnings) and discussed the naturally occurring defense under Prop 65 which is difficult and can costly to prove.
We also noted a recent sixty day notice for MEI; which was just listed last year. The chemical 4-MEI is a fermentation byproduct in certain food products including caramel coloring, soy sauce, Worcestershire sauce, wine and ammoniated molasses, as well as ammoniated livestock feed. The chemical is used in the manufacture of pharmaceuticals, photographic chemicals, dyes and pigments, cleaning and agricultural chemicals, and rubber. First Sixty Notice to grocers in Feb. 2012 as to carbonate soft drinks with caramel coloring.
We mentioned the recent listing of Sulphur Dioxide and the current dispute over safe levels. SO2 is a colorless, nonflammable gas with a pungent odor. As a component of ambient air pollution, SO2 is found in combination with sulfuric acid, sulfur trioxide, ozone, nitrogen dioxide, and particulates, and its presence in ambient air occurs primarily as a result of fossil fuel consumption at power generation and other industrial facilities
• Used in many food products as a preservative including on Cherries and Raisins.
• Should have been listed as an inhalant hazard only.
Please contact us if you have any questions.
United States House Representative, Frank Pallone, Jr. introduced H.R. 3984 on Wednesday that would set arsenic and lead limits in juice. The "Arsenic Prevention and Protection from Lead Exposure in Juice Act of 2012," otherwise known as the "APPLE Juice Act of 2012" is in direct response to Consumer Reports investigations. The investigative reports found levels of arsenic and lead exceeding federal drinking water standards in 10 percent of apple and grape juice samples tested in New Jersey, New York and Connecticut. The Act would require FDA to establish standards for the juices within two years.
For those of us in the California market, we can expect potential limits to be set, but how they match up to potential Proposition 65 warning levels and whether any preemption issues may be raised will remain to be seen.
The International Food Information Council’s expert panel, organized for the January 26, 2012 press webinar, found that acrylamide cannot be shown to pose any health risks. Acrylamide, which is also listed as a Prop 65 chemical was thought to be a carcinogen based on tests performed on rats at high doses. A study that included approximately 40 human epidemiological studies reviewed levels in food and none of which conclusively associated acrylamide with any increased heath risks.
Most notably, acrylamide is produced by browning or burning foods. It is also thought to be in coffee and many baked goods. Plant-based foods that are rich in carbohydrates may form acrylamide when baked, fried or roasted –French fries, potato chips, other fried and baked snack foods, coffee, roasted grain-based coffee substitutes, roasted asparagus, canned sweet potatoes and pumpkin, canned black olives, roasted nuts, prune juice, breakfast cereals, crackers, cookies, breads, and toast all may contain varying amounts of acrylamide. Foods that have been boiled or steamed do not contain acrylamide.
On December 8, 2011 I participated in a webinar organized by the Strafford Publication Group. In conjunction with Jonathan Cohen from the Gilbert firm and Joseph Bottiglieri with Bonner Kiernan Trebach & Crociata LLP, we presented Food Safety Claims: Products Liability Issues on the new requirements under the Food Safety Modernization Act.
Nicole Hancock of our Boise office and I will be presenting on Tuesday, January 10, 2012 a webinar on The FDA Food Safety Modernization Act – Part I on related topics including the relation of FSMA to feed and pet products. This webinar will be managed by the University of Idaho farm extension. David Atchison of the Leavitt Partners firm will also be presenting.
Amy Edwards and I will be speaking on January 16, 2012 at the Northwestern Food Processors Association Expo on protecting the attorney-client privilege and how that interaction relates to the new FSMA requirements.
Melissa Jones from our Sacramento office, and I will make a presentation on Proposition 65 and Food Safety litigation at the 2012 Food Claims & Litigation GMA Conference at Dana Point California in February 21-23, 2012.
FDA Creates The Food Safety Preventive Controls Alliance (FSPCA) To Develop Training Courses And Materials For Prevention Of Contamination
The U.S. Food and Drug Administration (FDA) in cooperation with the Illinois Institute of Technology’s Institute for Food Safety and Health (IIT IFSH) created the Food Safety Preventive Controls Alliance (FSPCA) to develop materials to will help the industry comply with the new preventive control rules.
The Alliance is composed of members from the FDA, loca and state food protection agencies, the food industry and academia.
Under the FSMA, facilities are required to develop food safety plans that evaluate food safety hazards and identify the preventive measures to guard against those hazards. Facilities must also monitor preventive measures and manufacturers must also develop a plan of action to correct any problems that are discovered.
The Alliance will develop training modules, to train the trainer, develop industry specific measures, assess the need for future research, and prioritize the need for specific controls.
The Alert, which is linked above, provides background information regarding "All Natural" class action litigation in California. It also discusses why the authors believe that class action litigation in this area will persist in 2012. Finally, the Alert concludes with suggestions for companies that have litigation risks regarding "All Natural" claims associated with their products.
I spent the last three weeks mainly in Europe, and mainly on a cruise, but unlike Newt Gingrich, I don't purport to have learned anything about Europe's debt crisis, although the Greek, Italian and Spanish governments did all fall the moment we left each country. What I did learn, or was reminded of, is that there is a very different way of thinking in Europe. Instead of blaring out instructions at the security line at the airport, there is just one discreet sign, and if you don't do it right you are admonished for not having read or comprehended the sign. To rebook our flights when we missed a connection due to fog, we were given the instruction to "Like" KLM on Facebook, without the further instruction to then post a message asking to be rebooked (that didn't work for me, by the way, after I finally figured it out).
So I read with some interest the various stories that have circulated around the Internet with titles like "EU Says Water is Not Healthy" and "Now barmy EU says you CAN'T claim drinking water stops dehydration." And this, of course, is to answer yesterday's pop quiz, which you'll recall asked if the following statement is true:
The regular consumption of significant amounts of water can reduce the risk of development of dehydration and of concomitant decrease of performance.
This was the question asked of a particular European Union agency with respect to a particular European Union law and the answer they gave was negative. Which of course set off a firestorm of laughter and ridicule, followed by a reverse firestorm of alleged common sense explanations for why the EU was right. With respect, pretty much everyone has exaggerated something here, intentionally or unintentionally.
First, let's parse the words a bit. The claim relates to "water" not "bottled water" or some particular brand of bottled water. The claim also states that "regular consumption" of water "can reduce" the development of dehydration, not that it is necessary for it, or that other beverages or water ingested in other ways are or are not another way to achieve it.
Now, let's affirm what the EU has done and not done. It has stated that in connection with a claim for foods within the EU, this claim is not authorized (20 days after publication in the official journal of the EU). It expressly states that it is "binding and directly applicable in all member states." Thus, the EU official who stated, as quoted in The Express as saying, "Either way the final decision is for member states", was saying something directly contradicted by the regulation's own words. A British bottled water seller has vowed to defy the ban and British health officials have not ruled out taking action against it.
Clearly, the EU has also not said water isn't good for you, or that it's bad for you, or anything of that sort. And there is some question as to whether the law the application was sent in under was the right one; is "dehydration" a disease or a condition, for instance? Yet even the most cogent defense of the ruling I've read, by a professor of nutritiion at Robert Gordon University in Aberdeen, takes liberties with the facts. I'm no nutritionist, and I'll accept that someone can live a perfectly healthy life without ever once ingesting water in its pure form (the comments on most of these articles include at least one person who suggests that beer is a fine substitute). I also accept that pure water alone may not solve all cases of dehydration. But the claim is not that drinking water as such is necessary, or that it is sufficient, but that it is useful. So when the professor, in defending the EU ruling, said, "Also, it could be used to imply that there is something special about bottled water which is not the case," he's simply wrong. If I say that Drug X may lower your cholesterol that doesn't imply that there is something about Drug X that is special compared to Drug Y which may also lower your cholesterol. The same is true of water.
You can't Google this and you can't refer to anything but your own common sense:
Is the following statement true or false?
The regular consumption of significant amounts of water can reduce the risk of development of dehydration and of concomitant decrease of performance.
I'll be back with the "answer" tomorrow.
The Department of Toxic Substances Control (DTSC) released new informal draft regulations whose stated purpose is: "to make safer consumer products ....widespread in California...[and].... provide more protection against toxic chemicals in products on store shelves, while creating market opportunities for industry."
The draft released on October 31, 2011, creates regulations identifying consumer products that contain toxic chemicals. The DTSC claims it will use a science-based process that requires the identification of toxic ingredients and the analysis of alternatives to that ingredient. Based on the results of the analysis, removal of the toxic ingredient and/or posting product information may take place.
The DTSC’s draft regulations encompassed the following:
1) The regulations establish a list of Chemicals of Concern (~3,000) based on the work already done by other authoritative organizations. The rules also allow DTSC to identify additional chemicals as Chemicals of Concern.
2) The regulations require DTSC to develop a list of “Priority Products” that contain Chemicals of Concern for which an alternative assessment must be conducted.
3) The regulations require responsible entities (manufacturers, importers, and retailers) to notify DTSC when their product is listed as a Priority Product. DTSC will post this information on its website. Manufacturers (or other responsible entities) for a product listed as a Priority Product must perform an alternatives assessment (AA) for the product and the Chemicals of Concern in the product to determine how to limit potential exposures or the level of potential adverse public health and environmental impacts posed by the Chemical of Concern in the product.
4) The regulations require DTSC to identify and impose regulatory responses to effectively limit potential adverse public health and/or environmental impacts posed by the Priority Product/Chemical of Concern (if the manufacturer decides to retain the Priority Product), or the potential adverse impacts posed by the alternative chemical/product selected to replace the Priority Product.
A prior proposed set of regulations were introduced in 2010, but additional time was required to refine the concepts. The version released in October greatly shortens timeframes, immediately establishes a list of chemicals of concern, and is intended to stimulate a change in the way products are created by incorporating impacts to health and the environment into the design phase. The regulations will be discussed by DTSC’s Green Ribbon Science Panel on November 14-15 in Sacramento.
Consumer class action plaintiffs remain very active in California, with cases continuing to be filed against food manufacturers and suppliers regarding alleged misleading labeling and marketing claims. Just this week, plaintiffs filed a class action lawsuit against Trader Joe’s alleging that it falsely advertised and sold cookies and apple juice as “All-Natural” even though the products contained synthetic ingredients. In the past few months alone, several other large companies have been sued over allegedly false “All Natural” claims in lawsuits involving ice cream, juice, granolas, energy bars, and cereal. In the same time period, other class actions have been filed in California regarding the marketing of products that are made from genetically modified plants and grains, such as cooking oil.
These actions are most commonly brought under California’s unfair competition law (referred to as the “UCL” or § 17200 of the California Business and Professions Code). The problem for companies sued under California’s UCL is that it is difficult to get claims dismissed at an early stage. Lawsuits frequently survive the pleading stage because claims are evaluated from a subjective, and not objective, standard. Cases are allowed to proceed even though only one plaintiff establishes standing to sue by showing they actually relied on a company’s statement. Finally, preemption defenses are frequently inapplicable.
Companies should get proactive in light of this litigation trend, which isn’t going away, and examine their labels to minimize the risk of litigation. Those that have been sued should consider creative ways to address these class actions by developing and preserving constitutional challenges. Despite recent California cases making it easier for plaintiffs to maintain their lawsuits at an early stage, aggressive discovery may prevent plaintiffs from certifying the proposed class.
In its latest step to increase the safety of the American food supply, the U.S. Food and Drug Administration (FDA) announced a Retail Food Safety Action Plan that includes several measures to help assure the safety of food sold in stores, restaurants, schools, and other foodservice operations. In support of the Action Plan, FDA also unveiled a cooperative agreement with the National Association of County and City Health Officials . FDA and the Association will promote the use of best practices by local authorities and attempt to increase retail food safety oversight as well as encourage the implementation of FDA’s Voluntary National Retail Food Regulatory Program Standards for retail food programs.
FDA today also released a Supplement to the 2009 FDA Food Code. The Food Code contains model food-safety regulations for retail and food-service operations including restaurants, schools and food stores. Local, authorities use the Food Code to develop food safety rules consistent with national regulatory policy.
Key changes contained in the new Supplement include:
- Requiring that food establishments have a certified food protection manager with the following additional requirements:
- that all operating procedures required by the Food Code are developed and implemented;
- that it can be verified that all employees are informed about their obligation to report certain health conditions that relate to transmission of food borne illness; and
- that any food the establishment receives after operating hours is delivered in a manner that does not create a food safety hazard;
- Requiring that food establishments have a plan for responding to and properly cleaning-up after an employee or other becomes physically ill in areas where food may be prepared, stored or served;
- Clarifying appropriate exceptions to the prohibition of bare hand contact with ready-to-eat foods prepared in the establishment;
- Clarifying the requirements for the safe storage and display of ground and whole-muscle meat and poultry;
- New requirements for devices used to generate chemical sanitizers on- site in the food establishment;
- Establishing clearer guidelines for the amount time a food establishment should be given to correct violations of different types of provisions in the Food Code.
The FDA confirmed this week that Listeria matching the strain that has caused health effects, was found on equipment and fruit at the Jensen Farms packing facility in Colorado.FDA Link..The recall that was announced on September 14 apparently actually began several days earlier and according to press reports included shutting down operations, the harvest and calling back trucks that were on the road. Four deaths out of 35 reported illnesses have occurred.
This recall brings into focus the new regulations that are to be promulgated by the FDA by January 2012 with respect to produce safety. Under Section 105 of FSMA the FDA is to establish standards for the safe production and harvesting of produce where the FDA has determined that standards would minimize the risk of serious adverse health consequences. FDA is required to publish a proposed rule on the minimum standards and publish updated Good Agricultural Practices by January of 2012. The standards are intended to include science-based minimum standards related to soil amendments, hygiene, packaging, temperature controls, nearby animals, water, and other hazards.
By this month, September 2011, the FDA is also expected to also publish a Notice of Proposed Rule Making which indentifies activities that constitute on -farm packing, holding, manufacturing and processing that will be subject to, or exempt from the Preventive Control Plan requirements under Section 103 of FSMA.
In the wake of recent recalls the progress of implementation of the Food Safety Modernization Act (FSMA) has become more significant. The Pilot Traceability Project was announced as of last week. This project is intended to provide a structure for tracing ingredients back to their source in the event of a recall. Section 204 of FSMA requires the FDA to “establish pilot projects in coordination with the food industry to explore and evaluate methods to rapidly and effectively identify recipients of food to prevent or mitigate a food borne illness outbreak and to address credible threats of serious adverse health consequences or death to humans or animals as a result of such food being adulterated …or misbranded."
The Pilot projects will be carried out by the Institute of Food Technologists (IFT) at the direction of FDA.
A product tracing system involves documenting the production and distribution chain so that a product can be traced back to a common source or forward through distribution channels if there’s evidence of contaminated food. The actions that follow may include removing the product from the marketplace and alerting the public if it has already been distributed.
The FDA indicated that: “What we’re looking for is a system that is practical, feasible, and rapid,” says Sherri McGarry, senior advisor in FDA’s Office of Foods. “Our No. 1 priority is protecting public health.”
McGarry explained that IFT will work with the key groups that have a stake in this endeavor—food industry, state and federal government agencies, and consumers—in developing the pilot programs. The goal is to include industries that represent the food supply chain, including farms, restaurants, and grocery stores.
The pilot programs will evaluate the types of data that are most needed for tracing, ways to connect the points in the food supply chain, and how quickly data can be made available to FDA. A key goal in the pilot projects will be to explore methods to track food and identify a common source or supplier starting at multiple points of sale. “We’re looking for a system that will allow FDA to quickly connect the dots along the food supply chain,” says McGarry.
Business should keep an on eye on this process as the resulting programs may impose similar requirements on FSMA registrants in the future.
On Monday, September 19, 2011, I will be speaking at The DEMATIC Material Handling and Logistics Conference in Salt Lake City , Utah and presenting, "Field to Fork: How the new Food Safety Modernization Act Will Affect You."
The Seattle Post-Intelligencer is just a website now, not an ink-and-paper newspaper, but I still read it for local news. My interest in doing so, however, was diminished somewhat when I saw this breathless headline:
I attended the American Cheese Society conference in Montreal earlier in the month. The conference was attended by cheese producers and suppliers from around the world. At the conference I presented a PowerPoint on Food Safety Modernization Act (FSMA) . There were several talks on Food Safety and clearly, the industry is concerned about the new provisions where cheese in particular has been identified as one of the high-risk foods that will be subject to some of the more stringent new regulations.
Because of the conferences’ location, FSMA’s features related to import and export certifications and foreign inspections were of particular interest (see below). It is clear that imported food will garner additional attention under FSMA. This is particularly true given accounts of food safety issues in China involving vinegar, meat and bread.
FSMA IMPORT REQUIREMENTS
1. The FDA has a stepped up their foreign facility inspection program to be carried out in a manner to be negotiated with the relevant foreign authority. If inspections are not allowed within 24 hours of the request, a ban on the importation from that facility is authorized.
2. FSMA contains a new section (sec. 808) that requires the FDA to create a system for the accreditation of third party auditors for certification of eligible foreign facilities. The certification in turn will be used for the Foreign Voluntary Qualified Importer Program (see below) to provide assurance for food imports and to target foreign inspection resources. There are express requirements for auditors and certifications set out in this statute.
3. The Foreign Supplier Verification Program (sec. 805) requires every United States importer to perform risk-based reviews of foreign suppliers to verify that the food they import is produced in compliance with the Food and Drug Administration (FDA) standards (produce and hazard analysis and preventive controls) and is not altered or misbranded. In January 2012, the FDA is required to issue regulations specifying the contents of the specific verification programs. Each importer is required to perform foreign supply verification activities which may include monitoring records, inspections or annual on site inspections. It may also require reviewing the hazard prevention programs for foreign suppliers, periodic sampling and testing of shipments.
4. The law has clarified the definition of inspection to include: An “importer,” for this program, is defined as the United States owner or consignee of the article of food at the time of entry of such articles into the United States, or, if there is no United States owner or consignee, the importer is defined as the United States agent or representative of a foreign owner or consignee of the article of food at the time of entry into the United States. (Note that FDA seafood and juice facilities subject to Hazard Analysis and Critical Control Points (HACCP) or low-acid canned food requirements are exempt.)
5. In January 2012, the FDA is required to issue a guidance document to assist importers in developing their foreign verification program.
6. Each importer is required to maintain records related to the Foreign Supplier Verification program for at least two years.
7. The FDA is required to maintain on its website a current list of the names, locations and other information deemed necessary by the importers in compliance with Section 2805 exemptions.
8. There is also a Foreign Voluntary Qualified Importer Program (FVQIP) (sec. 806) which requires the FDA to establish in consultation with the Department of Homeland Security a “voluntary” program to expedite movement of materials through the process. Under this program, an “importer” is defined as the person that brings food, or causes the food to be brought from a foreign country into the United States. This is an important distinction from the definition under FSVP because it could mean that foreign manufacturers may be allowed to participate in this program. The deciding factors will not be known until the final regulations are issued. FVQIP regulations are not required to be finalized by the U.S. FDA until July 2013. In July 2012, the FDA is required to issue a guidance document regarding participation, revocation, reinstatement compliance of the qualified importer program. To be eligible the importer must be importing food from its facility that has been certified by a third party auditor that year.
9. The FDA is authorized to require as a condition to granting admission to an article of food imported or offered for export to certification or such other assurances FDA deems appropriate.
In short, the following is the relevant time table:
|January 2011||Authority to require import certification.|
|July 2011||Require importers to notify the FDAof any country tot which food was denied access.|
|January 2012||FDA to publish guidance AND regulations for the Foreign Supplier Verification Program.|
|July 2012||Establish program for Voluntary Qualified Importer Program.|
|January 2013||Effective date for Foreign Supplier Verification Program.|
Sulfur dioxide was recently added as a Proposition 65 chemical that could require warnings to consumers and employees as a chemical that may cause reproductive effects. The listing of sulfur dioxide will be particularly troublesome because sulfur dioxide is used as a fumigant and preservative on a number of fruits, including grapes and in related food products, such as wine. Please see our recent blog entitled, "Sulfur Dioxide Added to Prop 65 Could Have Broad Range of Impacts" and California Grape and Fruit Tree League comments for additional information.
Fred Degnan, from King & Spalding, led a very insightful presentation on "Responding to Government Investigations and Warning Letters" at the recent ACI food regulatory summit. His presentation led to an interesting discussion about FDA's close out of investigations.
It was generally agreed that the FDA, in essence, is not notifying parties when it has decided to close out an investigation or take no further action. But, as another conference attendee pointed out, reinspection fees under FSMA section 107 may provide an opportunity to determine whether FDA has completed its investigation. If a facility is required to pay the FDA reinspection fees, it seems logical that FDA will have to inform the facility when it has closed the file and is no longer assessing fees. Whether this becomes reality has yet to be seen.
The FDA asserts in its inspection manual its right to photograph in your plant. Yet the FDA does not have statutory authority to photograph. The manual cites the following cases as authority for its right to photograph the inside of a plant: Dow Chem. Co. v. United States, 476 U.S. 227 (1986), and United States v. Acri Wholesale Grocery Co., 409 F. Supp. 529 (S.D. Iowa 1976). But these cases rely on the theory of implied consent or a minimal expectation of privacy. These cases do not hold that FDA has the right to photograph the interior of a food facility when the facility has a strict policy against photography and does not consent to the photography.
So, should you resist FDA's request to photograph?
The first thing you need to do is to ask yourself the following two questions:
- Do you have a policy against photography in your plant?
- If you do, is the policy strictly enforced?
If the answer to either question is no, then you're on shaky footing in resisting the FDA's request. By not having a policy or by not strictly enforcing the policy, FDA's legal authority based on implied consent is that much stronger.
Assuming your plant does have a no-photography policy that is strictly enforced, you need to assess whether the photography is worth the fight. It may be. Resisting the request for photos may be worthwhile to protect potential disclosure of trade secrets and to prevent out-of-context photographs from being used adversely by FDA. The problem is that the harder you push against FDA, the more likely that it will seek more information and the more likely that it will seek enforcement action.
In a future entry, we'll explore what legal remedies might be available to prevent the FDA from photographing the inside of your plant.
Next Wednesday at the ACI Food Regulatory Summit in Chicago I'll be presenting a talk entitled "Curtailing Downstream Liability Arising Out of On-Site Inspections: How to Prepare and What to Do Should Government Come Knocking." My slide-deck can be linked here.
Topics that I plan to cover include:
- FDA's plan to increase frequency of inspections and how it plans to do it
- How to be prepared for FDA's greatly expanded records access authority
- How to avoid new fees that will be imposed by FDA
- Developing an appropriate strategy to deal with FDA
- Preparing a privileged FDA inspection plan and training
More information about the ACI conference and registration can be found here.
The Food Safety Modernization Act ("FSMA") significantly expands the FDA's ability to access a food company’s records.
The expanded authority is found in three places in the statute:
- FSMA § 101 amends 31 USC § 350c(a) and allows the FDA to obtain records related not only to a product that the FDA believes "will cause serious adverse health consequences or death to humans or animals" but also those related to "any other article of food" that the FDA believes is "likely to be affected in a similar manner."
This statute may allow FDA to "access and copy" all records in any format and at any location of products that are not known to be contaminated but that might share similar ingredients or be produced in a shared facility or that could otherwise be affected in a "similar manner" as products thought to be contaminated.
Section 101 was effective immediately on FSMA becoming law in January 2011.
- FSMA § 103 requires that FDA facilities (with certain exceptions) implement "Hazard Analysis and Risk-Based Preventative Controls." As part of this section, Congress requires the affected FDA facilities to keep "records documenting the monitoring of the preventative controls" and to keep a "written plan that documents and describes the procedures used by the facility to comply with the requirements of this section." Congress requires that these records "be made promptly available" to the FDA upon "oral or written request." The statute also requires that records be kept for at least two years.
Note that unlike in section 101, Congress did not use the term "copy" in section 103. This section instead says that records must "be made promptly available."
The question remains open whether the FDA interprets "be made promptly available" to mean copy and whether such a broad interpretation will be held up by the courts. Section 103 is effective in July 2012.
- FSMA § 202 requires the FDA by January 2013 to create a "program for the testing of food by accredited laboratories." By July 2013, section 202 will require testing by an "owner or consignee (i) in response to a specific testing requirement under this Act or implementing regulations, when applied to address an identified or suspected food safety problem; and (ii) as required by the Secretary, as the Secretary deems appropriate, to address an identified or suspected food safety problem.“
Test results from the FDA-accredited lab "shall be sent directly to the [FDA]" unless exempted by regulation.
The big questions under section 202 are whether:
a. Routine product and environmental testing accomplished for the purpose of a food safety plan under section 103 will be considered "in response to a specific testing requirement . . . when applied to address an identified or suspected food safety problem" and
b. The FDA will exempt certain testing records under this provision.
So, what should you do to prepare for the FDA's considerable expansion of its ability to access your records?
Here are five things that a food company should consider:
- Understand what records the FDA does not have the right to access (recipes, financial, pricing, research, personnel or certain sales data), and maintain these separate from records the FDA can access.
- Create and enforce a document destruction policy that conforms with FSMA.
- Create a standard FOIA letter to present to the FDA when it requests letters explaining that it considers information provided to be trade secrets, confidential and proprietary.
- Create and train employees on a confidential FDA inspection policy that involves legal counsel and therefore can be cloaked in the attorney-client privilege.
- Understand what finished product and environmental testing is needed and not needed for a section 103 food safety plan.
Thank you to Parker Smith & Feek for inviting me to speak to about FSMA and how it’s changing the status quo. My slide-deck can be viewed here.
Following my talk, Marty Bask from Parker Smith & Feek led a very interesting discussion about the pros and cons of product recall and contamination coverage. A link to our recent discussion on this blog on what to ask when purchasing this kind of coverage is here.
I authored the following article that appeared in the April 29, 2011 issue of Food Chemical News:
As the clock ticks on the FDA’s 24-hour deadline to report to the FDA’s Reportable Food Registry, a food retailer, manufacturer or supplier is forced to make snap decisions that can profoundly impact business and litigation.
Once a report is submitted, the FDA promptly alerts customers and suppliers of the "reasonable probability" that the product will result in "adverse health consequences or death." Even if a recall has not yet been issued, an RFR report often has the consequences of a Class I recall. While RFR reports can be amended or withdrawn based on new information, in the world of food products, the bell almost never can be unrung, food companies are now painfully aware.
But some burning questions regarding FDA’s RFR remain for the food industry, including if and how the agency will:
(1) use the RFR as an enforcement tool;
(2) move toward the concept of "control" and away from "possession" in interpreting one of the key exceptions to the RFR;
(3) address what it perceives as "out of control" undeclared allergen problems; and
(4) use the information obtained through the RFR to shape coming regulations on required preventive controls.
Let’s take a stab at answering some of these questions and a few others.
Will FDA Use RFR as an Enforcement Tool?
The RFR was created by Congress as part of the Food and Drug Administration Amendments Act of 2007 and is codified at 21 U.S.C. §350f. The RFR requires that "as soon as practicable, but in no case later than 24 hours after a responsible party determines that an article of food is a reportable food, the responsible party shall  (A) submit a report to [FDA] ... and (B) investigate the cause of the adulteration if the adulteration of the article of food may have originated with the responsible party." 21 U.S.C. §350f(d)(1).
The reporting includes a "one step up and one step back" requirement. Food companies must identify their suppliers and customers to FDA through the web portal.
The FDA Food Safety Modernization Act (FSMA) tweaks the RFR and requires the FDA to promulgate new regulations requiring submission of "consumer-orientated information," including a description, product ID codes, contact information and anything else FDA deems necessary to enable consumers to accurately identify whether they are in possession of the reportable food.
The congressional intent behind the RFR is to provide the FDA with a mechanism to track patterns of adulterated product, essentially as an information gathering tool. Many in the industry fear that the FDA also will use the RFR as an enforcement tool. Even an unintentional failure to report in compliance with 21 U.S.C. §350f constitutes a criminal violation of the Food, Drug, and Cosmetic Act (FD&C Act).
It’s not clear if the FDA has initiated any enforcement action based on the RFR yet, but this should be monitored closely by the food industry.
Can You Take Advantage of Intra-Company Transfer Exception to Reporting Obligation?
21 U.S.C. § 350f(d)(2) provides an exception to the reporting obligation if:
The challenge with interpreting this exception centers on the term "transfer." The FDA's current draft guidance says: "A transfer to another person occurs when the responsible person releases the food to another person. 'Person' is defined in section 201(e) of the FD&C Act as including individuals, partnerships, corporations and associations. FDA does not consider an intra-company transfer in a vertically integrated company to be a 'transfer to another person,' where the company maintains continuous possession of the article of food."
The rub is that if the product is shipped to a third-party warehouse, but the responsible party maintains ownership and direct control over distribution, the product is reportable. The FDA’s draft guidance rationalizes that "'[p]erson is defined in section 201(e) of the FD&C Act (21 U.S.C. 321(e)) as including individuals, partnerships, corporations, and associations," and a "warehouse operator is a distinct legal person."
Another scenario under the 21 U.S.C. § 350f(d)(2) exception that is not addressed by the FDA's draft guidance arises if the product is subject to an intra-company transfer but the company uses a common carrier to transport the product. Under the FDA's rationale that use of a third-party warehouse takes a company out of the exception, a common carrier also could be considered a "distinct legal person" to which the product is transferred, eliminating the exception and requiring the company to report.
Many believe that the FDA (and the statute) could not intend that an otherwise unreportable food under 21 U.S.C. §350f(d)(2) become reportable for no reason other than that a company uses a third-party trucking company in an intra-company transfer. Many also question whether the FDA's current position on third-party warehouses is correct if the food company retains complete control over the product.
Neither of these policies reflects the reality of how many food companies operate. From a food safety policy perspective, many believe that food companies should not be forced into the business of trucking and warehousing.
Some believe that the FDA might be moving away from interpreting "transfer" through the lens of possession and broadening its view toward an interpretation based on issues of control. Control might reflect more accurately the reality of food production and promote more effectively food safety and the intent of the RFR. Whether the FDA will move toward a notion of control should be revealed in the FDA's expected amendments to its draft guidance and should be monitored closely by the industry.
In January 2011, the FDA issued its first annual report on the RFR, which provides statistics on the first full year of the RFR (2,240 entries, 229 "primary reports," a breakdown by hazards, etc.) (see FCN Jan. 28, Page 8). Beyond the statistics, companies should take particular note of the FDA’s focus on both allergen controls and creation of food safety plans.
The FDA reported that undeclared allergens/intolerances accounted for 34.9% of its primary reports. Industry experts assert that the FDA believes that the industry does not have good control over the issue of undeclared allergens. These experts believe that the FDA will give special attention to this issue in promulgating regulations under the FSMA's requirements for hazard analysis and preventive controls. In anticipation, manufacturers should consider now how they can change manufacturing processes to address the undeclared allergen issue.
Do You Have A Food Safety Plan? If So, Will It Be Sufficient Under FSMA?
In FDA’s report on its RFR results , FDA Deputy Commissioner for Foods Michael Taylor says “[s]everal key U.S. industries are already re-evaluating their hazard and preventive controls, core principles of the Food Safety Modernization Act recently passed by Congress. We also anticipate improved reporting as we continue our vigorous outreach to food facilities through federal, state, local and foreign agencies, to help us expand the positive effect of the RFR on the safety of the U.S. food supply.”
The RFR will be a guide for the FDA in risk assessment and writing regulations for preventive controls and what companies must include in their food safety plans. The new hazard analysis and preventive controls requirements in FSMA are not required to go into effect until July 4, 2012, 18 months from the date of enactment.
Deputy Commissioner Taylor's comments suggest that industry standards already might be moving in the same direction. To mitigate the risk of FDA enforcement actions, product liability claims, supply chain contract claims and recalls, food manufacturers should anticipate the FDA's eventual rule making, and update or create food safety plans that address the hazard analysis and preventive controls prescribed by the FSMA. One way to anticipate FDA's direction is to mine the information FDA has collected (and continues to collect) as part of the RFR.
(A) the adulteration originated with the responsible party;
(B) the responsible party detected the adulteration prior to any transfer to another person of such article of food; and
(C) the responsible party –
(i) corrected such adulteration; or
(ii) destroyed or caused the destruction of such article of food.
A 60-minute webinar broadcast on April 29 on the Food Safety Modernization Act (and a short discussion of implications of the Japanese earthquake, tsunami and resulting nuclear disaster on food safety) is available for replay at this link. The webinar was sponsored by AON. My gratitude to AON for inviting me to participate. As always, I'm interested in your feedback and questions.
Here is a link to my article, "FDA's Reportable Food Registry Profoundly Impacts Litigation and the Food Industry," posted this week by the American Bar Association's Litigation Section (Products Liability). The article is a follow-on to lively discussions over the litigation impacts of the federal Reportable Food Registry ("RFR") at the ABA’s recent Food & Supplements CLE at Coca-Cola World Headquarters in Atlanta. The RFR was created by Congress as part of the Food and Drug Administration ("FDA") Amendments Act of 2007 and requires that a company submit a report to the FDA within 24 hours of discovering reportable adulterated food.
Two hot-button issues discussed at the ABA CLE (and in the ABA article) were whether the FDA (1) intends to use the RFR as an enforcement as well as an informational tool, and (2) will move toward the concept of "control" and away from "possession" in interpreting one of the key exceptions to the reporting requirement.
I’ll be speaking at several events over the next two months on the Food Safety Modernization Act (FSMA) and how this comprehensive and far reaching legislation affects the status quo for food companies. Two of these events are free, and all promise to address relevant and critical issues for those involved in the food industry.
a. May 24 at Parker Smith Feek's offices in Bellevue for a discussion of the new FSMA, the Reportable Food Registry and how to survive a food product recall (event was rescheduled from March 22). Registration is free and coming soon. Contact me if you’re interested and I’ll get a spot reserved.
b. April 29 webinar sponsored by AON on FSMA. Link to the free registration is here.
c. May 12-14 Northwest Food Processors Association’s Executive Business Retreat in Coeur d'Alene, Idaho.
d. June 15-16 ACI Food Safety Regulatory Compliance Summit in Chicago. I'll be speaking specifically on "Curtailing Downstream Liability Arising Out of On-Site Inspections: How to Prepare and What to Do Should the Government Come Knocking." If you register by April 15, I can arrange for a discount. Just let me know.
If you can't make these events or would like a customized in-house presentation on FSMA, the Reportable Food Registry, recalls or other food liability topics, please let me know. Also, stay tuned for new blog entries addressing such topics as the Reportable Food Registry (RFR), restaurant menu labeling, and strategies to defeat food marketing/labeling putative class claims.
Stoel Rives attorney Jay Eckhardt will give a presentation on April 21 addressing the proposed new FTC Green Guides. The presentation will focus on new FTC guidance and interpretations concerning renewable energy claims and carbon offset claims, as well as claims concerning renewable materials, and the use of green seals and certifications. Going beyond the Guides - the presentation will also review the broader enforcement environment. The program is sponsored by the Sustainble Future and Antitust & Trade Regulation Sections of the Oregon State Bar, and the Green Business Initiative at the University of Oregon School of Law.
For event details and logistics, click here. Admission to the live event in downtown Portland, Oregon is free. A telephone number and passcode will be provided for attendees unable to attend in person.
For more information on reguation of environmental marketing, see the Stoel Rives Green Guides Resource Page.
The Napa County Farm Bureau held its first water forum in five or six years on March 9, in St. Helena, California. Kicked off by Bureau President Jim Lincoln, the event was well attended, with over 100 concerned stakeholders listening to the most recent updates in California water issues.
Phillip Miller, the Deputy Director of Napa County Public Works, discussed a recent study by the County designed to compile countywide data, establish a framework for reporting, and provide recommendations related to any future groundwater permitting and monitoring program.
Of most interest was the presentation by Paula Whealen, a principal at the engineering firm of Wagner & Bonsignore. Ms. Whealen gave a general overview of new requirements for surface water users from the California State Water Resources Control Board (“SWRCB”), including:
- All reports of licensees and progress reports by permittees and pre-1914 water right diverters are now due annually by July 1;
- Reports must provide the monthly amount taken from the source;
- They must state the monthly amount beneficially used;
- They must be filed electronically as of this year; and
- Filings will require high-speed internet access.
Because all new reports must be filed electronically, the prior “fudge factor” regarding timelines for reporting will no longer exist. The SWRCB will be able to tell on July 2 who hasn’t filed the necessary reports. Failure to file all necessary reports constitutes non-compliance with the underlying water license/permit and can lead to fines and/or other administrative actions. It was also stated that, given the increase in the number of enforcement officers (25) and the establishment of a water rights enforcement office in Santa Rosa, California, there will be a significant increase in site inspections in the North Coast region.
A bit of sage advice to be taken from the Forum is for all vineyard and winery owners operating under a license/permit to take it out, read it, and understand it. If you don’t understand your water right permit, find someone who does, and most importantly, make sure you are in compliance. In addition, even for those sources that are not required to be reported (i.e., reclaimed water), it behooves vineyards and wineries to keep records of all water that is used on the property.
The primary issues raised in Rep. Welch’s letter related to potential customer confusion due to the similar packaging and frequently close shelf placement of the Log Cabin “All Natural Syrup” line and maple syrups from Vermont producers. Below are pictures of a “Vermont Pure Maple Syrup” package and the Log Cabin package. We at the Food Liability Law Blog would love to hear from readers what you think – Is the Log Cabin Package misleading or confusing? Is it problematic for the two products to sit on the same supermarket shelf? What does the wording “All Natural” on the Log Cabin package convey to you?
Note: The following post is authored by guest blogger Anne Glazer.
The Trademark Trial and Appeal Board (“TTAB”) recently affirmed a USPTO refusal to register the following mark for use with beef:
The TTAB said the BRASSTOWN BEEF logo is likely to cause confusion in relation to the word mark RAISED RIGHT, which was already registered for use with poultry, meat and game. It didn’t help that the words “RAISED RIGHT” appear across the top of the BRASSTOWN BEEF logo.
This is yet another case that shows the importance of doing careful trademark clearance work before adopting a new mark or trying to register it.
Thanks to The TTABlog® for reporting this decision. In re Ridgefield Farm LLC, Serial No. 77758560 (February 25, 2011) [not precedential].
The Industry Acrylamide Coalition (Coalition) filed suit against the State of California Office of Environmental Health Hazard Assessment (OEHHA), the agency that manages and revised the Prop 65 list to include 4-metheylimidazole (4-MEI), as a carcinogen. 4-MEI is often found in cooked foods. The Coalition argues that the third party report on which the listing was based, from the National Toxicity Program (NTP), is insufficient to support a valid Prop 65 listing. The complaint, which was filed in Sacramento, alleges that OEHHA failed to consider the entire file of evidence before making its decision. The Coalition’s complaint also indicates that 4-MEI is created during normal cooking of food and ingredients and cannot easily be removed. The Coalition includes the American Beverage Association, the California League of Food Processors, and the Grocery Manufacturers Association of USA.
Acrylamide – In Your Coffee?
In a similar manner, the National Coffee Association is coordinating the joint defense of a number of coffee roasters and retailers with respect to a 60-day notice served on 40 roasters. The chemical at issue is acrylamide, which is formed when certain proteins are heated. Original scrutiny for this chemical concentrated on potato products such as french fries, but apparently the same chemical reaction occurs in coffee when it is roasted. In addition, other beverages that also contain caffeine, such as soft and energy drinks, have also received 60-day notices.
Dietary Supplements and Prop. 65
A dietary supplement company has been ordered to pay 2.65 million as part of a joint settlement with district attorneys in California. This is one of the larger suits filed and settled by a public enforcement entity, other than the California Attorney General. People v. Irwin Naturals, Inc., Orange County Superior Court, Case No. 30-2011-00445453.
Irwin Naturals was alleged to have made false and misleading representations with respect to the marketing and sales of its products. The products were advertised as having Hoodia Gordonii, an alleged appetite suppressant; however, lab results found that the chemical was not present and triggered a mislabeling suit. Additionally, the suit alleged that many of the products also exceeded the Prop. 65 level of proposed Maximum Allowable Dose Level (“MADL”) of .5 micrograms/dA1. Most of the indicated products were green tea products, sold without the Prop. 65 warning as required.
As part of the settlement, 1.95M in penalties were paid to help enforce state consumer protection laws, $100,000 in restitution, and $600,000 in set aside for investigation costs. Reportedly, prosecutors felt that this prosecution was necessary in part because the FDA does not regulate dietary supplements.
Earlier this week, I presented a webinar to the American Cheese Society entitled the "Food Safety Modernization Act and Product Liability." A link to the presentation is here. The presentation covered a number of topics and included a discussion of the so-called "Tester Amendment" to FSMA.
The "Tester Amendment" in section 103 of FSMA "exempts" from the hazard analysis and risk-based preventative controls requirements in section 103 certain "Qualified Facilities." To be a "Qualified Facility" you have to either (1) be a "Very Small Business" or (2) have "Limited Annual Monetary Value of Sales."
FSMA leaves it to FDA to define by regulation a "Very Small Business," so we have little guidance now on what this means.
FSMA does define what it means to have "Limited Annual Monetary Value of Sales":
a. You have average annual sales (over three years) of less than $500,000 (adjusted for inflation); and
b. Your sales to "Qualified End Users" exceed sales to others.
"Qualified End Users" mean consumers or restaurants/retailers located in the same state or within 275 miles from your facility who are selling directly to consumers.
BUT even if you qualify for the exemption to the hazard analysis and risk-based preventative controls, understand that it is not truly an exemption. Even qualified facilities will still have to provide documentation to FDA that either:
a. demonstrates you have “identified potential hazards associated with the food being produced” and “implementing” and “monitoring” preventative controls; or
b. “as specified” by FDA shows compliance with “State, local, county, or other applicable non-Federal food safety law.
A "Qualified Facility" also must provide to FDA “Documentation, as specified by FDA in a guidance document that the facility is a qualified facility.”
Hazard analysis and risk-based preventative controls provision of section 103 of FSMA will become effective in June 2012 irregardless of whether FDA completes its rule-making process.
On February 24, 2011, Lee Smith and I presented "How Regulatory Changes Affect Litigation Risks" to the Grocery Manufacturers Association's food litigation conference. A link to the slide-deck can be found here.
We discussed ways that the Reportable Food Registry (RFR) and the Food Safety Modernization Act (FSMA) are affecting litigation now and can be expected to affect litigation in the near term.
In particular, we discussed:
- Ongoing and pending changes to the RFR
- FSMA’s grant of records access to FDA
- Mandatory recall authority and how this may delay certain recalls
- Suspension of FDA registration
- Hazard analysis and preventative controls: What are they? How do they differ from HAACP? How they will be effective with or without FDA rulemaking
- Regulation of chemicals under FSMA (and under proposed changes to TSCA and Proposition 65 in California)
- Specific things that food sellers should consider now to reduce risk
Let me know if your business is interested in an in-house, customized presentation or training on the RFR and FSMA.
Many who track FDA's implementation of the Food Safety Modernization Act (FSMA) believe that a priority for FDA is Section 105, “Standards for Produce Safety” (FDCA section 419), in particular, the leafy greens regulations.
Farms are exempt under FSMA's produce safety rules if:
(A) during the previous 3-year period, the average annual monetary value of the food sold by such farm directly to qualified end-users during such period exceeded the average annual monetary value of the food sold by such farm to all other buyers during such period; and
(B) the average annual monetary value of all food sold during such period was less than $500,000, adjusted for inflation.
"Qualified End User" is defined as:
(i) the consumer of the food; or
(ii) a restaurant or retail food establishment (as those terms are defined by the Secretary for purposes of section 415) that is located—
(I) in the same State as the farm that produced the food; or
(II) not more than 275 miles from such farm.
The fear among many small farm and "ag-in-the-middle" proponents who are not exempt is that FDA will impose standards similar to those adopted by the National Leafy Greens Marketing Agreement (NLGMA) proponent group. Even the proponent group concedes that "the metrics developed by LGMA are not appropriate in every area and must be modified to address unique risks presented in different regions as well as varying production practices across the country."
Those non-exempt farms who cannot logistically or financially possibly comply with NLGMA metrics should consider the following action steps:
1. Be ready for the rule-making process. Marshal your case why your operation is low risk and should be treated differently from larger-scale operations and for those in California and Arizona the standards were developed for.
2. Start now laying the ground work with your state department of agriculture to seek a state variance for the FDA rules. The FSMA allows that:
A State or foreign country from which food is imported into the United States may in writing request a variance from the Secretary. Such request shall describe the variance requested and present information demonstrating that the variance does not increase the likelihood that the food for which the variance is requested will be adulterated under section 402, and that the variance provides the same level of public health protection . . . .
3. Call your congressional delegation. FDA has significant reporting obligations to Congress, which will have a significant role to play (funding, oversite, etc.) in how the FSMA gets implemented. Start educating your Congress people now on the fears that exist by "ag-in-the-middle" about the produce safety rules.
Following the playbook it has followed in the past with sodium and other issues, the Center for Science in the Public Interest (CSPI) has filed yet another complaint of very questionable legal merit to promote a policy agenda. This time CSPI seeks to compel all retailers to use loyalty cards as a recall alert system.
Some retailers use their loyalty card systems to alert customers of product recalls. Other retailers do not. Retailers who don't use loyalty cards as a recall alert system may have a variety of legitimate reasons why they don't or can't create the technology that CSPI wants a court to order retailers to implement. For example, some may lack the technological ability, have privacy agreements with customers that do not allow loyalty cards to be used as a recall alert system, or have other legitimate privacy concerns.
Like CSPI's sodium litigation, this complaint has serious flaws. It seeks broad certification of a "nationwide class" of customers who bought recalled products and whom the retailer "did not advise that they had bought Recalled Products." Even supposing that the claims had some legal merit, few "common issues of fact and law" are apparent. State law varies on the type of consumer fraud claims asserted. Some putative class members surely did get notice of the recall (through means other than loyalty cards).
On the merits, the claims are problematic because we suspect that many (and perhaps most) jurisdictions do not recognize a retailer’s affirmative duty to create some technology to alert customers of manufacturers’ recalls. The complaint utterly fails to acknowledge that retailers employ mechanisms other than loyalty cards to assure customers are aware of recalls.
On its face, a claim for breach of the warranty of merchantability is completely incongruent with a request that the court order retailers to employ new technologies. And, a loyalty card is not a good subject to the warranty of merchantability.
What might be most shameful about CSPI's complaint is its conflict with the Food Safety Modernization Act (FSMA), which CSPI purports to support. Section 211 of the FSMA modifies the Reportable Food Registry to enhance consumer notification of Class I recalls by grocery stores. FDA is tasked to, "[n]ot more than 1 year after the date of enactment of the [FSMA,] . . . develop and publish a list of acceptable conspicuous locations and manners" for grocery stores to notify customers of Class I recalls. CSPI (as well as anyone else) will have the opportunity to submit comments to FDA as part of the rule-making process.
Even if CSPI were somehow successful in its litigation, the outcome of the litigation may be supplanted or even in direct conflict with the FDA's rulemaking and the FSMA. Litigation is rarely a productive, efficient or useful way to create industry regulation. Litigation in the wake of legislation creating the actual policy that CSPI seeks to promote seems utterly wasteful and counterproductive.
One of the few pleasures of my current road trip is the chance to eat at Burgerville, a fast food chain based in Vancouver, WA, but with more stores in Oregon and none north of Centralia. Their motto is Fresh►Local►Sustainable; we’re proud to have them as a client.
Their attitude toward food may be a little different from what is ordinarily thought of as a fast food.
Healthful food choices are a natural for us. We use local, vegetarian-fed and antibiotic-free beef in our burgers, cage-free eggs in our breakfast items and our salads feature mixed greens with sustainable, local ingredients such as smoked salmon and Oregon hazelnuts.
As I entered their Kelso, Washington store last week, after being greeted by literally every member of the staff, I ordered my Rosemary Chicken Sandwich and Cherry Chocolate Shake, paid and was handed my receipt This is quite different “fast” food, as both items were individually prepared, and I had time to look down at my bill (pictured). Because I am wired that way, the bill immediately brought to mind the restaurant food labeling provisions of the Patient Protection and Affordable Care Act, about which I blogged last year.
The PPACA contains a requirement that retail food establishments with 20 or more locations doing business under the same name (even if under different ownership, such as a franchise) post certain basic nutrition information for their “standard menu items.” While the FDA has recently withdrawn guidance on how to conform to the statute, it claims it will propose regulations by the March 23, 2011, statutory deadline.
Burgerville appears to have made a virtue out of necessity. As you examine the bill, you will see two things. First, my food order is compared to two different daily caloric intake amounts, 2000 and 2500 calories. Second, Burgerville notes on the bill that I have the option of ordering my shake with yogurt instead of ice cream, which would cut the calories by about 45% and the fat intake by 90%. With this information, I can make choices, both on this trip to the restaurant and next time. This time, I rode my bike after dinner for eight hard miles. Next time, I’m ordering the yogurt shake.
Note: next time was the very next day, as I stopped at the Centralia, Washington store and indeed asked for my shake to be made with yogurt. Not only did I save the calories and fat, but the extra tang of the yogurt worked really well with the chocolate and cherries.
I suppose that makes me a bit of an anecdotal counterexample to the study published last month in the American Journal of Preventive Medicine, which indicated that ordering patterns were no different at Taco Time restaurants in King County, Washington, where caloric labeling is mandatory, and their stores in other jurisdictions.
The Washington legislature is currently considering a bill that would apparently require any contract that calls for the payment of money by an LLC or corporation, to include an extra signature by an authorized representative that would render the representative personally liable for any amounts due on the contract. HB 1535. In other words, under this bill any LLC or corporation making a contractual commitment that involves the payment of money would have to include a personal guarantee from a natural person.
This would be an extraordinary change to Washington law. No other state has anything comparable in its laws.
The Background. The bill would upend the familiar principle of the law that “when an agent makes a contract on behalf of a disclosed or partially disclosed principal whom he has power to bind, he does not thereby become liable for his principal’s nonperformance.” Griffiths & Sprague Stevedoring Co. v. Bayly, Martin & Fay, Inc., 71 Wn.2d 679 , 686, 430 P.2d 600 (1967). See Restatement (Second) of Agency § 320 (1958).
When an LLC manager (or a corporate officer) signs a contract on behalf of a company, the manager usually signs only as an agent of the company. The fact that the manager is signing as an agent is reflected in the typical signature block:
By: Wile E. Coyote
Vice President of Product Development
Under these well-accepted rules, LLC managers and corporate officers can sign contracts on behalf of their company without fear of becoming personally liable. If the rule were otherwise it would be exceedingly difficult to find a manager willing to sign for an LLC or corporation.
The Bill. The heart of the bill is a requirement that any “business payment contract” must contain an additional signature line, directly following and on the same page as any other signature line that the authorized business representative must sign. The additional signature line must be immediately preceded by the following legend in bold, 14-point or larger typeface:
By signing this contract you, the undersigned, agree to become PERSONALLY LIABLE for any sums due pursuant to this document, regardless of whether you are signing on behalf of a limited liability company, corporation, or nonprofit corporation.
This bill, if passed, will clearly make it difficult for LLCs to find managers willing to sign contracts for their LLC.
Drafting and Interpreting Statutes. The language of HB 1535 has some internal conflicts. I have described above the interpretation that I and other business lawyers that I have talked to have given to the bill. It is possible, however, that it was intended to simply require a warning legend on guarantee contracts, although that is a more difficult interpretation. In any event it needs to be clarified.
It is not an easy thing, to draft statutes so that they are clear, unambiguous and sufficiently detailed. This has repeatedly been driven home to me in my participation on a Bar committee that has reviewed proposed legislation.
HB 1535 is scheduled for public hearing in the Washington legislature’s House Committee on Business & Financial Services at 1:30 p.m. Tuesday, February 1, 2011, in Olympia, Washington. At the hearing I expect we will learn what is behind this bill and what the intent of its sponsors is. More information is available about the bill’s scheduled hearings here.
Last week, the FDA issued its first annual report on the Reportable Food Registry (RFR). The report provides statistics on the first year of the RFR (2240 entries, 229 "primary reports," a breakdown of the report by hazards, etc.).
Beyond the statistics, the FDA report should be noted by food companies for two reasons:
- Food Safety Plans
FDA Deputy Commissioner for Foods Michael Taylor says that “[s]everal key U.S. industries are already re-evaluating their hazard and preventive controls, core principles of the Food Safety Modernization Act recently passed by Congress. We also anticipate improved reporting as we continue our vigorous outreach to food facilities through federal, state, local and foreign agencies, to help us expand the positive effect of the RFR on the safety of the U.S. food supply.”
The new hazard analysis and preventative controls requirements in the Food Safety Modernization Act (FSMA) are not effective for 18 months following passage. Deputy Commissioner Taylor's comments suggest that industry standards may already be moving in that direction . To mitigate exposure and risk, FDA enforcement actions, product liability claims, supply chain contract claims and recalls, food manufacturers may want to consider updating and/or creating food safety plans that address the hazard analysis and preventative controls prescribed by the FSMA.
- Allergen Controls
The FDA reports undeclared allergens/intolerances accounted for 34.9 percent of the primary reports. Industry experts assert that the FDA believes that the industry does not in general have good control over the issue of undeclared allergens. These experts believe that the FDA will give special attention to the issue of undeclared allergens/intolerances in promulgating regulations under the FSMA's requirements for hazard analysis and preventative controls (see point 1 above). In anticipation of the FDA's concern, manufacturers should consider now how they can change manufacturing processes to address the undeclared allergen issue.
April 8, 2011 – Scott Rickman from Del Monte, Lara White from Adams and Reese, and I will be talking at the Defense Research Institute (DRI) food law break-out. This event is held in conjunction with the DRI annual product liability conference in New Orleans.
Click here for the complete manuscript that we’ve prepared to accompany our presentation. The manuscript summarizes some of the most significant and recent rulings concerning putative class claims arising from labeling and marketing of food products. The manuscript also offers suggestions on possible strategies to defeat these claims.
The type of claims discussed involves small-dollar state law “fraud” claims aggregated over millions of products sold. The common fact pattern is this: plaintiffs challenge the labeling or marketing of a food product, alleging that consumers would not have purchased the product or paid the price they did had they known the “truth” behind the representations made. Often, the plaintiffs’ strategy is to achieve class certification and then leverage the threat of a judgment into a settlement that involves a handsome payment of attorneys’ fees.
Recently, we’ve seen a trend toward legal action for labeling and/or marketing claims of products in the “natural” area and those touting health benefits. In many of these cases, preemption has not been successful to knock out claims in their entirety. State law varies considerably, and this can often work to the advantage of a food company. When that doesn’t work and when a jurisdiction doesn’t require an individualized showing of causation or reliance, here’s an alternative strategy to dismiss claims at an early stage:
- In states where plaintiffs need not show individualized reliance/causation, they may still have to demonstrate that an objectively reasonable consumer would have been damaged by the marketing/advertising campaign.
- The Supreme Court in Iqbal/Twombly said that a court must disregard conclusory allegations and scrutinize the complaint’s factual allegations to determine whether it nudges the alleged wrong-doing “across the line from conceivable to plausible.” The complaint must have meat on its bones. In the case of a consumer fraud class complaint, the plaintiffs’ counsel, to survive a motion to dismiss, must include references to evidence or other substantiation for the claim such as consumer surveys or perhaps a government finding.
- Without a strong factual basis as to how an “objectively reasonable consumer” might behave, consumer fraud/unfair trade practices putative class claims concerning the marketing of a food product may be in jeopardy.
Yesterday (while taking a break from the Sustainable Food Summit in San Francisco), I traveled to Modesto, California to speak to the Manufacturer's Council of the Central Valley. I spoke about the new Food Safety Modernization Act (FSMA).
The focus of my talk was how the FSMA changes the status quo for food businesses. And when I mean changes the status quo, I mean not only what a food company needs to do to comply with the FSMA, but also how the FSMA is likely to affect exposure from recalls and product liability. I also discussed in some detail the dilemmas faced by food businesses and the FDA by the Reportable Food Registry (RFR) and its fallout. Here is a link to my slide deck.
I'm willing to tailor this talk to your company or trade association; just let me know.
Please also consider attending the ABA's Food and Supplements CLE at Coke World Headquarters in Atlanta on February 17. I'll be moderating with Ricardo Carvajal a panel of experts on the FSMA including Robert Brackett (formerly head of CFSAN), Art Liang from CDC, Miriam Guggenheim and Fred Degnan.
At the upcoming GMA food litigation conference in Scottsdale, Arizona, I'll be speaking with my law partner Lee Smith about specific strategies and action steps to take to reduce the increased risks from FDA compliance, and recalls and product liability exposures created by the FSMA and the RFR. We'll also touch on strategies to deal with some current trends in marketing and labeling putative class claims.
President Obama signed into law today the Food Safety Modernization Act (FSMA).
Companies with facilities subject to FDA jurisdiction should take immediate steps to review and, where necessary, modify SOPs, policies and procedures.
For example, given the FDA's expanded access to business records, companies should set SOPs that anticipate (before a crisis occurs) what records they may have to turn over and what they may not. Food companies should take steps to protect confidential and proprietary information.
Companies also should anticipate now how they need to change their policies and approaches to mandatory recalls and whistleblower protections.
These parts of the legislation take effect today:
- Stronger records access authority by FDA (FSMA § 101)
- When FDA determines a "reasonable probability" of "serious adverse health consequences"
- FDA can access records of other food affected in a similar manner
- But FDA must show proper credentials and provide written notice
- Mandatory recall authority (FSMA § 206)
- FDA can order a recall if it finds a "reasonable probability" that
- food is adulterated or misbranded; and
- there may be serious adverse health consequences
- FDA has to provide an opportunity for a voluntary recall
- FDA will provide an informal hearing within two days of the order’s issuance
- FDA can order a recall if it finds a "reasonable probability" that
- Increased frequency of inspections (FSMA § 201)
- FDA will immediately increase the frequency of inspections
- FDA will apply a risk-based approach to determine priorities
- Whistleblower protection (FSMA § 402)
- Protects employees who:
- Provide information re violation of FDC Act ,
- Testify, assist or participate in a proceeding re a violation, and/or
- Object to "activity, policy, practice or assigned task" they "reasonably believe to be a violation"
- Protects employees who:
- Refused admission of imports if foreign facility refuses inspection (FSMA § 306)
- Foreign establishments must allow entry to U.S. inspectors within 24 hours of requesting entry
- Or imported food will be refused admission.
Future blog entries will discuss compliance with other provisions of the FSMA scheduled to be phased-in. If you are interested in a more detailed in-house discussion of the FSMA and its effect on your company, please let us know.
Apparently, according to the San Francisco Chronicle, due to opposition from both the industry and environmental and health groups defending green-chemistry regulations, the state of California failed to meet a deadline to approve the new regulations. Earlier in December, environmentalists and health lobbyists had complained that the rules were watered down and accused Gov. Schwarzenegger of caving into pressure from business and industry (see here and here).
The rules were initially designed to regulate harmful ingredients in hundreds of thousands of products. The regulations were released in June of 2010, and the revisions were extensive, causing the negative comments noted above. The agency has indicated it was striving to concentrate on the biggest impact products, and if it had to postpone approving the final version of the regulations to get it right, it would do so. "We thought it would be better to get it right, rather than just getting it done," said Maziar Movassaghi, the department's acting director. Read more here.
For what it's worth, this is the link to the FDA's own interpretation of what the new food safety bill means.
This entry has been corrected to reflect that some of the provisions in the Food Safety Modernization Act, most significantly the preventative controls section, will be phased in over time.
Today the House passed and sent to the President for his signature a bill to overhaul the current regulations on food safety, which were established over 70 years ago. Among other things, the bill will impose new record-keeping requirements on companies, require most FDA-regulating entities to maintain food safety plans, require the FDA to develop a traceability pilot project, and give the FDA broad authority to mandate recalls, regulate food and ingredients that are imported, conduct regular inspections of facilities that produce food and impose new fees on the industry.
Some of the provisions of the new law will be effective immediately. If you are an FDA-regulated food grower, processor or seller, compliance with the new law will be critical going forward. You should consult now with your food safety and food regulatory team to determine what your business needs to do to come in compliance.
On Friday, S. 510, the food safety bill, was declared dead. Last nite (Sunday), the Associated Press reported the bill may finally pass in the final hours of the 111th Congress. The New York Times report can be linked here. The text of what I understand will be headed to a final vote in the House on Tuesday and signed into law by the President can be linked here.
The multinational food company Dannon agreed to a 45 million dollar class action settlement earlier this year based on consumer complaints about advertising claims regarding the health benefits of its probiotic line of dairy products. Now the company has entered into a $21 million dollar settlement with the attorneys general from 39 states. The L.A. Times reports that this is the largest-ever multistate attorney general consumer protection settlement with a food producer. The attorneys general alleged that Dannon made deceptive and unlawful claims in advertising which were not substantiated by competent and reliable scientific evidence at the time the claims were made. According to the allegations, the majority of scientific studies showed improvement in intestinal transit time when an individual consumed three servings of the probiotic products per day for two weeks, and did not support Dannon's advertised claims that one serving per day for two weeks improved digestive health. In addition, the attorneys general alleged that Dannon could not substantiate claims regarding improved immunity against the flu and common cold.
Dannon also agreed with the FTC to drop claims that the probiotic foods help prevent irregularity and offer protection against the flu and common cold. The FTC found no substantiation of these claims. This isn’t the first time Dannon has had to alter its advertising; the March settlement required Dannon to remove specific language about the health benefits of the products from labels and advertising.
Dannon also agreed with the FTC to drop claims that the probiotic foods help prevent irregularity and offer protection against the flu and common cold. The FTC found no substantiation of these claims. This isn’t the first time Dannon has had to alter its advertising; the March settlement required Dannon to remove specific language about the health benefits of the products from labels and advertising.
Between this and the March settlement, Dannon has now agreed to pay $66 million as restitution for the misleading health claims, which comes out to about 1.3% of Dannon reported $5 billion in worldwide net sales of the probiotic line in 2009. This latest settlement should remind companies to keep state governments on the list of watchful eyes monitoring health claims related to food and supplement products.
We're nearly down to the wire on whether the 111th Congress will send S.510, the food safety bill, to the President for signature into law. I'm told it could happen by the weekend.
No matter what happens in Congress, food law is changing and changing faster than it ever has. The ABA Food Supplements Subcommittee and Products Liability Committee of the Section of Litigation is organizing a day-long CLE February 17 at Coke world headquarters in Atlanta. I'll be co-moderating a panel titled, "What’s New? The Impact of Federal Statutory and Regulatory Reforms on the Food Industry and in Upcoming Litigation." If you want to know what will happen at the FDA (and other agencies) when food safety legislation passes (or doesn’t), you should be at this CLE.
Aside from statutory and regulatory reform, other panel discussions will discuss consumer class actions against food companies, the evolving science of food safety, labeling of biologic active foods, and predictions from top in-house counsel.
For those in the industry and serving the industry the conference is a great value (registration as low as $120). Register here. Hope to see you there.
For years, a debate has raged on the merits of vesting the FDA with mandatory recall powers. Mandatory recall is part of the food safety legislation that may or may not pass in this Congress, so it’s worth discussing. At present, the FDA lacks any power to order a recall. Its only legal authority is administrative detention and seizure.
Many, including some regulators, have argued against mandatory recall because it will result in less and less timely recalls. The argument that mandatory recalls may result in less timely recalls goes as follows:
- Under the current system (where FDA lacks mandatory recall authority), the onus is on the food seller to initiate the recall. If it doesn't issue a recall in the face of an FDA request to issue a recall, the food seller faces the dire consequences of FDA's bully pulpit (press releases from FDA explaining why the food is unsafe) and possibly a seizure order. In the event of foodborne illnesses, ignoring an FDA request may also be grounds for punitive damages under the laws of some states;
- Because the onus under the current system is on the food seller (and not the FDA), the FDA frequently defers to the food seller's judgment when the facts surrounding a potential recall remain murky and uncertain. The FDA is not required to make a judgment about a recall and, for political reasons, often refrains from or delays making a decision as to whether to request a recall;
- Mandatory recall may reverse the dynamic and remove much of the onus from the food seller and put it on FDA. Mandatory recall may give the food seller cover if it chooses to delay or not issue a recall. If a food seller believes that its product is unlikely to be a threat to human or animal health, it might choose to wait until the FDA orders a recall. Under the current system, most food sellers will err on the side of caution when deciding whether or not to issue a recall. If the facts surrounding a recall are murky or uncertain, a mandatory recall regime may make it more prudent for a seller to wait for the FDA to decide. If the FDA is worried about being too trigger happy or quick to order recalls, a recall that may have been issued routinely under the current system may (ironically) never happen if FDA is vested with mandatory recall authority.
Mandatory recall authority, as its currently written in S. 510, may also change the threshold of when recalls are initiated. The threshold for a recall under sec. 206 of S.510 is described as when "there is a reasonable probability that an article of food . . . is adulterated . . . or misbranded . . . and the use of or exposure to such article will cause serious adverse health consequences or death to humans or animals."
The language of the statute closely follows what the FDA currently defines as a class I recall. But what about situations defined under the current scheme as class II or class III recalls? FDA's definition of a Class II recall is "a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote." A Class III recall is "a situation in which use of or exposure to a violative product is not likely to cause adverse health consequences." Query whether the statute lets foodd sellers off the hook for issuing recalls in Class II or Class III situations?
Note that FDA appears to retain some power even if there is not "reasonable probability" that the product will "cause serious adverse health consequences or death." S. 510 appears to lower the threshold for administrative detention by FDA by removing the condition that the food presents a risk of serious adverse health consequences. And, under S. 510, FDA would continue to have seizure power. The standard for seizure is simply if the food is adulterated or misbranded. One has to wonder whether FDA would use its limited resources on a seizure action in a class II or class III food recall where the chances of serious adverse health consequences are remote or not likely.
Today, the United States Senate passed the food safety bill, S. 510. If this were to become law (and according to the New York Times , this is a big if), the legislation would impose the most sweeping changes to food regulation in decades.
Among many other things, the bill would allow the FDA to order mandatory recalls, impose new record keeping requirements on businesses and establish stricter import standards. As a consequence, virtually every FDA regulated food manufacturer would have to adjust its approach to food safety, record keeping, supply-chain contracting and government relations. If this legislation becomes law, stay tuned here for in-depth analysis.
In an update to an earlier blog post, the FDA issued warning letters today to four manufacturers of caffeinated alcoholic beverages. The FDA stated in the letters that caffeine added to malt alcoholic beverages was an “unsafe food additive ” and thus, such products are in violation of the Federal Food, Drug, and Cosmetic Act (“FFDCA”).
Recipients of the letters, which included Charge Beverages Corp.; New Century Brewing Co., LLC; Phusion Projects, LLC (d/b/a Drink Four Brewing Co.); and United Brands Company Inc., have 15 days from receipt of the letter to respond to the FDA with their respective mitigation measures. Those companies may also challenge the ruling that their particular products are in violation. Failure to comply could result in enforcement actions by the FDA, including seizure of merchandize.
The FDA’s move was considered an almost certainty given the myriad of recent actions taken by a number of states to curb or ban the sale of caffeinated alcoholic beverages.
Amidst rising incidences of hospitalizations in college and teenage drinkers linked to consumption of alcoholic energy drinks, the Washington State Liquor Control Board banned their sale effective tomorrow, November 18, 2010. The move came on the heels of a request by Washington Governor Christine Gregoire, whose office stated in a November 10 press release that they were “…particularly concerned that these drinks tend to target young people.”
The Liquor Control Board placed the ban in an emergency ruling which will last for 120 days. During that time, the Liquor Control Board will move to make the ban permanent. Liquor Control Board Chairperson Sharon Foster stated, “[t]he Board is acting in the public safety…the Board is acting now to ensure these products do not contribute to a tragedy before the Food and Drug Administration or Legislature can act.” Earlier this year, the Liquor Control Board had lobbied for State legislative action to ban the sale of caffeinated malt beverages in Washington but those efforts were unsuccessful. A list of particular products affected by the Liquor Control Board’s ruling can be seen here.
Washington’s ban is merely the most recent action in an ever increasing movement by states to control the sale of caffeinated alcoholic beverages. The Oregon Liquor Control Commission Chairman stated in an October press release that, “…alcoholic energy drinks should be removed from the market until further research isdone.” The OLCC also stated that it is currently looking into possible regulatory efforts with the state legislature and is reaching out to community organizations to warn them of the dangers of the beverages.
While California’s Department of Alcoholic Beverage Control has not yet made a statement regarding the drinks, Connecticut announced Monday that it had reached agreements with state distributors to voluntarily stop shipments of caffeinated alcoholic beverages starting December 10, 2010. Michigan has banned one particular brand of caffeinated alcoholic beverage, Four Loko. New York has reached an agreement with Phusion Projects LLC, the manufacturer of Four Loko, to stop sales in the state until “…emerging science, regulatory developments or other relevant changes in circumstances arise." Utah and Oklahoma have followed Washington’s lead in banning the sale of any brands altogether. Massachusetts’ Alcoholic Beverage Control Commission stated that it will file an emergency ruling, similar to Washington’s, on Monday, November 22, 2010.
At the federal level, the Food and Drug Administration (“FDA”) is currently reviewing whether caffeine is a safe additive to alcoholic beverages. A negative finding would essentially ban the sale of caffeinated alcoholic beverages nationwide. It is widely assumed the FDA will, in fact, reach a negative finding. NY Senator Chuck Schumer, who has been lobbying for a ban on the drinks, stated that the FDA decision “…should be the nail in the coffin of these dangerous and toxic drinks.” The FDA decision is expected within the week.
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?
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.
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 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.
Peeled, Inc. (“Peeled”) www.peeledsnacks.com, a company specializing in healthy, natural snack foods including dried fruits and dry roasted nuts, recently filed a trademark infringement suit in the United States District Court for the Southern District of New York against Peeled Fruit LLC (“Peeled Fruit”) www.simplypeeled.com. Peeled Fruit sells frozen soft-serve fruit, with fresh fruit toppings. Peeled alleges that Peeled Fruit is attempting to cash in on the brand awareness and goodwill associated with Peeled’s marks.
The Corn Refiners Association (the “CRA”), a trade organization representing the US corn refining industry, recently petitioned the Food and Drug Administration (the “FDA”) to allow the term “corn sugar” as an alternative label declaration for high fructose corn syrup (“HFCS”). The the FDA’s decision on whether to approve the renaming is expected to take up to two years.
The CRA is advocating the renaming, stressing that HFCS, despite the name, is not actually high in fructose. There are three different types of HFCS one that is 55 percent fructose and 42 percent glucose (HFCS 55, most commonly found in soft drinks) - one that is 42 percent fructose and 58 percent glucose (HFCS 42, usually used in food products), and one used for specialty applications that is 90 percent fructose and 10 percent glucose (HFCS 90, typically used to blend with HFCS 42 to make HFCS 55). Buttressing the CRA’s claim is an American Dietetic Association study that also reached the conclusion that HFCS contains proportions of fructose and glucose that are similar to sugar.
While the CRA’s stated objective in pursuing the alternative label declaration for HFCS is achieving greater clarity for consumers, this change may also yield economic benefits for companies that use HFCS in their products. According to a recent report by market research organization Mintel, a majority of consumers surveyed claim to avoid products in which HFCS is listed as one of the first ingredients. This preference is strongest among more affluent and better educated consumers. HFCS has faced significant levels of negative publicity in recent years, reaching a crescendo with the 2004 publication of a study in the American Journal of Clinical Nutrition highlighting the parallel between obesity and the rise in high fructose corn syrup consumption, and hypothesizing that the two could be related. The study’s authors have since said they were wrong in their speculation, and the American Medical Association has concluded that HFCS “does not appear to contribute more to obesity than other caloric sweeteners”, but as the results of consumer surveys and sales data indicate, the backlash against HFCS has continued. There is precedent for this type of rebranding, as in November of 2009 Ajinomoto rebranded its aspartame sweetener as “AminoSweet” based on many of the same issues at play in the current discussion of HFCS.
By Guest Blogger Elaine Albrich
This post also appears on the Alcoholic Beverages Law Blog
Figuring out what information must be on your wine label can be tedious. Adding terms like "organic" or "sustainably-grown" can be even more challenging. Extra steps are required for adding organic certifications or claims to a wine label, although the regulation of such claims under the Alcohol and Tobacco Trade Bureau ("TTB") Certification/Exemption of Label/Bottle Approval (COLA) process has been made more clear with the Memorandum of Understanding between the TTB and the USDA concerning organic labeling and adverting. The MOU clarifies and delineates the enforcement responsibilities of each agency with respect to labeling and advertising of alcohol beverages produced under the Organic Foods Production Act of 1990 (OFPA).
The USDA has authority over domestic and imported agricultural products to be sold, labeled, or represented, as organically produced. Under OFPA, the USDA has established the National Organic Program (NOP). Agricultural products that are sold or labeled as organically produced must be produced and handled in accordance with NOP. Any use of the term "organic" on a wine label or in adverting of wine must comply with the USDA's NOP regulations. Now, with the adoption of the MOU, it is clear that TTB has the regulatory authority to determine whether proposed labels are consistent with NOP.
The Advertising Labeling and Formulation Division (ALFD) of the TTB has guidance for organic labeling applicants. The guidelines provide a step-by-step process of what is required to obtain label approval, including the need for proof of USDA-accredited certifying agent (ACA) preview, a certification statement, a sulfite statement, an ingredient statement, the USDA seal, and so on. The guidelines also contain an organic label quick reference sheet that explains the requirements for the various organic claims, like "100 percent organic," "organic," or "made with organic (specify ingredient)." Additional TTB guidelines on variations of "organic" labeling are available at www.ttb.gov/pdf/wine.pdf.
For fun, I looked at four different bottles of wine that made some claims for "green production." The first was a NSA Organic, USDA certified wine from the Columbia Valley. The bottle was blazed with the "organic" nature of the wine, from the foil marked with "NSA Organic" to the "certified organic vineyard" on the "back" label. The USDA Organic stamp was also featured. Comparatively, an Oregon pinot from Eola-Amity Hills was simply marked with a small "made with organic grapes" statement and certified organic by Oregon Tilth. Then there was another wine from Columbia Valley that, while not having any "organic" claim, was described as a "wine of sustainable and environmentally friendly farming." Finally, the fourth was an Austrian wine certified "Demeter," a biodynamics certification. However, notably many wines that are known to value biodynamic or sustainable farming practices do not make such claims on their labels. Recognizably, this allows for more flexibility and avoids the extra steps of having to prove organic label claims.
By Guest Blogger Lee Smith
California is on the cusp of approving draft regulations that are proposed for California’s new Green Chemistry Initiative (GCI) .Green chemistry, per the initiative, is the process for reducing or eliminating the use of hazardous materials by transitioning away from managing toxic chemicals at the end of the lifecycle, and instead reducing or eliminating their use from the start. In other words green chemistry seeks to provide incentives to remove hazardous ingredients and chemicals from products sold in California.
The statutory basis for the GCI in California was AB 1879 (2008 Cal. Stat. Chapter 599), which provides statutory authority for the California Department of Toxic Substances Control (DTSC) to adopt regulations for identifying and prioritizing “Chemicals of Concern” within consumer products and for evaluating safer alternatives to toxic chemicals. Another bill, SB 509 (2008 Cal. Stat. Chapter 560), establishes an online Toxics Information Clearinghouse to provide information about the toxicity and hazard traits of chemicals used in California. The bills also create mechanisms to provide guidance and oversight through a newGreen Ribbon Science Panel of experts and by expanding the role of the Environmental Policy Council, made up of heads of the California Environmental Protection Agency boards and departments.
In March 2010, DTSC made public a conceptual process flowchart that established the
framework for the regulatory process. The second step created and made public an outline of
the Draft Regulations for Safer Consumer Products. This outline proposed a framework for scientific and systematic prioritization of chemicals and products of concern, preparation of alternatives assessments and development of DTSC’s regulatory responses. The next step was the development and release of the draft regulations that occurred in June.. The draft regulations specify the processes for DTSC to scientifically and systematically identify and prioritize chemicals and consumer products, for manufacturers to conduct alternatives assessments and for DTSC to impose regulatory responses for alternatives selected by manufacturers. To get a feel for the regulations, the conceptual model can be found here. The conceptual model is complex, as are the regulations, which have resulted in comments, both pro and con. Essentially the regulations apply to “all consumer products made available for use in California;” judging by the litigation that has occurred with respect to Proposition 65, this sentence provides coverage beyond the manufacturer-retailer-consumer relationship that is usually the target of this type of regulation.
“Make available for use in California” means that a person sells, offers for sale, distributes, leases, offers to lease, supplies, or otherwise transfers control overthe disposition of a consumer product directly to a California consumer; or to another person without maintaining sufficient control over the distribution, sale, lease, supply, or other transfer of the consumer product by that person to prevent the use of the consumer product by a California consumer.”
“Sell or offer for sale” means any transfer or offer to transfer for consideration of title or the right to use, by lease or sales contract, including, but not limited to, transactions conducted through sales outlets, catalogs, or the Internet, or any other similar electronic means.” CHAPTER 53 OF DIVISION 4.5 OF TITLE 22, CALIFORNIA CODE OF DRAFT REGULATIONS Sec. 69301.2 Definitions.
Products that are identified as violating the initiative cannot be sold in and must be recalled from the California market. Under the sections concerning identifying products of concern, full disclosure of the chemical makeup of the products is required. Several lists of chemicals are to be compiled including Chemicals of Concern and Chemicals under Consideration. To provide an idea of the complexity, without going into detail, the outline for 61 pages of regulations is 21 pages long.
The list of “Chemicals of Concern,” includes carcinogens, mutagens, neurotoxins and compounds that disrupt hormones, persist in the environment or accumulate in human bodies. DTSC would pick priority products that are heavily used by children, pregnant women, the elderly and other sensitive populations.
Manufacturers, suppliers and importers would have to certify to the state and to retailers that their products on the list are free of chemicals before they would be able to sell them in California. In some cases, they would also perform assessments to find safer alternatives.
There are already comments from the industry that the regulatory process is unworkable and from the environmental camp that the initiative should go farther to protect public. Comments have been submitted by various groups. TheAdministrative Procedures Act process calls for public hearings and a 45-day public comment period. Specific information about the APA process will be announced when the final draft regulation is available for review.
Click on the image below to view the slide-deck from the presentation that I recently gave with Scott Rickman from Del Monte at ACI’s summit on Food Safety and Regulatory Compliance in Chicago. The ACI summit was a nice introduction to food regulation byFDA, USDA, FTC, EPA and DHS. Our presentation was intended to start from the premise that the job of a food lawyer (whether inside or outside counsel) does not end at ensuring regulatory compliance. Products that are regulatory-compliant may still be subject to putative class claims.
At its recent annual meeting, the American Medical Association (“AMA”) agreed to urge the Food and Drug Administration (“FDA”) to adopt more accurate labeling standards regarding trans fats and saturated fats used in food products.
Current FDA rules allow nutrition labels to list saturated and trans fats as zero, so long as the product contains less than 0.5 grams of fat per serving. However, the AMA claims that this is misleading to consumers, who could potentially consume more than a quarter of the American Heart Association’s recommended limit of two grams of trans fat per day in a single serving, unaware that the product contains trans fats.
The AMA’s position that consumers are being misled by current FDA rules does have some support in the marketplace. In a consumer survey conducted by market researchers Greenfield Online, 72 percent of U.S. respondents said they read nutrition labels and fact panels in an effort to make healthy purchasing decisions when shopping, and 61 percent said they considered zero grams of trans fat per serving to be the most important heart health related claim for a product.
By Guest Blogger David Pacheco
This post also appears on the Essential Nutrition Law Blog
Yesterday, Stoel Rives' Salt Lake City office hosted a seminar on Advertising Law with Catherine Lake, Josh Gigger, and myself presenting. As part of the seminar, I offered some tips on avoiding legal problems when advertising the environmental friendliness of your goods or services. Here is a summary of those tips:Continue Reading...
“Got Milk?” The answer to that question may not be as cut and dried as you might believe, at least in Wisconsin. In a May 19 letter to the state Senate, Wisconsin Governor Jim Doyle explained his rationale behind his veto of Senate Bill 434, which would have authorized dairy farmers with a Grade A dairy farm permit to sell unpasteurized milk, buttermilk, butter, and cream directly to consumers. Sellers would have been required to post a warning sign at the site of sale stating that raw milk does not provide the protection of pasteurization and is not recommended for certain categories of consumers – including children, seniors, pregnant or nursing women, diabetics, or those with compromised immune systems.
Citing widespread opposition from the public health community (including the Wisconsin Public Health Association and the Food and Drug Administration, which has previously issued releases on the health issues related to unpasteurized milk) and numerous industry stakeholders, Governor Doyle explained that, in his view, the lack of rigor in the testing standards for pathogens, risks to public health and the state’s economic interests should an outbreak of disease linked to consumption of unpasteurized milk occur, and the ongoing work of the Wisconsin Department of Agriculture, Trade and Consumer Protection’s recently created Raw Milk Policy Working Group, which has been charged with reviewing the legal and regulatory framework surrounding the sale of unpasteurized milk to consumers in an attempt to strike a balance between market demand and public health, warranted a veto of the bill. An aide to Majority Leader Russ Decker stated that the Senate is not likely to attempt to override Governor Doyle’s veto.
This issue of the sale of unpasteurized milk to consumers is not limited to Wisconsin. In his letter to the Senate, Governor Doyle mentioned the comprehensive testing approach required for raw milk products under California law. In order for raw milk to be legally sold in California, it must meet the standards provided in the Milk and Milk Products Act of 1947. Under California Administrative Code, raw milk and raw milk products must bear a detailed warning to consumers on the principal display panel of the label. Washington State Administrative Code also requires raw milk containers to bear a warning label. As more consumers express preferences for unprocessed, “natural” foods, issues related to the sale and consumption of unpasteurized milk could find a more prominent place in the judicial system and industry marketplace.
By Guest Blogger Jonathan Stagg
This post also appears on the Essential Nutrition Law Blog
One major complaint of companies marketing nutritional supplements is that the FDA severely limits their use of scientific findings in promoting the health benefits of their products. Under current FDA regulations, use of a scientific study to advertise the health benefits of a given product can convert the product from a nutritional supplement into a drug, and therefore impose the vast array of regulations applied to drugs. As a result, nutritional supplement manufacturers have to be very careful about claiming health benefits or citing to scientific research, whether on their product labeling or even on their websites.
In response to these concerns, Congressmen Jason Chaffetz (R-UT) and Jared Polis (D-CO), introduced what they are calling the “Free Speech About Sciences Act.” This proposed legislation seeks to soften the application of these FDA regulations to nutritional supplements. If the law were to pass, companies would be allowed to reference “legitimate scientific research” in support of claims about the health benefits of their products. In order to fall within the definition of “legitimate scientific research,” the study must have been conducted and reviewed according to certain standards, and must appear in a peer-reviewed scientific publication. Companies must also follow certain guidelines in presenting the findings, such as including an accurate and balanced summary of the research, providing consumers a citation to the study, and providing information about the entities who funded the research.
By Guest Blogger David Pacheco
This post also appears on the Essential Nutrition Law Blog
It is hard to deny that Americans are putting on the pounds and that the problem is often starting with poor nutrition during childhood. The problem has not gone unnoticed and a number of organizations, including the federal government, are trying to trim down the epidemic.
Authors Ellen-Marie Whelan , Lesley Russell, and Sonia Sekhar of the Center for American Progress recently published the report, "Confronting America's Childhood Obesity Epidemic: How the Health Care Reform Law Will Help Prevent and Reduce Obesity" (link to website introducing the report, with links to the full version and executive summary). As is clear from the title, the report analyzes the potential effect of the new health care reform laws on children's nutrition. Specifically, the authors discuss the Patient Protection and Affordable Care Act and highlight the following provisions as those with the most effective measures for combating childhood obesity:
•Improved nutrition labeling in fast food restaurants, which will list calories and provide information on other nutrients (For more information on this specific provision, take a look at Richard Goldfarb's excellent post with his thoughts on the new labeling requirement).
•The Childhood Obesity Demonstration Project, which gives grants to community-based obesity intervention programs
•Community Transformation Grants, which gives grants to community-based efforts to prevent chronic diseases
The report also analyzes a number of other aspects of the law that, while not targeted specifically at combating obesity, the authors believe will have some positive effect on the problem.
By Guest Blogger Jay Eckhardt
In a dispute over product labeling and marketing, the Coca-Cola Company avoids liability as a result of its careful compliance with FDA rules. (Also, see Rick's post from last week, regarding Coca-Cola's victory in a dispute over its original formula label found on Coke® Classic.) But pomegranate champion POM Wonderful can still pursue a Lanham Act deceptive advertising claim against the company.
On May 5 the U.S. District Court for the Central District of California issued summary judgment orders that cut out two of POM's claims against Coca-Cola's "Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Juice Blend." (Download a copy of the Central District of California's Order here.)
The court acknowledged that consumers have griped about the emphasis on pomegranate and blueberry in the Minute Maid product labeling and advertising. (See Ken's post about a consumer class action concerning Tropicana's pomegranate blueberry juice blend here.) Still, the court agreed with Coca-Cola that POM could not bring a Lanham Act claim challenging the product name, because the company complied with FDA labeling requirements. The Minute Maid product contains less than one-half of one percent (0.5%) pomegranate and blueberry juice, but the court determined that the name is compliant with FDA rules, which allow for product names that prominently cite ingredients that are less than prominent in volume. Because the label clearly notes that the juice is "flavored" with pomegranate and blueberry juice and that the juice is a "blend" of several juices, the court held that the name complies with applicable FDA regulations (21 C.F.R. §§ 102.33(c) and 101.22(i)(1)(i)).
A second claim raised by POM was thrown out by the court. POM sought restitution under California Business & Professions Code section 17200, which provides a cause of action for "Unfair Competition." The court dismissed this claim because "restitution" has been narrowly interpreted by the California Supreme Court, thus barring POM's claim for recovery of a "lost business opportunity." Among authorities cited for the decision to dismiss this claim, the court reported that POM's similar claims under California's Unfair Competition law, brought against Tropicana and Welch's, have recently been dismissed in separate actions.
A third claim survived Coca-Cola's summary judgment attack. POM may proceed under the Lanham Act to challenge the marketing and advertising for the "blueberry pomegranate" product. The court held that POM may attempt to prove at trial that advertising and marketing actually deceived customers, or that Coca-Cola willfully and intentionally misled customers with the marketing of its product.
As noted from the court's order, Coca-Cola is not the only target of POM's litigation strategy. Other juice makers, Tropicana and Welch's, have been the focus of POM's efforts to defend its niche. Ken reported on POM's challenge to Ocean Spray's pomegranate cranberry juice blend last August, when POM survived Ocean Spray's initial motion to dismiss all claims.
An inspired marketing campaign for POM's products, and its essential ingredient, helped build the pomegranate franchise. It's hard to say whether litigation against advertising and labeling practices of POM's pomegranate competitors will be effective. At the same time, there's no doubt that POM is well aware of the burdens of FDA labeling regulations – the company was one among 17 companies notified by the FDA last February that its product labeling and advertising did not pass muster. The FDA warned POM that its advertising was suspect, based on the health claims made on its web site about the benefits of pomegranate juice.
On April 27, the U.S. District Court for the Southern District of Illinois dismissed the case of Kremers v. Coca-Cola Company. The case involved another of these ubiquitous claims where someone is suing saying they were fooled by labeling on a product. Unfortunately, the case was dismissed on grounds that indicate we might never really know the answer to the real gravamen to the plaintiffs’ complaint.
The claim involved the change, famous in product lore, from Coke to “new Coke” and then back to “Coca-Cola classic.” In 1985, Coca-Cola Company announced it was reformulating its flagship brand, renaming it “New Coke.” Two months later, having learned that brand loyalty may indeed trump blind taste tests, it relaunched its old formula as “Coca-Cola classic.” Eventually, New Coke was renamed “Coke II” and is, according to Coca-Cola Company itself, no longer available in the United States.
The Kremers case involved what, at least on the can of Coke® I borrowed from my office, is a tiny legend at the bottom of the can, saying “Original Formula.” The claim was that the original formula” of Coca-Cola included sugar, not high fructose corn syrup, and therefore the phrase “Original Formula” was misleading, requiring, of course, the company to cough up damages to everyone who had been fooled by the phrase.
Unfortunately for the two named plaintiffs, fortunately for Coca-Cola Company and definitely unfortunately for anyone who wanted to find out the answer to the question of whether “Original Formula” could in fact be misleading, the two plaintiffs had different, but equally dispositive, flaws in their cases. Lead plaintiff Amanda Kremers couldn’t beat the five year Illinois statute of limitations for claims of unjust enrichment. She admitted in her deposition that she had first heard that high fructose corn syrup was in Coke® way back in the 1990s. Second named plaintiff Jason McCann admitted on deposition that he’d never read the words “Original Formula” on the can, which made it basically impossible for him to claim he was deceived. And both plaintiffs admitted to continuing to buy Coke® even after the case was brought, when they clearly could not have been deceived about the contents of the beverage, since they were already suing its manufacturer.
The unanswered question in the case is interesting. As you can see, the type size for “Original Formula” is about the same as the type size for “High Fructose Corn Syrup” on the ingredients label. That would probably argue against anyone being reasonably misled by the one by somehow failing to look at the other.
More to the point, however, is that the history of Coca-Cola does not support the plaintiff’s case. The “formula” of Coca-Cola is proprietary and a trade secret (though how much of a secret is of course the subject of debate). Coca-Cola used to include real live cocaine, as opposed to completely decocainized coca leaves. According to Snopes, at some point in the 1920’s
glycerin was added as a preservative, cocaine was eliminated, caffeine was greatly reduced, and citric acid was replaced by phosphoric acid, to name the changes we know about.
By “Original Formula,” they quite clearly mean “not that New Coke stuff everyone complained about in 1985.” Coca-Cola Company itself admits they misunderstood their own customers then; they’re just reassuring them now.
Also according to Snopes, when New Coke was introduced in 1985, there was no sugar in Coke®. So focusing on the high fructose corn syrup, as opposed to the other changes, seems likely to be an attack on HFCS more than anything to do with being fooled by which Coca-Cola formula is in the can.
Of course, if you want Coke® with real sugar, it’s available from Mexico (Sugared Coke® is also available in the United States in some areas around Passover, because observant Ashkenazic Jews don't eat corn during the holiday).
I haven’t drunk Coke® in years, but this past winter we were visiting some Mayan ruins and on the way back had lunch in Bacalar, where we had a choice of beer, bottled water and Coke®. I chose the Coke® and after one sip I realized that this was the beverage I had grown up with. Yes, sugar in Coke® does, at least to these taste buds, make a difference. But I can also read a label.
Froot Loops pre-dated Crosby, Stills, Nash & Young. I remember taking the Kellogg's factory tour in Battle Creek and being handed an individual-sized packet at the end of the tour, even before they hit the market. I was seven years old, but I knew they were cereal not fruit. Apparently, some other people think otherwise.
Ken has already blogged about the related, and dismissed, Crunchberry lawsuit. At the ABA Business Law Section Spring Meeting last weekend, my friend Teresa Harmon Wilton mentioned the Crunchberry case in her annual round-up of commercial law cases, and mentioned that the decision was based on the prior Froot Loops case. I looked down at my Blackberry, and that's when I realized there was an old Froot Loops case but I had just got notice of a new one.
Two old ones, actually.
In 2007, the United States District Court for the Central District of California dismissed a claim against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
In 2009, the United States District Court for the Eastern District of California dismissed a claim against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
On April 19, a complaint was filed in the United States District Court for the Northern District of California against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
There is clearly a pattern here. I would note that there is only one other federal court district in California, the Southern District in San Diego. Unless I missed a case there.
In the McKinniss case, the court dismissed claims for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Negligent Misrepresentation
- Breach of Express Warranty
- Unjust Enrichment
In the Videtto case, the court dismissed claims for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Intentional Misrepresentation
- Breach of Implied Warranties
In the Werbel complaint, plaintiff seeks damages for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Intentional Misrepresentation
- Breach of Implied Warranties
Each complaint referenced a study by the Strategic Alliance for Healthy Food and Activity Environments that found that foods it claimed suggested the presence of fruit did not in fact contain fruit. The courts have so far not cared much for this study, which doesn’t in any way demonstrate that anyone could be misled by the actual advertising on the package.
Raise your hand if you’re surprised at the fact that the same attorneys brought all three cases. Under our justice system, a plaintiff is not bound by the decision of a court to which he or she was not a party. An attorney is held to a different standard under Rule 11 of the Federal Rules of Civil Procedure. It will be interesting to see if there is anything that comes from expecting the same conditions to lead to a different outcome.
This post also appears on the Essential Nutrition Law Blog.
In an April 28 release, the Food and Drug Administration (the “FDA”) asked for comments and information from the public and other interested parties about front-of-pack (“FOP”) nutrition labeling and shelf tags in retail stores. The FOP is the part of the package label that is most likely to be examined under customary conditions of display for retail sale.
According to the FDA release, the FOP nutrition labeling effort aims to “maximize the number of consumers who readily notice, understand, and use point-of-purchase information to make nutritious choices for themselves and their families.” Specifically, the agency is seeking to learn more about:
• the extent to which consumers notice, use, and understand nutrition symbols on FOP labeling of food packages or on shelf tags in retail stores
• research that assesses and compares the effectiveness of particular approaches to FOP labeling
• graphic design, marketing, and advertising data and information that can help develop better point-of-purchase nutrition information
• how point-of-purchase information may affect decisions by food manufacturers to reformulate products
The FDA is accepting comments on this issue until July 28, 2010. Further information is available in a notice from the FDA and the Department of Health and Human Services announcing the establishment of a docket to obtain the data and other information that will be utilized in the FDA’s deliberations.
These recent developments did not appear out of thin air. As noted by our colleagues at the FDA Law Blog, in a March 3 letter to industry, the FDA said it is working to devise a front-of-pack labeling system that consumers can understand and use. In the meantime, the FDA announced plans to issue new draft guidance relating to front-of-pack calorie and nutrient labeling. The agency is also planning to issue draft guidance that would recommend nutritional criteria for foods that make “dietary guidance” statements (such as “Eat 2 cups of fruit a day for good health”) in their labeling. Dating back even further, in an October 2009 letter to the industry, the FDA said it was working on developing a regulation that would define the nutritional criteria that would have to be met by manufacturers making broad FOP or shelf label claims concerning the nutritional quality of a food.
Dr. Hamburg also noted that the FDA is in the process of notifying numerous manufacturers that their current labels are in violation of the law and subject to proceedings that will remove their misbranded products from the marketplace. Thus it appears the FDA is willing to back up this position with action. Given the increasing number of headlines such as this one regarding the ability of the armed forces to find able-bodied servicemen and women, the issue of how manufacturers communicate to consumers with respect to nutritional content is likely to be a subject of FDA scrutiny for the foreseeable future.
You've heard the phrase "buried in the bill," of course. Section 4205 of the "Patient Protection and Affordable Care Act," the health care reform bill President Obama signed on March 23, 2010, is contained on pages 1206-1214 of a 2407 page bill. It could hardly be more buried than that.
In very technical terms, Section 4205 inserts a new subclause (H) into Section 403(q)(5) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 343(q)(5), and adds a proviso (referring to the new subclause (H)) in Section 403(q)(5)(A). Section 403 is entitled "Misbranded Food" and clause (q) is entitled "Nutrition Information." Previously, subclause (5)(A) has exempted both restaurant food or takeout food from federal nutritional labeling requirements.
The new statute creates a new regime for labeling, in essence only requiring caloric and other information to be provided by restaurants covered by the act, by vending machines owned by persons covered by the act, and by those who opt in to the act.
The covered restaurants are those "part of a chain of 20 or more locations doing business under the same name (regardless of the type of ownership of the locations).and offering for sale substantially the same items." This appears to be intended to cover chain restaurants even if they are franchised, or held in separate subsidiaries.
The substance required to be disclosed is actually quite discrete. It must be:
- In a clear and conspicuous manner
- Adjacent to the name of the standard menu item
- Clearly associated with the standard menu item
- Of the number of calories contained in the standard menu item as usually prepared and offered for sale
In addition, there must be posted prominently on the menu "designed to enable the public to understand, in the context of a total daily diet, the significance of the caloric information provided on the menu." This would include information about a recommended daily calorie intake.
Finally, all of the standard information required under clause (q)(1)(C) and (D), meaning the standard information on calories derived from fat, plus total fat, saturated fat, cholesterol, sodium, total carbohydrates, complex carbohydrates, sugars, dietary fiber and total protein, must be provided somewhere in the restaurant and a prominent, clear and conspicuous sign stating this fact must be on the menu or menu board.
The caloric disclosure also applies to a salad bar, buffet line, cafeteria line, or similar self-service line, "adjacent to each food offered," on the basis of per displayed food item or per serving.
Food establishments are required to have a reasonable basis for their nutrient content disclosures.
There will be regulations on how to deal with different flavors or combinations (such as soft drinks from a fountain with many choices or pizza with different toppings). Regulations can also add to the list of nutrients required to be disclosed.
Exceptions to the disclosure requirements include items not listed on the menu, such as condiments, daily specials not on the menu for less than 60 days per calendar year, and food that is part of a customary marketing test but for a period of less than 90 days.
Food from vending machines where the machine does not allow the nutrition facts panel to be seen prior to purchase is required to have "in close proximity to each article of food or the selection button" a clear and conspicuous statement of calories in the article. Vending machines are covered if they are operated by a person who is in the busienss of owning or operating 20 or more vending machines.
The Secretary of Health and Human Services has one year to propose regulations.
An important aspect of the law is its preemption of inconsistent state laws. This applies to the establishments required to be included, and any others that choose to opt into the program. Thus, a smaller chain that crosses state lines where the two states have differing disclosure rules can choose to follow the federal rule and thus be able to print and display consistent menus,as well as train their personnel on only one set of rules. The preemption does not apply to labeling requirements in the nature of warnings concerning the safety of food, presumably including the California warnings about alcohol during pregnancy.
Until the rules come out, of course, the devil will remain in the details.
Sodium content issues continue to be a hotbed of activity in the food industry. Hot on the heels of the New York City-led National Salt Reduction Initiative (which we blogged about here), an article in the Wall Street Journal gives us an indication on how one major brand is responding to the pressure to reduce the sodium content in its products.
PepsiCo Inc., which manufacturers the popular Lay’s brand potato chips, is developing a new “designer salt” with crystals shaped and sized in a way that reduces the amount of sodium consumers ingest while snacking. PepsiCo’s hope is that this innovation will cut sodium in its Lay’s Classic brand by 25%, and perhaps even more in its seasoned chips. This move is also consistent with PepsiCo’s stated goal of reducing the sodium in its snack products by 25% by 2015. PepsiCo anticipates it could take up to two years before the new salt is introduced in the marketplace.
This effort reflects a growing recognition within the food industry of the pressure to reduce salt content. According to the Centers for Disease Control and Prevention, most Americans consume more than twice their recommended daily limit of sodium. Excessive salt intake has been linked to a litany of health problems, including high blood pressure and heart disease. The challenge for food manufacturers (specifically those who manufacture processed foods, which are the source of most of the sodium Americans consume), as the Wall Street Journal points out, is that any adjustments to sodium content will have an impact on the overall taste profile of the product. Thus, manufacturers must strike a delicate balance between health concerns and the marketability of their products to target consumers. With new U.S. dietary guidelines due to be released this year and rumblings that sodium intake recommendations will be lowered by a significant degree, we will continue to monitor this issue.
As we have discussed in recent postings (here and here), issues regarding the certification of food ingredients as generally recognized as safe (“GRAS”) by the Food and Drug Administration (the “FDA”) have been a hot topic in industry circles. Now, the Government Accountability Office (the “GAO”) has released a report encouraging the FDA to improve its oversight of GRAS food ingredients. Our colleagues from Hyman, Phelps & McNamara’s FDA Law Blog released an excellent post on this subject, so we will discuss the general findings and recommendations of the report here.
The GAO report includes findings that (1) the FDA’s oversight process does not help ensure the safety of all new GRAS determinations, (2) the FDA is not systematically ensuring the continued safety of current GRAS substances, and (3) the FDA’s regulatory approach allows engineered nanomaterials to enter the food supply without its knowledge. The report contains six specific recommendations for FDA action, encouraging the FDA to develop a strategy to:
- require any company that conducts a GRAS determination to provide the FDA with basic information about that determination;
- minimize the potential for conflicts of interest in companies’ GRAS determinations;
- monitor the appropriateness of companies’ GRAS determinations through random audits or some other means;
- finalize the rule that governs the voluntary notification program;
- conduct reconsiderations of the safety of GRAS substances in a more systematic manner; and
- help ensure the safety of engineered nanomaterials that companies market as GRAS substances without its knowledge.
Further, the report contains a general directive that if the FDA determines it does not have the authority to implement one or more of these recommendations, the agency should seek the authority from Congress. In its response to the report, the FDA, while not indicating any definitive posture on the GAO’s recommendations, was generally receptive to the findings and recommendations of the GAO. Given the prominence of the issue of GRAS certification as it pertains to a number of food and beverage products in the marketplace, we will continue to closely monitor this subject.
Coauthored by Susan Johnson
As we have blogged about previously, the Food and Drug Administration (the “FDA”) has been closely monitoring the appropriateness of additives to alcoholic beverages, with a particular emphasis on caffeinated alcoholic beverages. A recent release from the Alcohol and Tobacco Tax and Trade Bureau (the “TTB”) indicates that the two agencies could be working together to address this increasingly prominent issue.
The TTB release emphasizes that (1) the issue of whether or not an ingredient added to an alcoholic beverage is generally recognized as safe (“GRAS”) is within the jurisdiction of the FDA; (2) due to uncertainty as to how FDA regulations would apply to such products and the need for the TTB to provide clear guidance to the industry, the TTB believes it is appropriate to partner with the FDA on this matter so forthcoming TTB guidance will be clear and correct; and (3) as a result of the current uncertainty in the field, the TTB has temporarily suspended consideration of requests from industry members seeking guidance about the addition of vitamins and other nutrients, whether directly or indirectly through a flavor, to alcoholic beverages.
While each added ingredient will be analyzed individually by the FDA to determine whether or not it is GRAS, the agency’s action in November 2009 with respect to caffeinated alcoholic beverages could be an indication of its future posture. As we noted in our discussion of that issue, the agency explained in letters to manufacturers of caffeinated alcoholic beverages and a press release detailing the rationale for its action that under the Federal Food, Drug, and Cosmetic Act, any substance intentionally added to food is deemed unsafe and is unlawful unless its specific use has been approved by an FDA regulation, the substance is subject to a prior sanction, or the substance is listed as GRAS. While caffeinated alcoholic beverages carry with them a number of specific health and public policy concerns, this recent action indicates that manufacturers of alcoholic beverages with added ingredients should be prepared to justify their rationale for inclusion.
The motto of Consumers Union, the publisher of Consumer Reports, is "working for a fair, just and safe marketplace for all." The motto of Jim Prevor's Perishable Pundit is "where the subject may be perishable but the insight isn't." When Consumer Reports publishes a report, it nearly always becomes widespread news. When Jim Prevor publishes a report, it will be carefully read and commented upon within the confines of the produce industry, but it is not often that it reaches national attention. Let us now match the insight of Jim Prevor against the values of Consumers Union. The subject: bagged salad.
Bagged salad is one of the most successful take-home convenience foods ever. The produce industry loves it, because it greatly expands the market for fresh produce. The packaging industry loves it, because it only works with special packaging that extends the product's shelf life. The grocery industry loves it, because it is high-margin, high-volume product that goes in the produce aisle. And consumers love fresh salad they don't need to prepare. Win-win-win-win.
Until Consumers Union comes along.
Consumers Union has published a report that is entitled, "Bagged Salad: Better Standards and Enforcement Needed." A shorter article is in the March issue of Consumer Reports, entitled, "Bagged Salad: How Clean?" Both are based on a study, funded in part by Pew Health Group, that examined samples of bagged salad purchased, as Consumers Union ordinarily does, in grocery stores near its Yonkers, New York headquarters. It found levels of bacteria they called "indicator organisms" that exceeded standards set by a number of other countries, since there is no federal standard in the United States. No E Coli O157:H7, listeria or salmonella was found.
From the study, Consumers Union concluded that the United States needed to adopt food safety legislation pending in Congress (about which we reported here), needs to declare known pathogens in leafy greens "adulterants" (even though the study didn't find any), and set satefy standards for indicator organisms. In addition, Consumer Reports recommended that consumers should:
- Buy packages as far from their use-by date as possible
- Even if the salad is pre-washed, wash it again
- Prevent cross-contamination with other foods (although the link the article does not, as it appears to promise, go straight to a how-to list for that)
Since this is of great concern to the produce industry, Jim Prevor sent the report to Dr. Trevor Suslow of the University of California at Davis., a plant pathologist. Apparently a number of other readers of the report did so as well, because Dr. Suslow's response printed in the Perishable Pundit is broader than Jim's questions. Dr. Suslow makes some very cogent points about the Consumers Union report.
- "We eat lots and lots of microbes all the time." And generally don't die from them. Leafy greens are colonized by microbiota, not contaminated by them.
- The specific number of microbes on a leaf do not relate well to risk of illness.
- Higher numbers closer to the use-by date are expected, particularly if the product was subject to significant changes in termperature. More specifically,
Because all the samples were taken from retail stores, the numbers of bacteria (not that fact that they were present) may tell us more about the temperature history of the product than provide clear evidence of poor sanitation.
- Additional washing of pre-washed greens can lead to cross-contamination and is not recommended. He cited a 2007 study to that effect which concluded,
additional washing of ready-to-eat green salads is not likely to enhance safety. The risk of cross contamination from food handlers and food contact surfaces used during washing may outweigh any safety benefit that further washing may confer
His ultimate recommendation was that a consumer should check both the way the bagged salads are placed in the store (vertical in a row, not placed on top of one another in a stack) and get a feel for the temperature at which they are stored (both the air and the bag should feel "very cool").
As I read the report and the rejoinder from Dr. Suslow, it would seem the Perishable Pundit has the better of it. What Consumers Union proposed would seem to lead to a lot of regulation and attendant expense, leading to a false sense of security in consumers. What Dr. Suslow proposed would seem to enable consumers to make senisible choices for themselves.
A recent headline in the Huffington Post breathlessly importuned:
If you only read the headline, you might think this was some important information that might change your eating habits. If you read the article, you would discover a balanced set of conclusions from a fairly limited study.
First, the limitations. The study tested a total of 29 dishes at 10 chain restaurants, plus some frozen supermarket meals from nationally-distributed brands. That's hardly a study of "restaurant food" in general.
Now the facts from the actual article:
- The only item that came up at 200% over the published calorie count was Denny's "grits and butter." Denny's responded to the study by pointing out the serving size for its calorie count was a four-ounce serving and the one used in the study was a 9.5 ounce serving. So you can pretty much discount the headline already.
- The average variation in calorie counts was nowhere near 200%; it was 18%. Or, according to my calculation, 1111.11% overstated.
- The Food and Drug Administration permits a variation of 20%, so even with the Denny's grits and butter (which was, to repeat, apparently not an appropriate comparison), the food in the aggregate met the government standard.
- Reasonable minds--in the person of two professors of nutrition--can differ about whether the calorie numbers on restaurant menus should be relied on.
- Some of the variation can easily be explained by such simple things as the fact that a different amount of mayonnaise may come off the spatula on different sandwiches.
One thing I know is that the reporter, who in this case appears to have done a careful and balanced job, is not the headline writer, whose job is to grab attention. And grab attention the headline did. If you read the article, you learned a lot. If you only read the headline, you learned nothing and might have been misled.
For the record, when my name is on the byline, I wrote the headline, too.
By Guest Blogger Tyler Anderson
The issue of sodium content in food has been a hot topic in recent months, as our own Ken Odza has blogged about in reporting on the class action lawsuits filed against Denny’s in New Jersey and Illinois. Now the New York City Department of Health and Mental Hygiene is addressing the issue. On January 11, the Department unveiled the National Salt Reduction Initiative, targeted toward reducing the salt levels in products offered by restaurants and food companies.
This initiative reflects a voluntary goal led by New York City to reduce the salt levels in packaged and restaurant foods by 25 percent over five years. According to the initiative, accomplishing this benchmark would reduce the nation’s salt intake by 20 percent and prevent up to 800,000 premature deaths nationwide and 23,000 in New York City alone. According to Dr. Sonia Angell, director of the Cardiovascular Disease Prevention and Control Program at the Department, the average American adult consumes 3,400 to 3,500 milligrams of sodium per day, while most individuals need about only 1,500 milligrams to satisfy their health needs. The initiative has gathered a wide range of support from parties including the American Heart Association, the American Medical Association, Oregon Department of Human Services, and the Washington State Department of Health.
While the National Salt Reduction Initiative reflects a shot across the bow on the subject of sodium reduction in food products, some industry players have been moving in this direction on their own. However, as a recent Wall Street Journal article points out, many of these food manufacturers have been taking a measured approach with regard to the issue of sodium reduction and the manner in which they communicate such changes to consumers. For example, by next summer ConAgra Foods, Inc.’s Chef Boyardee canned pasta will have decreased its sodium content by roughly 35 percent over the last five years. Campbell Soup Co.’s original flavor of V8 100% Vegetable Juice has dropped its sodium content by 32 percent over eight years. Neither of these brands has made any mention of this decrease in sodium content on its packaging.
The reasoning behind this initially surprising silence is, according to food industry executives quoted in the Wall Street Journal article, that dramatic reductions in sodium content often result in different tastes and consumer dissatisfaction that manifests itself as reduced sales. According to Douglas Balentine, Unilever NV’s North American director of nutrition and health, a gradual reduction in sodium allows consumers to adjust to a less drastic change in taste as sodium content is reduced over time. This allows manufacturers to avoid problems such as those faced by the Kellogg Co. in the early 1980s when the company launched low sodium versions of its popular Corn Flakes and Rice Krispies breakfast cereals. According to Celeste Clark, senior vice president of global nutrition for Kellogg, consumers were not satisfied with the flavor of the products and the new brands were scrapped after four years. This balance between health benchmarks and industry performance will continue to shape the regulation of sodium content as this issue continues to grow in prominence.
By Guest Blogger Joel Dahlgren
The dairy industry continues to move forward with its objectives of creating a sustainable future and of responding to concerns for green house gas emissions. On December 15, 2009, Secretary of Agriculture Tom Vilsack and Thomas Gallagher, CEO of Innovation Center for U.S. Dairy (Innovation Center) and Dairy Management Inc. (DMI) signed a Memorandum of Understanding (MOU) providing for coordination between the USDA and the Innovation Center.
The dairy industry launched a sustainability initiative in 2008. The initiative’s first priority is to reduce greenhouse gas emissions twenty five percent (25%) by the year 2020. Leaders from approximately eighty percent (80%) of the dairy chain – including farmers, cooperatives, processors and manufacturers – have endorsed this commitment.
The Memorandum of Understanding establishes a relationship reflecting the commitment of the USDA and the Innovation Center to create a sustainable future for the dairy industry. Two goals are recited in the Memorandum of Understanding. First, the parties will work toward reducing green gas emissions as described above. Second, the parties will accelerate and streamline the process for adopting anaerobic digesters by U.S. dairy producers through USDA programs.
Click here for the Innovation Center’s website.
We’re in the “crystal-ball” season—time to look forward and assess what’s coming in 2010 and beyond. The most likely scenario: more of the same and landmark change.
More of the Same
The last few years have seen growth in both the number of food-borne illnesses detected and the variety of foods affected. This is because more resources are being put into detection (though the CDC recently reported an overall decline in epidemiological capacity by the states) and technology is continuing to advance (think Next Generation Sequencing). There’s little reason to believe these trends will abate in 2010. Expect more outbreaks. Expect to hear about recalls of products not previously implicated in food-borne illness.
Nobody doubts that we’re in the midst of the most significant legislative and regulatory changes in food safety in generations. Most believe that Congress will pass some form of food safety legislation (e.g., S 510 or HR 2749) in the new year. It will likely include the most comprehensive food safety reform in decades. Among other things, this legislation is likely to give FDA mandatory recall power and great authority for risk-based inspections, and require FDA to create a traceability program.
FDA and USDA are already pushing the boundaries of their current authority to become more aggressive on food safety and labeling enforcement. Examples include USDA moving toward classification of Salmonella as an adulterant, more aggressive rules on ground beef safety, and increased retail enforcement. FDA is already studying how traceability could work, being more aggressive in identifying products and retailers in the event of recalls, reexamining the effectiveness of current nutritional labeling requirements, and investigating whether front of pack nutrition labeling (FOP) practices need to be regulated.
And on the heels of legislative reform and increased regulatory enforcement come the lawyers. Action by the government creates new avenues for the plaintiffs’ bar. Food litigation will likely increase in prevalence both in product liability claims (i.e., food contamination) and in putative consumer fraud class claims into 2010 and beyond.
When Congress passes a statute and the Secretary of Agriculture issues a notice in the Federal Register interpreting the statute, it might seem self-evident that someone who believes that interpretation is wrong can appeal that interpretation in court and get a judgment on the merits. On November 18, the Ninth Circuit Court of Appeals said "not so fast."
The decision is a valuable reminder that just because you might allege a wrong, you will not necesarily be entitled to a remedy. The Ninth Circuit does a good job of making sure that the threshold question of standing must be answered satisfactorily before any other allegations in a complaint are reached. When, as here, it finds it not satisfied, the case is over.
The case was Levine v. Vilsack, and it involved what seemed at first a straightforward issue of statutory interpretation. The Humane Methods of Slaughter Act of 1958 ("HMSA of 1958") is the bedrock federal statute dealing with the means of slaughter of livestock. The key provision of the act, 7 U.S.C. Section 1902, provides as follows:
No method of slaughtering or handling in connection with slaughtering shall be deemed to comply with the public policy of the United States unless it is humane. Either of the following two methods of slaughtering and handling are hereby found to be humane:
(a) in the case of cattle, calves, horses, mules, sheep, swine, and other livestock, all animals are rendered insensible to pain by a single blow or gunshot or an electrical, chemical or other means that is rapid and effective, before being shackled, hoisted, thrown, cast, or cut; or
(b) by slaughtering in accordance with the ritual requirements of the Jewish faith or any other religious faith . . . .
The simple question presented in Levine was whether the phrase bolded above, "and other livestock", included fowl. Almost from the time the statute was first enacted, and most recently in 2005, the Secretary of Agriculture ruled that it did not. Levine along with a host of other plaintiffs, including The Humane Society of the United States, sued to overturn this interpretation.
The district court dismissed the case, treating it as a relatively straightforward case of statutory interpretation and agency discretion. The Ninth Circuit (perhaps wary of Justice Scalia's well-known dislike of legislative history) took a different tack.Continue Reading...
By Guest Blogger Matti Neustadt Storie
It’s that time of year again – time to be thankful for all that we have and to reflect on those who don’t have as much. Many people consider working at soup kitchens and donating to local food banks as a way to help. But what liability attaches to those who donate food? Can you get rid of that can of smoked oysters that’s been in the back of the pantry for four years? What if the food you donate is bad? Or people get sick after eating it?
The federal government and most states have considered this and do not want fear of litigation to prevent people from donating to food banks. “Good Samaritan” food donation laws that immunize good-faith donors of food from both criminal penalty and civil liability exist at both the state and federal level. The Bill Emerson Good Samaritan Food Donation Act (the “Act”) is the federal law, and most states (such as Washington) model their acts after it. The Act limits the liability of food donors absent gross negligence or willful misconduct. Except in cases where a donor donates food that does not meet state or federal regulations regarding quality or labeling, it is unlikely that a contractual release or waiver would be effective in overriding these limitations because of public policy concerns. Other states (such as Oregon) have similar laws, but with slightly different language.
The Act states that a person is not subject to civil or criminal liability arising from the nature, age, packaging, or condition of “apparently wholesome food” that the person donates in good faith to a nonprofit organization for ultimate distribution to needy individuals (e.g., a food bank). “Apparently wholesome food” is defined as “food that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.” So that four-year-old can of smoked oysters may still be a valid donation!
The Act is drafted very broadly, and the immunity from civil or criminal liability is regardless of who is making the claim – neither the food bank nor the ultimate consumer of the food will be able to sue to donor. Furthermore, the Act indicates that it cannot be construed to create liability due to noncompliance with any aspect of the law. This makes it unlikely that a court will find liability based on mere negligence, for example, if a food product was negligently mislabeled such that it would not technically be “apparently wholesome food.” Absent gross negligence or willful misconduct, no liability will attach.
That said, don’t go digging up your recalled spinach and beef from the past year. Liability may still be imposed when the donor acts in bad faith, with gross negligence, recklessness, or intentionally. And no, that doesn’t mean you can draft a waiver to have the food bank accept the recalled food – in most states a pre-injury release or waiver will not prevent a defendant from being held liable for damages due to gross negligence under public policy arguments. Throw out food that is known to be spoiled, contaminated, or otherwise unfit for human consumption. One would hope this common sense advice is so obvious that it need not be said, but you never know ….
So pack up your excess pantry food – or go out and get some fresh stuff – for your local food bank. Nonperishable foods such as dried beans, peanut butter, canned soups, canned vegetables, and dried pastas are always welcomed. Many food banks will also take perishable foods such as hot dogs, ground beef, butter, eggs, and even (in some states) processed game. If you were lucky enough to bag wild game this season but can’t fit it all in your freezer, contact your local food bank to see if they can accept it. And if you live in southern Illinois or the St. Louis metro area, contact the Food Pantry at St. Mark in Belleville. Tell them Pastor Ron’s daughter blogged about them – Merry Christmas, Dad!
On November 13, the FDA notified nearly 30 manufacturers of caffeinated alcoholic beverages that the agency intends to look into the safety and legality of their products. As the FDA explained in a news release announcing this action, under the Federal Food, Drug, and Cosmetic Act any substance intentionally added to food, in this case caffeine in alcoholic beverages, is deemed unsafe and is unlawful unless its specific use has been approved by an FDA regulation, the substance is subject to a prior sanction, or the substance is Generally Recognized as Safe (GRAS). To date, the FDA has only listed caffeine as GRAS as an ingredient for use in cola-type beverages in concentrations specified by the agency.
The FDA noted in its release that it is not aware of any basis on which manufacturers may have concluded that the use of caffeine in alcoholic beverages is GRAS sanctioned. Consequently, in its letters to notified companies, including City Brewing, Gaamm Imports, Inc., and United Brands Company, Inc., the agency asked that within 30 days the notified companies “produce evidence of their rationale, with supporting data and information” for their conclusion that the use of caffeine in their products is GRAS or prior sanctioned. If the FDA determines that the use of caffeine in the alcoholic beverages is not GRAS or prior sanctioned, the agency stated it would take “appropriate action to ensure that the products are removed from the marketplace.”
This issue has been fermenting (pun intended) for some time. In the past year, alcoholic beverage industry leaders Anheuser-Busch and MillerCoors agreed to discontinue their popular caffeinated alcoholic beverages Tilt, Bud Extra, and Sparks, and further agreed not to produce any caffeinated alcoholic beverages in the future. In late September 2009, the FDA received letters from eighteen attorneys general and one city attorney and five scientists expressing concerns about caffeinated alcoholic beverages. Among the chief policy concerns cited by these stakeholders was the increasing popularity and consumption of caffeinated alcoholic beverages by college students, coupled with general health risks associated with excess consumption of both alcohol and caffeine.
Manufacturers of alcoholic beverages had been operating under the TTB guideline that caffeine was a permitted but restricted ingredient, and had been warned by TTB and FTC about prohibited and/or deceptive advertising practices related to the effects of combining caffeine and alcohol. If the FDA takes the strong position that caffeine is an illegal additive, these advertising concerns related to caffeine and alcohol will disappear. The TTB and FTC will likely continue to focus scrutiny on other less common alcoholic beverage additives that have been treated like caffeine, such as ginseng, guarana and taurine.
And consumers will turn back to the original Red Bull and vodka for their caffeinated alcoholic beverage.
Take-Aways from November 3 Webinar: Making Good Marketing Claims: Product Labeling Pitfalls, Third-Party Certification and "Green Washing"
Tuesday, November 3, we held our second webinar in a three-part series on bringing sustainable food products to market. Thanks again to our presenters and attendees. The recorded webcast was archived and is accessible at this link. Click here to access a PDF copy of the presentation slides.
Take-aways from the second webinar include:
• With the exception of the FDA’s policy on “natural” claims, it has been silent on “green claims.”
• “Natural” could be hottest claim on the market but is becoming controversial. Food companies should continually monitor the marketplace to see which claims are drawing challenges.
• Food companies should pay attention to consumers union findings regarding eco-label credibility.
• While third-party certification may not help every food business, certification is a tool that supports your brand and your marketing/sales strategy.
• Retail leaders in sustainability, such as Burgerville, aspire for continuity of sustainability in each link in its supply chain.
• To understand the FTC green guidelines companies need to appreciate three key points: substantiation, specificity and qualification.
• To avoid “green washing” issues, food companies need to understand the complex matrix of federal, state, local and foreign statutes, regulations and guidelines governing “green” advertising.
I hope you can join me, Steve Marinkovich from Propel Insurance, my colleague at Stoel Rives, Anne Glazer, and Peter Truitt from Truitt Bros., Inc. on November 17, at 9 am PST, noon EST, (live Twitter feed at #sustainlaw) for the last webinar in the series as we discuss the following:
• Preventing and Dealing with Consumer Fraud, Unfair Trade and False Advertising Claims from Consumers and Competitors
• Real-Life Businesses Approaches to Sustainability, Product Labeling and Marketing
• Coping with Increased Risks of Food-Borne Illness from Local or Small Farm Products
• Insurance Coverage You Need, Think You May Have but Don’t Have or Think You May Want but Shouldn’t GetContinue Reading...
American Conference Institute (ACI) recently held its latest conference on food-borne illness litigation. The conference has been a fairly intimate gathering of the nation’s lawyers, insurers and experts involved with food-borne illness litigation.
This year, I had the privilege of moderating an in-house counsel “think tank.” The panel was composed of lawyers from a nice cross-section of food businesses: Yum Brands, Hormel, Fresh Express and SUPERVALU (though for each, food-borne illness litigation is a rare event) A slide-deck from the panel can be found here.
Also among the presenters at this year’s conference were Center for Disease Control’s (CDC) Dr. Arthur Liang and USDA/FSIS representative Dr. Dan Engeljohn. Both presentations provided fascinating insight into changes afoot in food safety enforcement and policy at the federal level. Here are some of the take-aways:
• “Outbreaks Waiting to Be Discovered” – Dr. Liang opined that, based on surveilled illnesses, most food-borne illness outbreaks are not presently discovered. He believes that recent data shows that there are perhaps 2-3 times more outbreaks nationally than what’s been uncovered over the last few years.
• Food Safety Progress Being Undone by Retail Deli Operations – FSIS says there has been a “steady increase in risky behavior at the retail level.” According to Dr. Engeljohn, budget authority is being sought to intervene with retailers, particularly smaller supermarket deli operations.
• Negative Tested Product Can Be Considered Adulterated - FSIS will be issuing a policy soon that for the first time will consider a “negative tested product to be determined adulterated” under circumstances where an associated product tested positive for pathogens.
• Non-0157 STECs - FSIS will be finalizing methodology to detect non-0157 Shiga Toxin-Producing Escherichia coli (STEC).
Learn About Who Is Setting Sustainability Standards and How to Make Good Sustainability Claims: Register for the 11/3 Sustainable Foods Webinar
If you haven’t already, register here for the second in a three-part webinar series on environmentally friendly sustainable food products, to be held at 9 am PT, Tuesday, November 3. This installment of the series will focus on sustainability standards, third-party certification and avoidance of “green-washing.”
The webinar will feature:
- FDA regulatory lawyer Ricardo Carvajal from Hyman, Phelps & McNamara;
- Roberta Anderson from Food Alliance, the nation’s leader in setting third-party sustainability standards for food production;
- Alison Dennis from Burgerville, a traditional quick-service restaurant on the cutting edge of sustainability; and
- Advertising lawyer Jere Webb from Stoel Rives.
The webinar is interactive, and those listening live will be able to submit questions. We will strive to answer all questions either during the broadcast or off-line directly with listeners.
If you missed the first installment, you can read about the take-aways and replay the webinar on demand here. The slide deck can be downloaded here.
Kristin Choo has written a piece for the ABA Journal tracking the history of food safety regulation, recent outbreaks and current legislation pending in Congress. I am grateful to be mentioned in the piece. The article can be found at this link.
Ms. Choo writes:
Litigation is likely to increase as a pumped-up FDA, an arm of the Department of Health and Human Services, identifies more outbreaks of food-borne illness and collects more evidence about their causes. Meanwhile, many companies are likely to struggle, at least initially, with stricter requirements to develop safety plans, disclose business records when outbreaks occur and improve procedures for tracing products, according to Kenneth M. Odza, a member of Stoel Rives in Seattle, who litigates food safety cases and writes a blog on the subject.
Ms. Choo also includes a summary of information (see below) derived from CDC documented outbreaks (two or more people with the same illness after eating the same contaminated food) from 1990 to 2006 broken down by category of food. Note that nearly 50% of illnesses documented are from produce or "multi-ingredient." Produce and "multi-ingredient" account for about twice the number of illnesses as beef and poultry combined.
|Breads and Bakery||179||4,904|
|Luncheon and Other Meats||196||7,108|
On July 31, the FDA issued draft guidance on three categories of produce: tomatoes, leafy greens and melons. Comments on the drafts are due, according to Hyman, Phelps & McNamara P.C.'s FDA Law Blog, by November 3 at www.regulations.gov using docket numbers FDA-2009-D-0346 (tomatoes), FDA-2009-D-0347 (melons), or FDA-2009-0348 (leafy greens). They may also be submitted directly to the FDA at Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, using the same docket numbers to identify comments.
The purpose of the guidance is to provide advice on the FDA's current thinking of the best practices to minimize contamination, comply with legal requirements and identify and stop outbreaks as soon as possible. The guidance is intended to cover all stages of food production and handling up to the final retail sale of either raw or prepared foods.
The tomato guidance is particularly detailed. It covers everything from selecting the field to grow, including assessing the uses of nearby land, to detailed hygienic recommendations for those with access to the fields, to harvesting practices, including documentation to facilitate product tracing, to packing and repacking, storage and transportation, and preparation by food service providers. A special section covers greenhouse production.
The guidance is based on practices developed by the produce industry with the assistance of the FDA, but does not necessarily agree with the practices used in the industry. Consider this discussion of "top icing" of melons. The FDA notes, "Melons are typically top iced after cooling as a means of temperature control during transport and distribution." The first recommendation, though, is to ditch the practice entirely.
- Employing alternative means of keeping melons cool because top icing is not particularly effective in cooling or keeping melons cold.
It will be interesting to see the comments and how the FDA responds to them as the process continues.
By Guest Blogger Joel Dahlgren
Last week the Justice Department and U.S. Department of Agriculture announced that the two federal agencies will hold joint public workshops to explore competition issues affecting agriculture in the 21st century, including the appropriate role of the federal government in antitrust and regulatory enforcement. The first workshop will be held in 2010. Some workshops will be held in Washington, D.C., while others will be held regionally around the country.
The public and press are invited to attend these conferences. Written comments may be submitted ahead of time at email@example.com. Paper copies of comments should be submitted in addition to electronic copies, preferably by courier or overnight services. Agendas and schedules for the workshops will be posted at www.usdoj.gov/atr.
The federal government has a long, firmly held interest in agricultural markets, the competition in those markets, and concentration of the firms that compete in those markets. Just since the turn of the century, the General Accounting Office (GAO) has produced 15 reports on these issues. The latest report prepared by the GAO on the subject of concentration and competitive issues in agriculture was released a little over a month ago on June 30, 2009. The GAO summarized its findings to Senators Kohl and Grassley as follows:
In summary, we found the following:
• Concentration generally has increased at all levels of the food marketing chain in all agricultural sectors since the 1980s. At the farm level, less than 2 percent of farms accounted for 50 percent of total sales in 2007. At the food processors’ level, in general, a small number of companies accounted for a large and growing portion of sales in each of the five major agricultural sectors. For example, in the pork sector, the market share of the largest four hog slaughtering firms increased from 36 percent in 1982 to 63 percent in 2006. In addition, at the retail level, the share of grocery store sales held by the largest four firms more than doubled, from 16 percent in 1982 to 36 percent in 2005.
• While real annual per capita food expenditures have increased since 1982, households now spend a smaller share of disposable income on food. Total annual per capita food expenditures rose from $3,358 in 1982 to $3,888 in 2007, in constant 2008 dollars. Meanwhile, household spending on food decreased from 13 percent of disposable incomes in 1982 to 10 percent in 2007. Since 1982, overall food prices and food prices in each of the five major agricultural sectors have increased about as much as prices for consumer goods and services overall. However, from July 2008 through December 2008, food prices increased faster than the prices of other goods and services. Since then, food prices generally have not changed significantly.
• Since 1982, farmers have generally received higher monthly prices for their commodities, but these prices have increased less than food prices and inflation in the broader economy. Specifically, prices farmers received, including for beef, pork, dairy, and grains, increased by 34 percent from January 1982 to April 2009. For the same period, food prices rose by 128 percent, and prices in the general economy rose 102 percent. Commodity prices increased significantly in 2008, reaching a high of 68 percent above their 1982 levels in July 2008, but have declined since then.
• The empirical economic literature has not established that concentration in the processing segment of the beef, pork, or dairy sectors or the retail sector overall has adversely affected commodity or food prices. Most of the studies that we reviewed either found no evidence of market power or found efficiency effects that were larger than the market power effects of concentration. While a few studies found some evidence of market power, it is unclear whether this market power was caused by concentration or some other factor. All of the experts we spoke with said that concentration probably did not cause the 2008 increase in commodity and food prices, which were more likely due to factors such as higher energy costs and growing global demand for grains. Experts generally said that concentration is likely to increase in the future. Some said further increases in concentration may raise greater concerns in the future about the potential for market power and the manipulation of commodity or food prices. One expert said further increases in concentration would continue to generate efficiency gains and be beneficial. Enclosure II provides further information on the views of experts, and enclosure IV lists the studies we reviewed prices in these sectors.
The report (GAO-09-746R, June 30, 2009) is titled U.S. Agriculture: Retail Food Prices Grew Faster Than the Prices Farmers Received for Agricultural Commodities, but Economic Research Has Not Established That Concentration Has Affected These Trends. It can be found at http://www.gao.gov/new.items/d09746r.pdf.
U.S. House of Representatives approved HR 2749 moments ago. This action followed some confusion yesterday where it was brought to the floor needing a 2/3 vote and failed. Here’s a link to a report by the Rules Committee including the language of the bill as approved today by the House. Changes to the bill from what was proposed by the Energy and Commerce Committee include amendments aimed at concerns by smaller farmers of the $500 “facility registration fee,” performance standards and record keeping.
The legislation has been the subject of heavy debate inside and outside the beltway. Here’s a link to the Editorial in the New York Times in support of the bill. The Grocery Manufacturer’s Association (GMA) also has expressed support in a June press release for the bill as marked-up by the Energy and Commerce Committee. From some opposed to the bill, here’s a link with an impassioned argument from yesterday.
Note that the registration requirements in the bill as currently written “does not include farms; private residences of individuals, restaurants, other retail food establishments; nonprofit food establishments in which food is prepared for or served directly to the consumer.”
The bill further exempts from registration farms that sell food primarily at farmers markets. Also exempts farms that “manufacturer grains or other feed stuffs” grown on those farms and distributed to other farms for “consumption as food by humans or animals on such farm.”
Also note that traceability provisions remain. Section 107(c)(2) recognizes that work remains on the regulatory level for FDA to collect information, and develop technology and systems, and establish pilot programs before traceability becomes a reality.
Last fall, the British grocery chain J Sainsbury sought to introduce a "Halloween" range of fruits and vegetables in its stores. Included would be ‘Witches fingers' - carrots with more than one finger, ‘Zombies brains' - undersized cauliflowers and ‘Ogres toenails' - bendy cucumbers amongst others. While selling such vegetables for Halloween decoration might have been a good idea, Sainburys had a different agenda, a "Save Our Ugly Fruit and Veg" campaign to highlight some of the European Commission's most mocked regulations, those requiring that all fruits and vegetables in 36 categories meet marketing standards in order to be sold anywhere in the European Union.
As of July 1, the regulations have been rescinded as to 26 of the 36 categories. And so, at least in some countries, the nobbly carrot and the bendy cucumber are back on store shelves. If anyone wants to buy them.
Ostensibly, the repeal of these regulations was made to cut red tape and to reduce waste of edible food in harsh economic times. But others have a different take on what the effect of the repeal of these regulations will be.
By Guest Blogger Jere Webb
It is evident that virtually every business now is trying to position itself as being “green”. For a discussion of restrictions on “green advertising”, particularly the FTC’s green ad guidelines (the “Green Guides”), and similar efforts at the state level, see “Green Claims Advertising – What You Can Say and What You Can’t”. The FTC is reviewing the Green Guides and likely will amend them in the near future. For comments submitted in the review process and additional information, see Green Guides.
The newer arena is green trademarks. The United States Patent and Trademark Office is now routinely rejecting, based on descriptiveness, multiword trademarks, that start with or contain the word GREEN. An example is the mark GREEN JOURNEY for hybrid cars. But in the same application, the applicant sought to register for clothing, and the Trademark Office accepted the mark, but with a disclaimer of the word GREEN. It found that the two word mark was merely “suggestive” of clothing, not “descriptive”. See "Green" Trademarks Face Hostile Climate in USPTO.
For an example of a green mark that passed muster, the Trademark Trial and Appeal Board (TTAB) recently reversed an examining attorney’s descriptiveness refusal for the mark GREEN INDIGO for clothing, finding it to be an “incongruous” term for clothing and therefore merely suggestive and not descriptive. The case is In re Jones Investment, Inc. (TTAB Jan. 21, 2009.)
The lesson is: If you want to include the word “GREEN” in a trademark, some careful review and advice from a trademark lawyer is in order.
The Stoel Rives Agribusiness Group has sent out an alert reminding farmers and ranchers of the USDA's program that allows you to participate at the county level in discusssions relating to agricultural decisions in your community. The link to the website with materials needed to submit nominations (which opened on June 15) is here.
Ken, Bryan and I are all members of the Agricubusiness Group, along with lawyers experienced in all manner of topics related to agriculture. You can subscribe to its alerts here.
For food sellers interested in promoting a “sustainable” brand and inspiring food safety confidence in their consumers, meet Food Alliance. Food Alliance “is a nonprofit organization that certifies farms, ranches and food handlers for sustainable agricultural and facility management practices.” It bills itself as “the most comprehensive certification program for sustainably produced food in North America.”
I’ve recently joined the Food Alliance Board of Directors (in fact, I’m headed to Portland today for a board meeting). My hope is to assist Food Alliance in becoming more widely accepted and mainstream. Credible third-party certification, such as Food Alliance provides, offers a transparent pathway to sustainability of our food supply and consumer confidence in food safety.
Food Alliance takes a holistic approach that is broader and more dynamic than organic certification, which does nothing to address food contamination from pathogens such as Salmonella, E. coli, and Listeria (in fact, many experts believe that organically grown food may be more likely to be contaminated by these pathogens). By way of example, Food Alliance certification standards, among other things, address “soil and water quality,” “ensure the health and humane treatment of animals,” “conserve energy and water,” and “ensure quality control and food handling safety.”
For more on why a holistic, independent third-party certification correlates with food safety (and accompanying consumer confidence), I’d suggest reading this op-ed piece co-authored by Food Alliance Executive Director Scott Exo, which was written earlier this year in the wake of the PCA peanut recall.
We wrote recently about the food safety legislation coming out of Henry Waxman’s House Committee on Energy and Commerce. That legislation, H.R. 2749, has passed out of committee and been reported to the full House for a vote. When the vote will occur is anybody’s guess. Reuters quotes Chairman Waxman as saying, “I am hopeful that before too long, we can have a comprehensive food safety bill on President Obama’s desk.”
Court Rules That Retailers Have No Duty to Investigate Suppliers Compliance with Organic Regulations
An important ruling was issued last week dismissing claims that milk produced by an organically certified dairy and labeled as organic was not really organic. Plaintiffs in the action asserted violations of various states’ laws because they claimed that they paid more for the milk because it was labeled as "organic.”
A federal judge in the Eastern District of Missouri granted a Rule 12(b)(6) motion to dismiss on a multitude of cases pending against the dairy, various retailers selling the dairy products and others (originally these suits were filed in various federal courts around the country but were consolidated for pretrial purposes by the United States Judicial Panel on Multi-District Litigation or MDL).
The judge ruled that claims against the dairy were preempted because a “conflict exists between federal and state law” (otherwise known as “conflict preemption”). As explained in the opinion, conflict preemption exists where “a party’s compliance with both federal and state law would be impossible or where state law would pose an obstacle to the accomplishment of congressional objectives.” Here, the court found that for “plaintiff’s claims to succeed, the Court would have to invalidate the regulatory scheme established under the OFPA [Organic Foods Production Act] and NOP [National Organic Program].” The court concluded that if plaintiffs were to prevail “producers would be liable even where fully certified and authorized to use these terms and seals.”
For the retailer defendants, the judge ruled that because plaintiffs’ claims against the dairy are preempted, “the retailer Defendants cannot be liable.” But the court went further and dealt explicitly with the plaintiffs’ claims that the retailers “should have investigated” the dairy’s activities to ensure compliance with the OFPA and NOP. The court rejected these arguments:
The Retailer Defendants did not have any duty to inspect [the dairy’s] facilities, or the facilities of any of their other organic producers. Imposing such a requirement “would place an undue burden on the distributor who is least likely to have access to such information.”
This should be good news for organic retailers. Hopefully, this decision will reduce their legal exposure to consumer labeling claims going forward.
Last week, members of the U.S. House of Representatives Committee on Energy and Commerce released a discussion draft of the “Food Safety Enhancement Act of 2009.”
The draft proposes beefing up the FDA registry of “all food facilities serving American consumers” and charging every facility $1,000 per year to fund FDA food safety activities. The new legislation would expand the types of facilities that need to register by eliminating certain exemptions from the 2002 Bioterrorism Act, though for now it appears to maintain exemptions for retailers, restaurants, farmers and nonprofits.
The proposal’s most ambitious and controversial proposal may be traceability.Continue Reading...
This week the Obama administration announced the launch of a new website for the recently formed food safety working group. Obama announced the formation of this group in March in the wake of the high-profile food safety issues surrounding PCA peanut products.
This website will assist in tracking the efforts of the working group. As discussed previously on this blog, this group is expected to make recommendations aimed at detection, awareness and government reorganization. Possible examples include increasing funding to states to monitor food-borne illness, combining FDA and USDA food safety efforts, reexamining mandatory recall authority, increasing retail enforcement and implementing more aggressive consumer warnings.
What is not clear is whether the working group will look beyond just detection, awareness and reorganization to bolder initiatives that may result in less consumer illness and less legal exposure for food sellers. Bolder initiatives could include funding for irradiation, consumer food safety education, and fast-track development and implementation of technology that can sample food products for whole colonies of microorganisms.
The Senate Health, Education, Labor and Pensions Committee had moved up her confirmation hearings because of the imminent threat of H1N1 influenza, and she sailed through both the heaings and action on the Senate floor with bipartisan accolades.
There are few things that would be better for the country than for those bipartisan accolades to continue to be earned by her during her entire tenure in this incredibly challenging job. We wish her luck.
Nobody disputes that consumers have a favorable view of organic certification in foods. Consumers generally believe that organic foods are healthier, and many believe they taste better. Yet, among food scientists, uncertainty prevails as to whether organics are safer, especially raw fruits and vegetables.
Absence of synthetic fertilizers is a primary distinction between organic and non-organic foods. And, from a safety standpoint, the absence of pesticides is the only provable claim that organic foods are healthier. But does the absence of one hazard imply the existence of another?
The prevailing pesticide substitute for organic foods is manure or composted manure. Dangerous pathogens such as E. coli O157 reside in manure. Some guidelines exist for composting manure. Unfortunately, as I learned recently in a presentation by Dr. Francisco Diez-Gonzalez at the University of Minnesota Food Science Department, these guidelines were written a decade ago, before science began to understand the prevalence of E. coli in the environment.
Science now understands that E. coli O157, for example, can persist for years in soil, let alone a more rich environment like manure. In some cases, it may be virtually impossible to rid of an environment of E. coli O157, short of treatment with non-organic substances such as tear gas or asphalt.
Outside of the 2006 spinach outbreak, there have been few food-borne illness outbreaks associated with organic fruits or vegetables. As organic farming continues to grow and detection of food-borne illness increases, the only question is how long it will be until another well-publicized outbreak. When it happens, will consumers continue to believe organic foods are safer? Will the industry be ready with evidence that proves the benefits of organic farming outweigh its risks?
At the recent Nebraska Governor’s Conference on Ensuring Food Safety, Dan Engeljohn from FSIS (USDA) announced a number of significant policy changes. FSIS’s changes in part are consistent with those previously announced under the last administration and in part represent the Obama administration’s new priorities. Those include (among other things):
1. Supermarket Enforcement – FSIS has not emphasized retail (i.e., supermarket) surveillance and enforcement since the early 1990s. FSIS perceives an increase in beef processing (e.g., grinding) at the retail level. As discussed previously on this blog, FSIS also perceives a failure by many retailers to maintain proper production logs. Supermarkets should expect the following:
A. Unannounced FSIS inspectors will be directed to pull samples on the spot if an inspector walks into a supermarket without good recordkeeping or with unsanitary conditions.
B. New regulations will be aimed specifically at retailers.
2. Non-O157 STECS to Become Adulterants – FSIS appears to be moving aggressively toward declaring at least certain non-E. coli O157 Shiga Toxin E. coli (STECs) as adulterants. FSIS is targeting strains known as E. coli O26, 103, 111, 121, 45, and 145. These strains account for 82% of non-O157 strains detected by PulseNet. Dr. Engeljohn explained that FSIS is looking carefully at these strains and is heading toward their regulation. But he commented that so far information collected about those infected with non-O157 STECs shows that these strains may be less virulent than O157.
3. Attention to Primal Cuts – At least two factors are driving FSIS to develop stricter regulation of primal cuts. First, FSIS learned in the last couple of years that needle-tenderizing injections of steaks are now commonplace in the industry. Second, FSIS is concerned about bench trim.
4. More Aggressive Release of Information to the Public – Dr. Engeljohn also indicated that FSIS will be more aggressive in releasing outbreak information sooner. No longer will FSIS await the kind of confirmation it previously required before requesting recalls or going public with outbreak information.
While the Obama administration has yet to announce an appointment for the FSIS’s Under Secretary of the Office of Food Safety, Dr. Engeljohn indicated that these initiatives are only the beginning. FSIS will be more aggressive on perceived issues of food safety.
The Food and Drug Administration is seeking to increase its budget for Fiscal Year 2010 by nearly 20 percent more than FY 2009 – to $3.2 billion. The Washington Post reports that the increase is the largest in the agency’s history.
The FDA’s spending request includes $259.3 million to be devoted to the “Protecting America’s Food Supply” initiative. The agency plans to, among other things, strengthen the safety and security of the food supply chain, increase food inspections, and reinspect food facilities that fail to meet FDA’s safety standards. The Associated Press reports that the FDA’s proposed budget would put 222 more food inspectors in the field, for a total of 1,022. A summary of the FDA’s FY 2010 budget is available here.
Senator Charles Schumer (D-NY) is expected to introduce legislation today to strengthen U.S. food safety. Newsday.com is reporting that Sen. Schumer’s bill will call for a director of food safety oversight who would be a senior-level director at the Department of Commerce. The proposed director would focus exclusively on food safety.
On Thursday, March 19, the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee held another hearing on Peanut Corporation of America and the Salmonella outbreak. A focus of the hearing was the different choices made by Nestle USA, which had refused to buy PCA peanuts, and the companies testifying at the hearing, including Kellogg and King Nut, which had.
Nestle, when considering buying peanuts from PCA, had sent its own inspectors to PCA's plants. They found, according to a report of the hearing in the Washington Post, some rather damaging items:
rat droppings, live beetles, dead insects and the potential for microbial contamination
Nestle, not surprisingly, declined to buy from PCA.
At the hearing, witnesses from Kellogg and King Nut were questioned as to why they had not done their own inspections, instead relying on inspections by AIB, the American Institute of Baking, which were paid for by PCA, and which apparently tipped PCA about when it was coming.
The question nobody seemed to ask--and no one from Nestle was at the hearing--was why Nestle could not have made the results of its inspection public at the time? If there are "rodent droppings in the break room cabinets", and the company is selling peanuts to other members of the general public, just not through Nestle, isn't this something that should be made known to someone?
One answer lies in the fear of the various torts that come under the heading of "trade libel." Nestle is a big company, and even though it presumably trusts its inspectors (and makes important business decisions based on their reports), it must recognize that it is a potential "deep pocket" for lawsuits. Thus, to report publicly what its inspectors found, or even to make that information avaiable to others in the food industry, is to risk a major lawsuit.
The flip side should also be considered. If you are PCA, and someone broadcasts to the world that you have rat droppings in your break room cabinets, you are likely to experience significant losses, regardless of whether the report is true, and whether the presence of rat droppings in your cabinets affects the actual safety of your food. What we do know is that in 2008 PCA began shipping peanuts that killed people. The rat droppings found in the 2002 Nestle inspection presumably had nothing to do with those deaths, nor are we aware of any deaths or illnesses from PCA peanuts in the interim. Finally, we do not of course know whether there are other suppliers Nestle or others who conducted their own inspections rejected, and what they did with the news of rejection. Nestle, for instance, didn't write off PCA when it rejected it in 2002; it checked out another PCA facility in 2006 (and came to similar conclusions).
Then there is the question of what contractual rights and obligations existed between PCA and Nestle. Did PCA require Nestle to sign a non-disclosure agreement when it allowed it into the plants? Any well-advised company would require such an agreement at the very least to protect proprietary technology. Thus, Nestle may have been contractually bound not to reveal the results of its inspections.
As food safety legislation is being considered, the issue of tort liability and the right to use contracts to silence someone who knows about your dirty facility should be faced. It is not as simple as "all inspections should be public", but it is also unlikely to remain as business as usual. We publicize the results of government restaurant inspections without putting all restaurants that fail to pass inspection out of business.
Update to today’s earlier post: the Georgia House of Representatives unanimously passed a bill today that would strengthen food safety laws in Georgia. The Georgia House and Senate now will resolve minor differences in the proposed legislation and send a final version to Georgia Gov. Sonny Perdue for his signature.
Also today, the AP reports that the chief executive of Kellogg Co. is urging food safety reforms, including written safety plans for all food companies and annual inspections of facilities that make “high-risk foods.” The AP article notes Kellogg lost $70 million worth of peanut products in the recent salmonella outbreak linked to Peanut Corporation of America.
The Georgia House of Representatives today considers proposed legislation to strengthen food safety rules in that state. Among other things, Senate Bill 80 includes a provision that would require food makers to alert state inspectors within 24 hours if a plant’s internal tests show products are tainted. Experts say no other state has such a rule.
The bill already has passed the Georgia Senate. House approval would mean Georgia Gov. Sonny Perdue soon could sign the bill into law.
The bill was introduced following the salmonella outbreak linked to Peanut Corporation of America. Investigators say the company knowingly shipped salmonella-laced products even after PCA's internal tests showed the products were tainted. State law did not require the company to share those test results.
The Obama administration placed food safety front and center over the weekend. In his weekly radio address, President Obama on Saturday announced new leadership at the Food and Drug Administration and the creation of a panel to toughen food safety laws.
Characterizing outdated food safety laws and the lack of resources at the FDA as “a hazard to public health,” Mr. Obama announced the appointment of Dr. Margaret Hamburg, a former New York City health commissioner, as FDA commissioner, and Baltimore Health Commissioner Dr. Joshua Sharfstein as the FDA principal deputy commissioner. The president also unveiled the Food Safety Working Group – a group that will consist of cabinet secretaries and senior officials to advise the president on how to update and enforce food safety laws.
President Obama also announced two additional food-safety steps on Saturday: closing a loophole in federal regulation that allows some diseased cows to be slaughtered for food, and a billion-dollar investment to modernize labs and increase the number of food inspectors.
Read a transcript of the president’s weekly radio address, download the .mp3 audio, or view the video below.
The National Grain and Feed Association has reported to its members that Senator Richard Durbin (D-IL), is likely to reintroduce food safety legislation next week. Senator Durbin has introduced similar bills in prior Congresses. Likely, co-sponsors include Senator Edward M. Kennedy, chairman of the Senate Health, Education, Labor & Pensions (HELP) committee, and Republican Sens. Richard Burr of North Carolina, Lamar Alexander of Tennessee and Judd Gregg of New Hampshire. According to NGFA, the bill would require participants in the food chain to develop food safety plans to identify hazards that could adversely affect human or animal health.
Because of the peanut butter recall, there may be an attempt to take the bill straight to the Senate floor, bypassing committee hearings.
In the wake of the latest Salmonella recall, Congress is holding well-publicized food safety hearings, and food safety may be rising on the priority list of the Obama administration. One question that arises is whether the perceived crisis in food safety will lead lawmakers and the public to revisit the option of food irradiation. The New York Times recently ran a nice piece on the topic. The article begins:
Before the recent revelation that peanut butter could kill people, even before the spinach scare of three summers ago, the nation’s food industry made a proposal. It asked the government for permission to destroy germs in many processed foods by zapping them with radiation.
That was about nine years ago, in the twilight of the Clinton administration. The government has taken limited action since.
The article quotes Suresh Pillai, director of the National Center for Electron Beam Research at Texas A&M University, as saying “It’s unnecessary for people to be getting sick today with pathogens in spinach or pathogens in peanut butter.” He describes the potential for irradiation of food as “humongous” and says that “[w]e have the technologies to prevent this kind of illness.”
As discussed previously on this blog, irradiation has wide support in the food industry and even has the support of plaintiffs’ lawyers such as Bill Marler, who has written a lengthy three-part series on the topic.
The question may not be whether irradiation is another tool that can prevent food-borne illness, but rather why is irradiation not being used on a wide-scale. Mr. Pillai likened fears of irradiation to “early phobias about the pasteurization of milk.” Aside from lengthy delays in FDA approval, consumer fear may be the problem. The only solutions may lie in (1) a joint effort between industry and lawmakers to educate the public on the benefits and safety of food irradiation, and (2) action by Congress and the FDA to help provide industry with the resources and political cover to begin using irradiation on a wide scale.
As previously discussed on this blog, the FDA recently approved irradiation for iceberg lettuce and spinach. We pointed out that "irradiation may provide an added level of protection from food-borne illnesses such as salmonella and E. coli. When used in combination with other state-of-the-art food handling practices, irradiation should dramatically reduce the chances of transmitting food-borne illnesses to consumers."
Now, it appears that at least some in the plaintiffs' community agree that irradiation of fresh produce may be a good thing. Bill Marler, one of the leading plaintiffs' attorneys in the food liability area, is running a series of in-depth pieces on his blog on irradiation.
Mr. Marler's conclusion in part II of his series echoes what we've posted in this blog :"In summary, food irradiation is not a 'silver bullet' for food safety. However, the increasing problem of illnesses and deaths associated with consumption of fresh produce, including lettuce and spinach, emphasizes the need for an intervention."
With a fair amount of fanfare , last week the FDA approved irradiation of iceburg lettuce and spinach. For restaurant owners, the question is whether they should invest in this process.
Like pasteurization, irradiation may provide an added level of protection from food-borne illnesses such as salmonella and E. coli. When used in combination with other state-of-the-art food handling practices, irradiation should dramatically reduce the chances of transmitting food-borne illnesses to consumers.
The FDA estimates that irradiated fruits and vegetables will cost two to three cents more per pound than nonirradiated products. Irradiation does not substitute for any other food safety practices or investments. Indeed, without added precautions against cross-contamination or field-to-fork regulation of the supply chain, irradiation provides little benefit.
Perhaps more significant than cost is the question of consumer acceptance. The good news is that the FDA does not require labeling of irradiated foods by restaurants (as it currently does for supermarket products). Yet some organic foods advocates are passionate about what they believe to be harmful effects of irradiation and are already lobbying restaurants and consumers to steer clear of irradiated foods.
At this point, arguments against irradiated foods are similar to those against pasteurization and appear to be grounded more in emotion than in science. In weighing issues of consumer acceptance and lowered risk to human health, businesses should understand that unlike economics and politics, in food safety, perception is not reality. Failure to irradiate will likely result in more personal injury claims and a significant threat to the business and the brand.