Post Sugary Cereal Buyers Get Ok on $15M False Ad Deal (subscription to Law360 required)

  • On February 24, 2021, a California federal judge tentatively approved a settlement over nutrition-related claims for breakfast cereal whereby Post would establish a $15 million non-reversionary common fund to compensate a nationwide class of consumers who purchased Raisin Bran, Honeycomb, Honey Bunches of Oats, or Waffle Crisps, and Post would  also refrain from using claims including “less processed,” “no high fructose corn syrup,” “natural,” and “wholesome” on boxes of cereal where 10% or more of the calories come from added sugar.  An award for fees, costs, and expenses will be determined in a final hearing scheduled for June 23, 2021.
  • The same team of attorneys also filed proposed class action lawsuits in 2016 with a common lead plaintiff in the Northern District of California against cereals marketed by General Mills and Kellogg involving similar false-advertising claims.  As we previously reported, the case against General Mills was dismissed in June 2020, based on the judge’s finding that plaintiffs could not possibly have been misled because the amount of sugar in the cereals is clearly disclosed on the product labels.  Further, a settlement has not yet been reached in the class action lawsuit against Kellogg (subscription to Law360 required).
  • Although legal results are mixed, and complex issues surround the impact on health of added sugars in a single product and a product’s role in the total diet, nutrition claims that could imply the product is healthy seem risky for foods with added sugars.  Meanwhile, FDA has not indicated how it will act on a citizens petition (discussed here) requesting a regulation to establish disqualifying levels of added sugar that would prohibit the use of a “healthy” claim.
  • New York Governor Andrew Cuomo announced on February 22, 2021 that businesses seeking to operate as cannabinoid hemp processors, retailers, or distributors can now apply for a license through the New York State Department of Health (NYDOH). Any business intending to manufacture, distribute, or sell cannabinoid hemp products in New York State must be licensed.
  • Manufacturers can choose between two types of licenses, which are valid for two years. One license allows processors to extract or isolate cannabinoids, including cannabidiol (CBD), from hemp to create an oil, distillate, isolate, or other product and manufacture the intermediary product into a finished product. The second type of license is for manufacturers that purchase intermediary products and manufacture them into a finished product. Applicants must provide documentation including a description of the products, information about the source hemp, and evidence showing the facility follows current good manufacturing practices. Manufacturers seeking to engage in direct retail sale must separately apply for a retail license.
  • As we have previously reported, the NYDOH published proposed regulations to implement the NY Cannabinoid Hemp Program in October 2020. The rules provide for facility manufacturing guidelines, packaging and labeling standards, and laboratory testing specifications. We will continue to report on developments regarding CBD marketing and manufacturing.
  • On February 16, 2021, the U.S. District Court for the Northern District of Illinois Eastern Division granted final approval of a class action settlement, incentive reward, and attorneys’ fees and expenses that totaled more than $650,000.  The settlement resulted from a 2018 lawsuit where plaintiffs argued that FGF Brands USA Inc. and FGF Brands, Inc. (defendants) made misleading claims regarding the baking process of their various naan products.
  • Plaintiffs filed a lawsuit in 2018 against the defendants who sell naan Indian flatbread, challenging its “tandoor-baked naan” and “tandoor oven-baked to honor 2,000 years of tradition” claims as being false and misleading.  Defendants baked the naan on a conveyor belt in a gas-heated commercial oven, not in traditional tandoor ovens, which are made from clay or stone.  Plaintiffs claimed that there is no substitute for the flavor imparted by baking naan with a traditional stone or clay oven and that the defendants misled plaintiffs into believing that the baking process was devoid of automation or machinery and of a higher quality than mass-produced naan breads.
  • Defendants also are facing legal action over similar claims in Canada where plaintiffs filed a complaint alleging that it is deceptive for the defendants to equate the company’s conventional oven to a tandoor oven.  The case is an example of a relatively rare challenge of a food preparation claim, outside of the “natural” claim context.
  • On February 19, a California federal judge agreed to dismiss a proposed class action lawsuit that alleged Hostess Brands Inc. misled consumers into believing its carrot cake mini doughnuts contained actual carrots. U.S. District Judge Sallie Kim granted the motion after the parties filed a joint stipulation which dismissed the plaintiff’s claims with prejudice, and without prejudice to all putative class member claims. Neither the stipulation nor the order stated the reason for the dismissal.
  • The lawsuit was filed on August 25, 2020 by Elena Lauchung-Nacarino and alleged that Hostess failed to disclose that no real carrots were used as ingredients in the mini doughnuts. Lauchung-Nacarino argued that consumers expect carrot cake to contain a substantial amount of real carrots, and that the Hostess mini doughnuts are the only major carrot cake product without any real carrots.
  • As previously reported, Hostess responded to the complaint by arguing that “carrot cake” refers to the taste of the doughnuts, rather than the presence of carrots as an ingredient, and that the absence of carrots in the ingredient statement, along with there being no picture of carrots on the label, shows there are no actual carrots in the pastries. Further, Hostess argued that plaintiff’s allegations are undermined by the fact that plaintiff first bought the doughnuts in 2019, when the product label had a disclaimer saying “naturally and artificially flavored carrot cake mini donuts.”
  • We have previously blogged about the fallout from a Congressional report on the level of heavy metals in baby foods, including class-action lawsuits against Gerber Products Co. and Plum, PBC (see blog post) as well FDA’s response to the report (see blog post).
  • Unsurprisingly, these lawsuits were just the beginning of a trend and in recent weeks a series of new class-actions have been filed, each alleging similar consumer deception claims relating to the presence of heavy metals in baby foods.
    • A class action was filed against Gerber Products Co. and Hain Celestial Group (Hain) in the North District of Illinois for allegedly omitting and concealing the presence of dangerous levels of heavy metal in the baby food products they sell.
    • Another class action was filed in the Northern District of Illinois against Hain for allegedly misleadingly marketing baby foods such as Earth’s Best Organic Banana Raspberry & Brown Rice Fruit & Grain Puree as healthy and free of dangerous substances.
    • Two class-action lawsuits were filed in the North District of New York (see here and here) against Beech-Nut Nutrition Co. for allegedly misrepresenting Beech-Nut baby foods are “real food for babies” and failing to disclose the presence of dangerous levels of heavy metals.
    • A class-action lawsuit was filed against Nurture, Inc. in the Southern District of New York for allegedly misleadingly marketing Happy Baby Superfood Puffs as healthy and nutritious for babies and failing to disclose the presence of heavy metals.
  • Given the recent filings, we have not yet seen briefing or any judicial decisions on the merits of the claims. Keller and Heckman will continue to monitor and report on these class-action lawsuits against baby food manufacturers as well as any other updates regarding the response to the Congressional report.

 

  •  FDA will evaluate claims and other information on a dietary supplement’s website to establish the product’s “intended use.”  In general, a dietary supplement is allowed to make claims about having an effect on the “structure” or a “function” of the human body.  If FDA finds that the product is intended for use in the cure, mitigation, treatment, or prevention of disease, it will be deemed a “drug” under section 201(g)(1)(B) of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”).  FDA routinely takes enforcement action against such unapproved new drugs.
  • In a February 18, 2021 Constituent Update, FDA announced that it had issued warning letters to 10 companies for illegally selling dietary supplements, containing a variety of ingredients, that all claim on their websites, as well as their Amazon product pages in some cases, to cure, treat, mitigate, or prevent depression and other mental health disorders as follows:
    • ProHealth Inc. for Full Spectrum™ St. John’s Wort Extract41T for claims involving anxiety and mild-to-moderate depression;
    • Dr. Garber’s Natural Solutions for Dr. Garber’s Depression Relief for claims involving depression and postpartum depression;
    • FDC Nutrition Inc. for Inositol 100% Pure Free Form for claims involving anxiety, blood sugar control, insulin sensitivity, and fertility in women;
    • Blossom Nature, LLC for products containing St. John’s Wort with claims including “St. John’s Wort is effective as prescribed antidepressants but with no side effects;”
    • Native Remedies dba Silver Star Brands for MindSoothe Drops and MindSoothe Capsules with claims involving depression, insomnia, loss of appetite, binge eating, overeating, “loss of interest in activities that are normally enjoyable,” and “difficulty concentrating, remembering details, and making decisions;”
    • Wholesome Wellness for its Natural Anxiety & Depression Relief product with claims involving “7 healing herbs” that act as a “natural antidepressant,” including Gotu Kola (wound healing and disease prevention), Rhodiola Root (depression and anxiety), St. John’s Wort (mild-to-moderate depression), Ashwagandha Root (anxiety and depression), Lemon Balm Leaf (a “range of medical disorders,” anti-inflammatory compounds, antithrombotic properties), Ginkgo Leaf (to cure diseases, protects against neuronal damage), and Eleuthero Root (diabetes, cognitive disorders, and frequent colds);
    • SANA Group LLC for Sleep Sana “Sleep Drops” and “Sleep Shots” products claiming to contain ingredients for treating various diseases and symptoms, including GABA (anxiety, attention deficit hyperactivity disorder (ADHD), blood pressure, pain), L-Tryptophan (insomnia, sleep apnea, depression, anxiety, facial pain, premenstrual dysphoric disorder (PMDD), ADHD, Tourette’s syndrome), Valerian (sleep disorders), and Melatonin (seasonal affective disorder (SAD), “winter depression”);
    • Mountain Peak Nutritionals for Mood Support, which the website says contains ingredients such as 5-hydroxytryptophan (5-HTP) (“increases serotonin levels,” “equal effectiveness compared to drugs like Prozac, Paxil, and Zoloft”), B-complex vitamins (“often shown to be deficient in depressed patients”), ginkgo extract (“antidepressive effects”), and St. John’s Wort (“just as effective as pharmaceutical antidepressants in alleviating symptoms of mild to moderate depression, and with very few side effects”);
    • Lifted Naturals for Mood Boosting Probiotic and claims for “PREBIOTIC, GOS– the ONLY prebiotic that’s been proven to help with anxiety,” and treatment of postpartum depression; and
    • Enlifta LLC for “Enlifta Mood Elevator,” a “doctor designed” “antidepressant” and “Enlifta Anxiety” involving claims for “7 proven ingredients that remedy severe anxiety,” including Chamomile Flower (anti-inflammatory), English Lavender Flower Powder (insomnia and anxiety), and Passion Flower Herb Powder (“One study showed it worked as well as a common prescription medication for treating anxiety, but had fewer short-term side effects”).
  • FDA’s February 18, 2021 letters note that depression and other diseases are not amenable to self-diagnosis or treatment without the supervision of a licensed practitioner and, therefore, it is impossible to write adequate directions for a layperson to use the products safely for the intended purposes.  To reduce the risk of potential FDA enforcement action, all dietary supplement manufacturers should ensure that they only make appropriate structure/function claims for their products.
  • The U.S. Food and Drug Administration (FDA) and Department of Agriculture (USDA) published a press release yesterday underscoring the international consensus that no credible evidence shows that food or food packaging is a source of viral transmission of SARS-CoV-2, the virus that causes COVID-19.
  • The press release highlights a September 2020 opinion from the International Commission on Microbiological Specifications for Foods that stated, “Despite the billions of meals and food packages handled since the beginning of the COVID-19 pandemic, to date there has not been any evidence that food, food packaging or food handling is a source or important transmission route for SARS-CoV-2 resulting in COVID-19.”  This consensus is consistent with literature reviews and research in other countries, and the fact that in the 100 million cases of COVID-19 worldwide, no epidemiological evidence suggests food or food packaging is a source of transmission to humans.
  • The U.S. Centers for Disease Control and Prevention (CDC) together with the U.S. Occupational Safety and Health Administration (OSHA) have provided guidance for food manufacturers to reduce the risk of spreading COVID-19 between workers. These guidelines complement the USDA and FDA food safety requirements that all U.S. food manufacturers must follow, such as the current Good Manufacturing Practices and preventative controls that focus on good hygiene practices and worker safety.
  • Hawaii Governor David Ige (D.) has introduced House Bill 994 (HB-994) and its companion Senate Bill 1148 (SB-1148), which would require manufacturers or wholesale dealers of sugar-sweetened beverages, as well as sugary syrups or powders for beverages, to pay a two cents per fluid ounce fee.  Governor Ige stated that these bills aim to lower consumption of sugar-sweetened beverages and thereby prevent weight gain, obesity, prediabetes, diabetes, tooth decay, and heart disease in the state.
  • Under HB-994 and SB-1148, a “sugar-sweetened beverage” is defined as any non-alcoholic beverage, carbonated or noncarbonated, that is intended for human consumption and contains any added “caloric sweetener.”  The bills define a caloric sweetener as “any substance that contains calories suitable for human consumption, that humans perceive as sweet, and includes, sucrose, fructose, glucose, other sugars, or fruit juice concentrates.”  Beverages that consist of one hundred percent fruit juice or vegetable juice with no added caloric sweetener, milk without added caloric sweetener, milk substitutes without added caloric sweetener, dietary aids, and infant formula would not be subject to the fee.
  • Hawaii has tried to pass similar legislation in previous years, but the bills have expired before making it through the full legislative process.  Cities, including Philadelphia and Berkeley, have introduced similar measures in the past, and there are mixed opinions on whether the measures have been effective.
  • On February 16, the FDA published a response about questions about levels of heavy metals in baby food, as indicated in a Congressional report released on February 4. Our summary of that report is available here. In the response, the FDA states that toxic elements, such as arsenic and lead, are present in the environment and may enter the food supply through soil, water, or air. Thus, they cannot be completely avoided in the fruits, vegetables, or grains that are used in baby foods, juices, and infant cereals. Such elements also cannot be avoided through the use of organic farming practices.
  • The FDA highlighted the following in the response:
    • Consumers should know that FDA scientists routinely monitor levels of toxic elements in baby foods, along with other foods consumed, through the Total Diet Study. Further, the FDA monitors baby food under FDA’s compliance program for Toxic Elements in Food and Foodware, and Radionuclides in Food and through targeted sampling assignments.
    • The FDA takes steps to reduce levels, such as using science to set action levels, making data public, and working with industry on identifying effective mitigation strategies. For example, food manufactures have made progress in arsenic reduction through selective sourcing and testing, as evidenced by FDA sampling of infant rice cereal since 2011. Further, the Agency has published a final guidance that sets action levels for inorganic arsenic in rice cereal for infants. According to the FDA, infant rice cereal is safer than it was a decade ago because of these efforts, and the Agency expects that such levels will continue to be reduced because of emerging science and good manufacturing practices.
    • The FDA has multiple ongoing Import Alerts for toxic elements in food, including arsenic in fruit juice, bottled water, and dietary supplements, in order to prevent foods and dietary supplements with high levels of heavy metals from entering the US.
    • The FDA provides consumers with actionable advice to limit exposure to toxic elements from food. For example, consistent with the Congressional report’s recommendations, the FDA has communicated advice about the importance of feeding infants a variety of foods. Fortified rice cereal is a good source of nutrients for infants, but it should not be the only source.
  • Keller and Heckman will continue to monitor and report on any developments.

 

  • Kombucha products that contain 0.5% or more alcohol by volume (abv) at any point in the production process are currently classified as beer (see 27 CFR Part 25see also TTB Kombucha Guidance) and therefore subject to federal alcohol excise taxes and regulations. The Kombucha Act, which would allow Kombucha to contain up to 1.25% abv without being taxed or regulated as alcohol, will reportedly be reintroduced to Congress during this legislative session.
  • Kombucha is made by adding sugar to brewed tea and then fermenting the sugary tea with yeast and bacteria cultures. The fermentation process generates alcohol at levels that can be in excess of 0.5% abv.
  • The Act, which was originally introduced in March of 2019, defines Kombucha as a beverage (1) fermented solely by a symbiotic culture of yeast and bacteria, (2) containing a maximum of 1.25% abv, (3) sold or marketed as kombucha, and (4) derived from “sugar, malt or malt substitute, tea, or coffee” and not more than “20 percent other wholesome ingredients.” Beverages meeting this definition would not be considered an alcohol subject to taxation and regulatory oversight by the Alcohol and Tobacco Tax and Trade Bureau (TTB). This increased ceiling on alcohol content will provide increased manufacturing flexibility to the industry, which has struggled with modifications to the fermentation process to ensure that less than 0.5% alcohol is produced.
  • Keller and Heckman will continue to monitor and report on an updates to the proposed legislation.