• The House of Representatives passed the PFAS Action Act to regulate the use of perfluoroalkyl and polyfluoroalkyl substances (PFAS) on July 21, 2021. The bill’s passing follows FDA’s recently published update on testing of PFAS in food to better understand the presence of PFAS in the food supply. As our readers know, PFAS are known for their grease, water, and oil-resistant properties. They are used in a variety of consumer products, including food-contact materials.
  • As passed by the House, the bill would (1) require the Environmental Protection Agency to add two PFAS, perfluorooctanoic acid (PFOA) and perfluoroactanesulfonic acid (PFOS), to the list of hazardous substances within one year and assess all other PFAS within five years to determine whether they should be designated as hazardous substances; and (2) require EPA to determine whether PFAS should be designated as toxic pollutants under the Clean Water Act. Designation as a hazardous substance under the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA) triggers remediation for and cleanup of sites impacted by the substances but does not regulate use of hazardous substances. The bill would also require the EPA Administrator to monitor PFAS in drinking water and permit a “PFAS-free” indication on nonstick cookware.
  • The bill passed 241-183, with 23 Republican members joining Democrats, and will now move to the Senate. The Act is a revived version of a 2020 bill of the same name that passed the House in January 2020 but died in a Republican-led Senate.
  • On July 13, 2021, U.S. District Judge Rodolfo A. Ruiz II approved (subscription to Law360 required) a $16 million class settlement to resolve claims that Kraft Heinz Foods Co. engaged in deceptive labeling with its Maxwell House and Yuban ground coffee brands.  As we previously reported, the class action lawsuit alleged that Kraft Heinz “grossly” exaggerated the number of cups of coffee that could be made from the contents of the package.
  • As part of the settlement, Kraft Heinz will remove the labeling language at issue or revise the serving ranges to correspond to the cups of coffee that can be brewed when following the single cup or 10 cup directions.  Kraft Heinz will reimburse consumers at $0.80 per unit, up to a maximum of $25 per household, or up to six units without proof of purchase, according to the order.  In addition, Kraft Heinz will pay $3.9 million in attorney fees and costs.
  • Judge Ruiz concluded that the settlement is “fair, adequate, and reasonable,” provides monetary relief for the class, and ensures that Kraft Heinz will remove or correct the challenged claims.  If the case had proceeded, Judge Ruiz explained that there would likely be a “battle of experts” with an uncertain outcome and that class certification issues would have been highly contested.  Judge Ruiz also stated that the settlement “avoids the risk that class members would not obtain anything should the case be decided on summary judgment or at trial in favor of [Kraft Heinz].”
  • On July 18, a proposed class action lawsuit (Subscription to Law360 required) was filed against Dreyer’s Grand Ice Cream Inc., the makers of Haagen-Dazs vanilla milk chocolate almond ice cream bars. The complaint claims that the company misleadingly packages the product as containing “milk chocolate,” when it actually contains “milk chocolate with vegetable fat coating.”
  • Illinois consumer Lawrence Rice alleged that Dreyer’s failed to inform consumers that it uses coconut oil as a substitute for some cacao beans to make the chocolate in the vanilla milk chocolate almond ice cream bars. In the complaint, Rice states that the Standards of Identity (SOI) for “milk chocolate” at 21 CFR 163.130 require that milk chocolate be made from cacao beans with a small amount of optional ingredients, like dairy and nutritive carbohydrate sweeteners, but that vegetable fats (oils) are excluded. Rather the complaint argues that “where a food has some chocolate but is mainly vegetable oils” it falls under the SOI for “milk chocolate and vegetable fat coating” at 21 CFR 163.155 and should be disclosed to the consumer.
  • In the complaint, Rice states that the product label presents a “half-truth” and compares the ice cream bar packaging, which contains pictures of chocolate chunks, a vanilla flower, and almonds, against the ingredient list, which declares coconut oil as the least predominant ingredient but is not included in the label graphics. Rice argues that “[t]he product does not contain imitation vanilla or almond alternatives, which makes it especially misleading that it contains alternatives to chocolate in the form of vegetable oil.”
  • Rice looks to represent a class of similarly situated Illinois residents who also purchased the ice cream bars. He is asking for the court to award monetary and statutory damages, as well as injunctive relief directing Dreyer’s to cure product labels of the alleged misrepresentations.
  • On July 15, 2021, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s dismissal of class-action lawsuit alleging that Trader Joe’s misleadingly labeled its store brand honey as “100% New Zealand Manuka Honey.”
  • The Manuka flower is believed to have antibacterial properties and provide significant health benefits. Plaintiffs’ independent testing revealed that the honey contained only between 57.3% and 62.6% honey from Manuka flower nectar (as estimated by the pollen content of the honey). Plaintiffs alleged that they had been deceived into believing that the honey was made completely from the Manuka flower because of the “100% New Zealand Manuka Honey” representation and because “Manuka Honey” was listed as the sole ingredient on the ingredient list.
  • The Ninth Circuit disagreed that the labeling is deceiving. The Court noted that it is impossible to have honey derived 100% from a single flower because bees may pollinate different types of flowers and beekeepers cannot completely prevent this. As a result, FDA permits honey to be labeled with the name of the plant or blossom if the producer has reason to believe it is the chief floral source of the honey.  See FDA’s Honey Guidelines at 5. And, since Plaintiffs’ own tests revealed that the majority of honey was derived from Manuka flower, this standard had been met.
  • The Court also rejected the argument that the representations were misleading even where the labeling was technically accurate under FDA’s Guidelines. In particular, the Court held that “100% New Zealand Manuka Honey” was ambiguous (i.e., could be a claim that the product was 100% Manuka Honey or 100% derived from Manuka flower) and that other information available to the consumer should be consulted to resolve the ambiguity. The Court held that a reasonable consumer would not have been deceived because of (1) the impossibility of making honey 100% from Manuka or any other floral source (the court noted that a purchaser of a niche product such as this are “more likely to exhibit a higher standard of care”), (2) the low price of the honey, and (3) a “10+” rating on the label, which graded the product on concentration of honey derived from Manuka flower nectar, and for which the highest score was 26+ (although the label did not include any information about the scale).
  • While the Court’s decision notes that ambiguity can be used by advertisers to confuse, it discounted those concerns in this case because Trader Joe’s had engaged in no conduct intended to deceive, i.e. adding in other ingredients; the bees and not Trader Joe’s had made the honey.

FSIS Announces Revised Guidelines for Minimizing the Risk of Shiga Toxin-Producing Escherichia coli (STEC) in Beef Slaughter and Processing Operations

  • On July 19, 2021, the U.S. Department of Agriculture’s Food Safety Inspection Service (FSIS) published notice that it has updated two of its guidelines for minimizing the risk of Shiga toxin-producing Escherichia coli (STEC) in beef slaughter (including veal) and processing operations.  The beef slaughter and beef processing guidelines, which were initially published for comment on March 3, 2017 as “compliance” guidelines, provide advice on the best practices to prevent, eliminate, or reduce levels of fecal and associated microbiological contamination and address contamination with STEC in raw non-intact beef products and beef products intended for non-intact use.  Although these guidelines were developed to help small and very small establishments meet best practice recommendations, all FSIS regulated beef slaughter and processing establishments may be able to apply the recommendations in the guidelines.
  • Updates to the guidelines for minimizing the risk of STEC in beef slaughter and processing operations include:
    • Removal of the word “compliance” from the titles of both documents and other changes to clarify that the guidelines are recommendations and do not create any new regulatory requirements, a change that was made in response to concerns from industry groups that FSIS inspectors could incorrectly interpret the beef slaughter and beef processing guidelines as regulatory requirements;
    • Removal of information regarding Salmonella from both documents, as a result of FSIS choosing to address that foodborne hazard in other documents;
    • Additional information on technical procedures (e.g., cattle washing and pre-harvest interventions in beef slaughter and a brief question and answer section on antimicrobial interventions and retained water in beef processing);
    • Removal of best practices recommendations that would not be practical (e.g., the use of chlorophyll to detect contamination on carcasses); and
    • Additional information in relation to product recalls to clarify FSIS policy regarding adulterant STEC strains, which include E. coli O157:H7 as well as strains that have certain O groups (O26, O45, O103, O111, O121, and O145) and contain two specific virulence genes (stx and eae).
  • The revised beef slaughter and beef processing guidelines are expected to be posted today on the FSIS guidance web page at: https://www.fsis.usda.gov/policy/fsis-guidelines.  Although comments on these guidelines will no longer be accepted through www.regulations.gov, FSIS will continue to update these documents, as necessary.
  • Senators Chuck Schumer (D-NY), Cory Booker (D-NJ), and Ron Wyden (D-OR) unveiled a lengthy discussion draft titled the Cannabis Administration and Opportunity Act on July 14. The draft language is meant to spur and inform discussions as the senators work to create a final legislative proposal to be introduced as a formal Senate bill.
  • Section 505 of the discussion draft proposes creating a legal pathway for cannabidiol (CBD) in dietary supplements. Specifically, the draft proposes amending the definition of “dietary supplement” in 21 U.S.C. § 321(ff) to except CBD derived from hemp from the prohibition against using substances that have been approved as drugs. The draft also proposes a section that states dietary supplements would be adulterated if they contain more CBD than a limit to be set by the Secretary of the Department of Health and Human Services. Additional language would give FDA enforcement authority over noncompliant products containing CBD that are improperly labeled as dietary supplements and give FDA the authority to require safety-related labeling or packaging as needed for CBD-containing dietary supplements. The proposed language limits the possibility of CBD in dietary supplements to CBD derived from cannabis plants, limiting opportunities for synthetically-produced CBD.
  • Other provisions in the draft would decriminalize marijuana by removing “marihuana” and “tetrahydrocannabinols” from the list of Schedule I controlled substances at 21 U.S.C. § 812, expunge non-violent marijuana crimes, and allow compliant cannabis businesses access to financial services, among other items.
  • The sponsoring senators request comments from stakeholders. A comprehensive summary of the discussion draft is available here. If final language is developed and a bill is introduced, the bill would join S. 1698 and H.R. 841, other bills introduced in Congress this session that seek movement on CBD. We will continue to monitor movement on these proposals.
  • On July 12, 2021, private plaintiffs filed a proposed class action lawsuit (subscription to Law360 required) against Chobani LLC. The plaintiffs allege that Chobani misrepresented its certification from Fair Trade USA, leading plaintiffs to overpay for Chobani’s products because they believed in the certification labeling.
  • Chobani became the first in the U.S. dairy industry to be certified with the Fair Trade USA seal of approval in May 2021. Fair Trade USA is a nonprofit that grants and sets standards for the fair trade label. However, the suit claims that Chobani’s immigrant laborers work in “dangerous conditions,” dealing with hazards including slippery surfaces, aggressive cows, and heavy machinery being poorly operated on dairy farms in upstate New York. The complaint relies on a nonprofit worker groups’ report that states dairy workers did not succeed in getting Chobani’s support in unionization efforts at farms from which Chobani purchases milk.
  • Chobani stated that the lawsuit is meritless and makes “unfounded attacks on Fair Trade USA, one of the most highly-regarded third-party verification programs for environmental, social and economic standards.” This lawsuit is the most recent action filed by Sheehan & Associates, which has been prolific in recent years in lawsuits against food companies.
  • On July 1, the Federal Trade Commission (FTC) voted to adopt a final “Made in USA” (MUSA) rule, which incorporates guidance set forth in the FTC’s previous Decisions and Orders and its 1997 Enforcement Policy Statement on U.S. Origin Claims. The final rule applies to all labels, whether they appear on product packaging or online, and includes mail order catalogs or mail order promotional materials that include a seal, mark, tag, or stamp declaring goods are “Made in the USA,” “Made in America,” or the equivalent thereof.
  • Consistent with the guidance, the rule will prohibit marketers from including unqualified MUSA claims on labels unless:
    • Final assembly or processing of the product occurs in the United States;
    • Significant processing that goes into the product occurs in the United States; and
    • All or virtually all ingredients or components of the product are made and sourced in the United States.
  • The FTC received hundreds of comments regarding the applicability of the Rule to products like beef and shrimp. The FTC shares jurisdiction over country-of-origin claims for food and agricultural products with the USDA and, in some instances, the FDA. As stated in the Rule, the USDA and FDA have primary jurisdiction over labeling issues for food products within their purview, and the Rule does not supersede, alter, or affect the application of any federal statute or regulation relating to country-of-origin labeling requirements, including but not limited to regulations issued under the Federal Meat Inspection Act, the Poultry Products Inspection Act, and the Egg Products Inspection Act. Notably, however, the USDA announced the initiation of a top-to-bottom review of the voluntary “Product of USA” claim which is currently permitted on imported products under FSIS’s jurisdiction, including beef products, that are processed in the US. The review is intended to complement the FTC’s Rule and alleviate any potential confusion in the marketplace.
  • As our readers are aware, there have been numerous class action lawsuits related to the use of unqualified MUSA claims on food products. For past blog posts, see here and here. In addition to risk of potential lawsuits, manufacturers making unqualified MUSA claims may also face the FTC’s now broader legal authority and range of remedies, including the ability to seek redress, damages, and civil penalties, if such labeling claims are found to be false.

The final rule and adoption process is also covered in our Consumer Protection Connection blog post.

  • As we have previously reported on, the FDA issued a final rule regarding gluten-free labeling of fermented and hydrolyzed foods on August 12, 2020. The rule established a compliance date of August 13, 2021.
  • The rule does not alter the definition of gluten-free that was established in a 2013 final rule, which essentially requires foods bearing gluten-free claims to be made without gluten containing ingredients or processed such that no more than 20 ppm of gluten remain in the final food product. However, the FDA determined that additional regulation of fermented and hydrolyzed foods was required to ensure compliance with the 2013 final rule because currently the “FDA knows of no scientifically valid analytical method effective in detecting and quantifying with precision the gluten protein content in fermented or hydrolyzed foods in terms of equivalent amounts of intact gluten proteins.”
  • Therefore, the 2020 rule established a records-based system to ensure that fermented and hydrolyzed foods are gluten-free consistent with the definition established in 2013. Specifically, food manufacturers of foods that bear gluten-free claims are required to keep records that demonstrate that (1) the food is gluten-free before fermentation or hydrolysis; (2) the manufacturer has adequately evaluated the potential for cross-contact with gluten during the manufacturing process; and (3) if necessary, measures are in place to prevent the introduction of gluten into the food during the manufacturing process. The records requirement only applies to food ingredients for which adequate analytical methods to test for gluten content are not available (i.e., hydrolyzed and fermented foods) and the records must be kept for at least 2 years after introduction of the food into interstate commerce and must be reasonably accessible to FDA during inspection at each manufacturing facility. We also note that the rule applies to enzymes that are grown on growth media containing gluten (e.g., wheat) because gluten from the growth media may be carried over and may be hydrolyzed due to fermentation, thus making it undetectable based on current methodologies.
  • As the compliance date approaches, food manufacturers of gluten-free products should be collecting and reviewing documentation from suppliers of any hydrolyzed or fermented food ingredients to ensure compliance with the rule.

FDA Releases Draft Guidance on Oversight of Food Products Covered by Systems Recognition Arrangements

  • On July 12, 2021, the U.S. Food and Drug Administration (FDA) published notice of a new draft guidance document for industry: FDA Oversight of Food Products Covered by Systems Recognition Arrangements.  A Systems Recognition Arrangement (SRA) establishes a regulatory partnership between FDA and another food safety authority in countries with systems FDA has concluded have similar elements and similar levels of oversight that lead to similar food safety outcomes.
  • The new draft guidance details adjustments to FDA’s regulatory oversight activities for food products covered by an SRA and imported from a country with an active SRA.  The draft guidance does not impact activities for food exported from a country whose food safety system is covered by an SRA but the specific type of food is not covered by the SRA or “for-cause” activities concerning food products covered by an SRA.  Otherwise, regulatory adjustments include:
    • In-country food establishment inspections will be rare in countries with an SRA (currently Australia, Canada, and New Zealand);
    • Automated screening and risk-targeting and review of imported food will be adjusted, although foods subject to Detention Without Physical Examination (DWPE) under an existing Import Alert (IA) will not be automatically removed from the IA when an SRA is signed;
    • Imported food covered by an SRA will generally not be prioritized for examination and sampling unless it is a commodity subject to routine surveillance sampling that targets both domestic and import samples;
    • FDA does not intend to prioritize inspections of importers for Foreign Supplier Verification Program (FSVP) compliance or compliance with juice and seafood Hazard Analysis Critical Control Point (HACCP) importer requirements with respect to imported foods covered by an SRA; and
    • With respect to regulatory compliance actions, FDA may issue warning letters, add establishments or food products to DWPE, refuse products offered for import, or take other regulatory actions as appropriate when food covered by an SRA that appears violative is offered for import and/or is intended for use in the United States.
  • Stakeholders are invited to submit comments on the new draft guidance by September 10, 2021 to ensure consideration before FDA begins work on the final version of the guidance.  Keller and Heckman attorneys are available to assist interested parties with submitting comments or helping with other food import issues.  For assistance, please email: fooddrug@khlaw.com.