Tyler Anderson
Tyler Anderson is an associate in the Corporate Securities and Finance group of Stoel Rives LLP. Tyler’s food and beverage industry practice focuses on FDA regulatory compliance, product labeling, and marketing issues. Prior to joining Stoel Rives, Tyler was an extern in the legal department of NIKE, Inc., where he worked on a variety of legal issues in the marketing arena.
The Show Goes On: USDC Allows Vitaminwater Lawsuit to Proceed
In an opinion issued on July 21, 2010, Judge John Gleason of the United States District Court for the Eastern District of New York largely denied the defendant’s motion for dismissal and held that 10 of the 13 claims in a class action suit brought against Coca-Cola for alleged unlawful health claims on its Vitaminwater drinks could proceed. The claims that still must be examined in court include allegations of misleading advertising, fraudulent business acts, and unfair methods of competition.
The plaintiffs in the class action, which include the health advocacy group Center for Science in the Public Interest (“CSPI”) as co-counsel, contended that Vitaminwater’s labeling and marketing is misleading because it (1) communicates a number of purported health benefits (including healthy joints, optimal immune function, and reduced risk of chronic disease), drawing consumer attention away from the significant amount of sugar (33 grams per bottle) in the product; (2) portrays Vitaminwater as healthy when it is essentially a snack food that provides nutritional benefits because it has been specifically fortified to do so; and (3) suggests that Vitaminwater contains nothing but vitamins and water.
While the court concluded, citing applicable Food and Drug Administration (“FDA”) rules and commentary, that sugar was not a “disqualifying nutrient” under applicable FDA regulations, the plaintiffs’ latter two claims were found to accurately describe violations of FDA regulations, and accordingly may serve as a non-preempted basis of state law liability.
The FDA regulations restricting health claims or implied claims of healthiness related to foods that meet certain minimum nutrient levels, colloquially termed “the jelly bean rule,” were developed in an effort to prevent food producers from encouraging the consumption by consumers of junk food by fortifying the food in question with nutrients. The “jelly bean rule” is applicable only to (1) health claims, and (2) nutrient content claims that use the word “healthy” to suggest that a food may help consumers maintain healthy dietary practices because of its nutrient content. Finding that Vitaminwater’s labeling contains claims in each of these two categories, the court ruled the plaintiffs could proceed with this claim.
The plaintiffs alleged Vitaminwater’s labeling is misleading because it uses a product name that includes two of the product’s ingredients (vitamins and water), but fails to mention another notable ingredient (sugar). FDA regulations on this subject recognize that such product names have the potential to mislead consumers. Thus, the court held that the plaintiffs were allowed to pursue this claim. In the aftermath of this ruling, Coca-Cola released a statement expressing their confidence that the plaintiffs’ claims are without merit and will ultimately be rejected. Given that the implications this case could carry into the growing functional food and beverage segments of the market, we will continue to track it closely.
AMA Calls for More Accurate Fat Labeling Rules
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.
FTC Announces Intent to Issue Compulsory Process Orders Regarding Marketing of Food and Beverages
In a May 25, 2010, Federal Register Notice, the Federal Trade Commission (the “FTC”) announced its intention to issue compulsory process orders to 48 food and beverage manufacturers, distributors, marketers, and quick service restaurant companies. The proposed orders seek information concerning the companies’ marketing expenditures targeted toward children and adolescents, and nutritional information about the companies’ food and beverage products marketed to children and adolescents.
The proposed orders, issued under Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b), will seek information in six categories, including:
• The categories of foods marketed to children (ages 2-11 years) and adolescents (ages 12-17 years);
• The types of measured and unmeasured media techniques used to market food products
to children and adolescents;
• The amount spent to communicate marketing messages about food products to children and adolescents;
• The nature of the marketing activities used to market food products to children and adolescents;
• Marketing to children and adolescents of a specific gender, race, ethnicity, or income level; and
• Marketing policies, initiatives, or research in effect or undertaken relating to the marketing of food and beverage products to children and adolescents.
By procuring this information, the FTC will be able to evaluate the impact of self-regulatory efforts on the nutritional profiles of foods marketed to children and adolescents. In addition, the FTC seeks to determine and analyze how companies allocate their promotional activities and expenditures among various media and for different food products. Interested parties may submit comments on or before June 24, 2010.
This FTC action is a follow-up to its July 2008 report entitled, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation. That report represented the findings of a 2006 FTC study of promotional activities related to food and food products targeted toward children and adolescents. It found that, while room for improvement existed, the food and beverage industries had made significant progress on this front since the FTC and the Department of Health and Human Services co-sponsored a Workshop on Marketing, Self-Regulation & Childhood Obesity in 2005. As everyone from the First Lady to the World Health Organization is focused on the impact of marketing on childhood obesity, the results of this FTC action will bear monitoring.
Raw and Uncut: Wisconsin Governor Vetoes Raw Milk Bill
“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.
Court Cuts Back Claims In Great Pomegranate Dispute
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.
Introducing the Essential Nutrition Law Blog
Our colleague Mike Mangelson and a team of Stoel Rives lawyers spanning numerous practice specialties have recently launched the Essential Nutrition Law Blog. Stoel Rives attorneys work closely with companies engaged in the research, development, production, and sale of dietary and nutritional supplements, energy and nutrition beverages, herbal supplements and functional foods, and the Essential Nutrition Law Blog will be an excellent resource for interested parties to look to for the most recent legal developments in the field. We at the Food Liability Law Blog are happy to add another member to our blogroll, and are looking forward to learning from and working with our colleagues at the Essential Nutrition Law Blog to deliver timely and consequential reports on the hot topics in our fields.
FDA Seeks Public Comment Regarding FOP Labeling
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.
PepsiCo Developing "Designer Salt" in Effort to Reduce Sodium Content
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.
GAO Report Urges FDA to Improve GRAS Oversight
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.
On the Horizon: TTB and FDA to Jointly Consider Additives to Alcoholic Beverages
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.
