Godiva Can’t Slip Suit Over Using ‘Belgium 1926’ on Labels (subscription to Law360 required)

  • A proposed class action lawsuit filed against Godiva Chocolatier in January 2019 alleges that consumers in New York and California were misled by the claim “Belgium 1926” on chocolate that was made in Pennsylvania.  The plaintiffs assert that Belgium, the country of origin implied by the claim, is recognized “as producing among the highest quality chocolates in the world,” and that American chocolate is different.  Godiva motioned to dismiss the lawsuit, arguing that a reasonable consumer would realize that the disputed claim only means that the company was founded in Belgium in 1926.
  • On May 29, 2020, a judge in the U.S. District Court for the Southern District of New York ruled that the disputed claim creates a “plausible inference” that the chocolates are made in Europe.  Thus, numerous claims alleging violations of New York and California consumer protection laws may proceed.  The judge denied injunctive relief, however, ruling that plaintiffs lacked standing because their potential for future harm is conditional, being dependent on plaintiffs choosing to purchase the chocolate again.
  • Godiva reportedly told Law360 that it will continue to fight the proposed class action lawsuit, maintaining the “Belgium 1926” claim clearly pertains only to the company’s heritage.  Godiva is concurrently defending a lawsuit filed by an individual under the District of Columbia’s consumer protection laws based on the “Belgium 1926” claim.  On February 18, 2020 in an order remanding the individual lawsuit to the D.C. Superior Court, the U.S. District Court for the District of Columbia concluded that it lacked subject matter jurisdiction and denied Godiva’s request to transfer the case to the federal court in the Southern District of New York.
  • On May 26, 2020, the U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) issued joint warning letters to four companies for the marketing and sale of products deemed fraudulent for the treatment or prevention of COVID-19 (Coronavirus Disease 2019).
  • FDA warned CBD Gaze (CBD products), Alternavita (grapefruit seed extract, colostrum, and cod liver oil products), Musthavemom.com (colloidal silver, vitamins, minerals, herb oils, and a homeopathic drug product), and Careful Cents, LLC (essential oil products), regarding the companies’ promotion, including through referrals as Amazon Associates, of their respective products with claims that they mitigate, prevent, treat, diagnose, or cure COVID-19.
  • FDA demanded that the four companies immediately cease to promote and participate in the sale of the products at issue, and requested confirmation in writing, within 48 hours, of the specific steps being taken by the companies to correct the violations. In addition, FDA indicated that the companies will be added to a list published on FDA’s website of companies that have received FDA warning letters for fraudulent products related to COVID-19.
  • There are currently no FDA-approved products for the prevention or treatment of COVID-19, and FDA indicates it is taking urgent measures to protect consumers from products that—without approval or authorization by FDA—claim to mitigate, prevent, treat, diagnose, or cure COVID-19. In addition, it is unlawful to market or advertise that a product can prevent, treat, or cure human disease, unless adequately substantiated by competent and reliable scientific evidence (including, when appropriate, well-controlled human clinical studies) supporting the validity of the claims at the time they are made (and there is no such evidence that applies to the products at issue here). Companies that sell products with unapproved claims regarding COVID-19 may be subject to enforcement actions such as seizure, injunction, and restitution.
  • On May 27, 2020, the U.S. Food and Drug Administration (FDA) released a guidance document entitled “Reporting a Temporary Closure or Significantly Reduced Production by a Human Food Establishment and Requesting FDA Assistance During the COVID-19 Public Health Emergency.”  FDA issued this guidance to provide certain FDA-regulated food establishments (i.e., human food facilities and farms, but not restaurants and retail food establishments), with a convenient mechanism to voluntarily report if they have temporarily ceased or significantly reduced production, or if they are considering doing so.  FDA noted that this reporting mechanism may also be used to request assistance from the Agency regarding issues that may affect continuity of operations during the pandemic.
  • By way of background, facilities that manufacture/process, pack or hold food for consumption in the U.S. must register with FDA when initially beginning operations and then update that registration on a biennial basis and within 60 days of when certain changes in their operations occur.  FDA noted that rapid notification regarding certain FDA-regulated food establishments that are temporarily closing or reducing production will help FDA better understand the current status of the food supply and address challenges facing food producers to help support food production.
  • To address issues that may affect continuity of operations during the pandemic, FDA can provide information, such as relevant guidance, in areas including protecting worker safety, inability to access protective equipment for personnel, and supply chain imbalances.  In its guidance, FDA noted that it will work with other agencies, like the Centers for Disease Control and Prevention, Department of Homeland Security, Department of Agriculture, Occupational Safety and Health Administration, the Federal Emergency Management Agency, and State, local, tribal and territorial regulatory partners to provide the most up-to-date information.
  • This guidance is intended to remain in effect only for the duration of the public health emergency related to COVID-19.
  • On May 22, FDA issued a guidance to provide temporary and limited flexibilities in food labeling requirements to help minimize the impact of supply chain disruptions associated with the COVID-19 public health emergency. For example, FDA is providing flexibility for manufacturers to use existing labels, without making otherwise required changes, when making minor formula adjustments due to unforeseen shortages or supply chain issues brought on by COVID-19, as long as those changes do not pose a health or safety issue and do not cause significant changes in the finished food.
  • The guidance states that FDA will not object to temporary and minor formulation changes without making conforming label changes as long as the minor changes are consistent with the following general factors:
    • Safety – the ingredient being substituted must not cause any adverse health effects, including food allergens in the U.S. and ingredients that are allergens in other countries (e.g., sesame, celery, lupin, buckwheat, molluscan shellfish, and mustard), gluten, sulfites, or other ingredients known to cause sensitivities;
    • Quantity – generally present at 2% or less by weight of the finished food;
    • Prominence – the ingredient being omitted or substituted should not be a major ingredient (for example, replacing rice flour for wheat flour in a muffin) or an ingredient that is the subject of a label statement (for example, butter in a cookie with a “made with real butter” claim);
    • Characterizing or ingredient in name – the ingredient being omitted or substituted is not a characterizing ingredient where its presence has a material bearing on consumer purchasing;
    • Claims – an omission or substitution does not affect any voluntary nutrient content or health claims; and
    • Nutrition/function – an omission or substitution does not have a significant impact on the finished product.

In light of the general factors listed above, the FDA does not intend to object if a minor, non-characterizing ingredient is temporarily omitted, substituted, or reduced in the formulation without corresponding labeling changes being made.

  • Additionally, the guidance also provides temporary flexibility to the vending machine industry regarding vending machine labeling requirements during the public health emergency. For example, FDA will provide flexibility should vending machine operators experience difficulties in replacing stock, necessitating product substitutions using products that lack front of package calorie information.
  • The temporary policy is to remain in effect for the duration of the public health emergency. However, given that the food and agricultural sector may need additional time to bring supply chains back to regular order, the FDA will consider whether an extension is warranted, even after the termination of the public health emergency.
  • Under the Food Safety Modernization Act (FSMA) Produce Safety Rule, a farm is eligible for a qualified exemption and associated modified requirements (described in 21 CFR 112.6) if (1) the farm’s food sales averaged less than $500,000 per year in the previous three years and (2) the average value of the farm’s sales to qualified end users exceeded the average value of the farm’s sales to all others during the previous three years. A qualified end user is either (a) consumer of the food or (b) a restaurant or retail food establishment located either in the same state or Indian reservation as the farm or within 275 miles of the farm.
  • On May 22ndthe FDA released a temporary guidance (the “Guidance”) which states that for the year 2020 (and any subsequent years affected by COVID-19), the FDA will not enforce the requirement that a majority of sales be made to qualified end users. Instead, farms may remain eligible for a qualified exemption in 2021 provided that they submit documentation showing compliance with the qualified end user requirement in 2017-2019 (or years that the farm was in operation), or in the case of farms beginning sales in 2020, based on the projected sales to qualified end users in the absence of the COVID-19 pandemic. Importantly, this Guidance does not apply to farms that are not able to show compliance with the qualified end user requirement prior to 2020.
  • The increased flexibility afforded by the Guidance recognizes the disruptions to the supply chain that the COVID-19 pandemic has caused and allows farms to shift sales to available buyers without losing their eligibility for the qualified exemption. Keller and Heckman will continue to monitor and report on the impact of the pandemic on the food industry.
  • On May 20, 2020 the European Commission announced its adoption of the Biodiversity Strategy and a Farm to Fork Strategy.  As core parts of the European Green New Deal, the initiatives are intended to promote a sustainable and competitive European economy.
  • Specifically, the Biodiversity Strategy aims to address biodiversity loss due to the unsustainable use of land and sea, overexploitation of natural resources, pollution and invasive species.  The Farm to Fork Strategy aims to transition the EU food system into a sustainable system that that will safeguard food security, while ensuring access to healthy diets and reducing the environmental footprint of the EU food system.  Of particular interest, the Farm to Fork Strategy proposes measures to ensure that healthy food options are the easiest for EU citizens to select and may include front-of-pack labeling (for salt, sugar and/or fat) and potentially setting maximum permitted levels for certain nutrients.
  • The announcement notes that the COVID-19 crisis has demonstrated the vulnerability caused by increasing biodiversity loss and the importance of a well-functioning food system. The strategies in part aim to strengthen the EU’s resilience to future pandemics and climate threats.  The Commission has asked the European Parliament and the Council to endorse the strategies and commitments, and has encouraged citizens and stakeholders to participate in the public debate.
  • On May 7, 2020, the National Organic Coalition and the Organic Farmers Association sent a letter to congressional leaders urging Congress to include targeted support for the industry within the next coronavirus relief package.  These groups noted that they require funding and technical assistance to help operations protect the health and safety of all who are involved in organic agriculture, certification, and compliance.  Moreover, the groups urged congress to press USDA to finalize critical regulations, including the “Strengthening Organic Enforcement” rule and the Origin of Livestock rule.
  • In the letter, the interest groups noted that USDA should not let the pandemic further delay critical rulemaking, including finalizing the “Strengthening Organic Enforcement” rule, which is intended to close a loophole on uncertified handlers by requiring imports to be accompanied with electronic import certificates.  This rule has been under review at the White House Office of Management and Budget since November 2019 and was supposed to be finalized by December 2019.  The interest groups noted that this rule is important during the COVID-19 pandemic so that fraudulent importers do not see the pandemic as an opportunity to resume or expand fraudulent shipments.
  • The interest groups also urged congress to publish the final rule on Origin of Livestock (OOL), which specifies that organic dairy animals must be raised organically from the last third of gestation or be raised organically for one year if transitioning a conventional herd to organic, and further clarifies that this transition is allowed only once.  The rule effectively prohibits continuous transitions and cycling of dairy animals in and out of organic production.  Through the Fiscal Year 2020 appropriations process, Congress mandated that USDA complete the OOL final rule by June 17, 2020.  We will continue to monitor any developments.
  • In response to the COVID-19 pandemic, the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) announced a Memorandum of Understanding (MOU) to help prevent interruptions at FDA-regulated food facilities, including fruit and vegetable processing. The MOU creates a process for the two agencies to make determinations about circumstances in which the USDA could exercise its authority under the Defense Production Act (DPA) with regard to certain domestic food resource facilities that manufacture, process, pack, or hold foods, as well as to those that grow or harvest food that fall within the FDA’s jurisdiction.
  • As background, on April 28, 2020, the President issued Executive Order 13917 which delegated authority to USDA under the DPA with respect to food supply chain resources. The President directed the Secretary of Agriculture to take all appropriate actions to ensure that meat and poultry processors continue operations. Additionally, the executive order specified that: “Under the delegation of authority provided in this order, the Secretary of Agriculture may identify additional specific food supply chain resources that meet the criteria of section 101(b).”
  • If the Secretary of Agriculture identifies specific food supply chain resources that are subject to FDA regulation, the agencies will collaborate in the following ways:
    • FDA will:
      • Monitor the integrity and adequacy of the nation’s food supply subject to FDA regulation;
      • Work with stakeholders involved in the domestic production or distribution of FDA-regulated food to identify extant and potential domestic supply chain disruptions;
      • Direct FDA-regulated entities to applicable guidance;
      • Assess potential disruptions to the nation’s supply of FDA-regulated food;
      • Educate domestic stakeholders about this MOU and the potential for use of DPA authority where necessary to protect the supply of FDA-regulated food;
      • Upon identifying a potential or extant disruption to the supply of FDA-regulated food, contact USDA to discuss appropriate action, including possibly invoking its delegated DPA authorities.
    • USDA will:
      • Retain exclusive delegated authority to issue DPA orders or invoke DPA authorities with regard to food resources and domestic food resource facilities;
      • Upon notification by FDA of a potential or extant disruption to the supply of FDA-regulated food, consult with FDA about appropriate action;
      • After consultation with FDA, issue orders related to or utilize other delegated USDA DPA authorities with regard to food resources and food resource facilities.
  • As stated in the MOU, the agreement is solely for the purposes of coordinating potential use of delegated DPA authorities during the COVID-19 public health emergency. It will continue in effect unless modified by mutual written consent at any time or terminated by either party upon a 60 day advance written notice to the other, or upon the expiration of the presidentially declared emergency, whichever comes first.
  • As China starts to emerge and recover from COVID-19, more and more food brands are entering into the plant-based food space. As the plant-based market in China begins to expand, it’s important for anyone entering this space to consider the applicable food regulations that will apply to such foods.
  • First, one must confirm all plant-based ingredients are lawful to use in food under China’s food laws. Approval from the National Health Commission (NHC) is required if the ingredient is considered “new,” meaning there is no history of consumption by the Chinese population. In addition to the plant-based ingredients, one must not overlook the other ingredients and food additives used in the food, as they should have proper status under the Chinese requirements. For instance, it should be confirmed that the use levels of all food additives in the finished plant-based food comply with any applicable limits set forth in China’s food additive standard.
  • Second, a product standard for the plant-based ingredient or food should be identified. China’s food regulatory system is based on standards, which detail safety and quality requirements of the food. Thus, identifying a proper product standard is a crucial component of compliance. For instance, when a plant-based food is imported, upon its arrival at port, customs officials will examine the food in accordance with the applicable Chinese standard(s). Accordingly, identifying the correct standard(s) for the product before exporting to China is critical.
  • Third, one must ensure proper labeling is used to promote the plant-based food. This would include an appropriate product name and other statements or claims that may be put on the package. For example, whether the qualifying terms “artificial,” “imitated,” “plant-based,” and “veggie” may be used, and whether the plant-based food, per se, can refer to the terms “milk,” “sausage,” “burger,” and “egg”, which are traditionally derived from animals. China is currently amending its food labeling standard and regulation. There is now a unique opportunity for industry to make labeling suggestions since one of the proposed provisions specifically addresses product naming of plant-based food. Please find more details of Chinese food labeling in our CRM Alert- Are You Ready for China’s New Food Labeling Requirements?  Notably, industry has already taken some steps to propose standards that may be used to guide industry on product naming, technical specifications, etc. For instance, the Chinese Institute of Food Science and Technology (IFST) issued a notice[iii] on March 18, 2020 to solicit feedback on its plan to draft a Group Standard for Plant Protein Meat Products.
  • There is no doubt that “plant-based food” is gaining more and more attention among Chinese consumers interested in consuming alternatives to meat or simply wanting to incorporate such foods to their diets. However, its regulatory scheme remains unsettled, e.g., whether the government will create a new food regulatory category for plant-based food giving it a new “identity” or will it keep plant-based food under the existing framework and simply develop additional regulatory requirements.  Our Keller and Heckman Shanghai Office is closely monitoring the regulation of plant-based foods in China and we will continue to report on developments in this space.

 

 

  • The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) regulates genetically modified organisms (GMOs) for “plant pest risk” under the Plant Pest Act.  Plant pest risk is the potential for direct or indirect injury to, damage to, or disease in any plant or plant product resulting from introducing or disseminating a plant pest, or the potential for exacerbating the impact of a plant pest.  On January 19, 2017, APHIS published a proposed rule to revise the Agency’s biotechnology regulations (82 Fed. Reg. 7008), as discussed in our previous coverage of the regulation of GMOs by multiple agencies under a regulatory framework called the “Coordinated Framework for the Regulation of Biotechnology” (Coordinated Framework).  The January 2017 proposed rule was withdrawn, as discussed here, and replaced with a January 2019 proposed rule that was considered more favorable by the regulated industry.
  • On May 18, 2020, APHIS published the final rule amending its regulations at 7 CFR Part 340, ‘‘Introduction of Organisms and Products Altered or Produced Through Genetic Engineering Which are Plant Pests or Which There is Reason to Believe are Plant Pests.’’  As announced on its website, APHIS dubs this the Sustainable, Ecological, Consistent, Uniform, Responsible, Efficient (“SECURE”) Rule.  The final rule is largely unchanged as compared to the January 2019 proposed rule.  Some of the major changes to be implemented under the new SECURE Rule include:
    • Replacement of the mandatory “Am I Regulated?” (AIR) process for determining whether a GMO requires regulation as a plant pest risk and the exemption process under the AIR process with criteria for a self-determination regarding exemption status and a voluntary process for seeking confirmation from APHIS;
    • Replacement of the current petition process with a new procedure for requesting a regulatory status review (RSR) to determine if a genetically engineered plant poses a plant pest risk; and
    • Discontinuing the notification process for alerting APHIS of new GMOs and replacing it with a process for applying for a permit for a GMO that is self-determined as not meeting an exemption and which does not undergo or pass a RSR.
  • According to industry press, the American Seed Trade Association has praised the SECURE Rule.  Opponents, however, such as the Center for Science in the Public Interest (CSPI) fear the rule will let potentially unsafe GMOs enter the food supply without sufficient oversight.  Both sides agree that the SECURE Rule is a major step in deregulating the introduction of GMOs for crop production.