• As an update to our coverage of on-going litigation of plant-based product labeling, an Oklahoma federal judge recently refused to block a state law that requires plant-based food companies include a disclaimer on labels if they use a meat term to describe their products. As our readers know, in September, Upton’s Naturals Co. and the Plant Based Foods Association filed suit against the state of Oklahoma challenging the constitutionality of the Meat Consumer Protection Act (“the Act”). The Act requires that plant-based food companies include a disclaimer the size of the product’s name if they use terms like “burger,” “hotdog,” “meatball,” “jerky,” “sausage,” “chorizo,” and “bacon,” even if the labels state the products are “meatless,” “vegan,” or “plant-based.”
  • Plaintiffs argued that the law was passed to prevent competition with the meat industry and violates the First Amendment. Upton’s Naturals had sought a preliminary injunction against the law. However, on November 19, U.S. District Judge Stephen P. Friot disagreed and ruled that the Act did not violate the Constitution.
  • Judge Friot said he had “no trouble” deciding that the speech at issue is potentially misleading to a reasonable consumer because Upton’s Naturals packaging includes terms like “bacon,” “hot dog,” “jerky,” and “meatballs.” Indeed, Judge Friot stated that “[w]hile plaintiffs argue that the government cannot make these meat-related terms potentially misleading by virtue of its definition of meat, the court notes that all of the meat-related terms, except burger, are also defined in the Dictionary by Merriam-Webster…to indicate they are animal-based.”
  • The judge rejected Upton’s Naturals argument that the U.S. Supreme Court’s 1980 decision in Central Hudson Gas & Electric Corp. should apply to the case, which held that a government may restrict commercial speech that is neither misleading nor about unlawful activity as long as the government has a substantial interest in restricting that speech. However, Judge Friot disagreed, stating that “the challenged provision of the act does not restrict speech as in Central Hudson. It requires disclosure of information.” Instead, Judge Friot applied the 1985 decision in Zauderer, which held that compelled disclosure of commercial speech comports with the First Amendment if the information is “reasonably related to a substantial governmental interest and is purely factual.”
  • Upton’s Naturals intends to appeal Judge Friot’s decision to the Tenth Circuit. We will continue to monitor any developments.
  • On November 19, 2020, the FDA announced that it was partnering with the California Department of Food and Agriculture (CDFA), the University of California, Davis, Western Center for Food Safety (WCFS), and agricultural stakeholders in the Central Coast of California to launch a multi-year longitudinal study of the ecology of human pathogens in the environment that may cause foodborne illness outbreaks.
  • This study continues FDA’s efforts to carry out its 2020 Leafy Greens Shiga toxin-producing E. coli (STEC) Action Plan, which was released in March of 2020 in response to a series of E coli 0157:H7 outbreaks in recent years. The Action Plan calls for the FDA to work collaboratively with industry and other regulatory partners to address knowledge gaps regarding leaf green safety as well as to work on prevention and outbreak response. In furtherance of the Action Plan’s goals to address gaps in knowledge, the study will examine how pathogens survive and move through the environment and possibly contaminate produce by collecting and analyzing samples from the environment, including adjacent land, well and surface waters, and soil inputs that include compost, dust, and animal fecal samples.
  • FDA expects that this study as well other initiatives launched pursuant to the Action Plan will continue into 2021. Keller and Heckman will continue to report on the Action Plan and other developments regarding foodborne illness.
  • As covered on this blog, FDA announced a new policy on September 26, 2018 and concurrently released draft guidance detailing the circumstances for publicizing retailer information (e.g., specific retail store name and address) when recalled human or animal food is not easily identified as being the subject of a recall from its retail packaging or lack thereof (e.g., deli cheese, nuts, rawhide chews, or pet treats sold in bulk and fresh fruits and vegetables sold individually) and is likely to be available for consumption (i.e., given its shelf-life or perishability, it may still be in a consumer’s possession).  This policy is part of an overall effort to provide consumers with “actionable information” and followed the release a month earlier of draft guidance, subsequently finalized in February 2019, on the use, content, and circumstances for issuing public warnings for consumers in the event of a recall.
  • On November 23, 2020, FDA announced the Final Guidance on ‘‘Public Availability of Lists of Retail Consignees to Effectuate Certain Human and Animal Food Recalls.’’  Minor changes include a new statement that FDA intends to update the retail consignee lists as the information available to FDA develops and clarification that while this guidance is specific to retail consignees, FDA can disclose the names of restaurants and similar entities where appropriate.  FDA intends to post lists of retail consignees associated with a specific recall on FDA’s website.  Retailers that typically may be subject to public listing are grocery stores, pet food stores, convenience stores, and online food delivery services.  Food recalls at issue are those classified as Class I recalls, or recalls not yet classified that are likely to be classified as Class I, and some Class II food recalls, particularly where a public warning has been issued or there is an association with an outbreak of a foodborne illness.  Packaged food would not usually meet the criteria for posting information on the retailer of the recalled food, but FDA may in some cases determine that packaged food was distributed in a manner where identifying the retailer would help prompt consumers to consider whether they possess the recalled product.
  • FDA’s decision to publicly list retailers of recalled food in certain situations responds to Section 206 of the 2011 FDA Food Safety Modernization Act (FSMA), which directs FDA to consult the policy of the United States Department of Agriculture (USDA) for making publicly the available the names and locations of retail consignees of recalled meat or poultry products that USDA compiles in connection with a recall where there is a reasonable probability that the use of the product could cause serious adverse health consequences or death (Class I recalls) and to consider the circumstances under which it would be appropriate for FDA to provide such a list to the public.  While identifying “retail consignees” is subject to restrictions under FDA’s regulations protecting confidential commercial information (CCI), FDA has the authority to make a public disclosure of CCI, including the revelation of confidential business relationships between suppliers and customers, to the extent necessary to effectuate a recall.
  • On November 18, 2020, FDA released the Coordinated Outbreak Response and Evaluation (CORE) Investigation Table, a tool to publish early information on all foodborne outbreaks that the FDA is investigating.  While FDA issues public health advisories or recalls for any outbreak that results in specific, actionable steps for consumers to protect themselves against an unsafe food or product, this new table allows FDA to share information at the earliest phases of an investigation, before actionable steps have been identified.
  • In the press release announcing the table, FDA emphasized that releasing early information about investigations in their beginning stages does not mean FDA will announce early actions for consumers to take.  Rather, the table furthers FDA’s goal of improving transparency in outbreak investigations and complements its New Era of Smarter Food Safety initiative and implementation of the FDA Food Safety Modernization Act (FSMA).  The investigation table will be rolled out as a six-month pilot after which FDA may adjust the table per stakeholder feedback.
  • The table lists the outbreak investigation’s FDA Reference Number, the pathogen involved, the products linked to the outbreak, case count, investigation and outbreak status, and whether any additional steps have been initiated, including recall, traceback, on-site inspection, and sample collection and analysis.  The table is updated weekly with data from both the Center for Disease Control (CDC) and FDA’s CORE Response Teams and tracks outbreaks from beginning to end.  Upon its release, and as of the date of this post, the table listed seven ongoing investigations at various stages of development, including three recently announced investigations into ongoing E. coli O157:H7 outbreaks.  Keller and Heckman will continue to monitor and report on developments in foodborne illness outbreaks.
  • On October 28, 2020, the New York State Department of Health announced the release of the state’s cannabidiol (CBD) proposed regulations to regulate CBD hemp products in New York.  Once finalized and in effect, these new regulations would reverse New York State’s early 2019 ban on the sale of hemp-derived CBD-infused products.
  • By way of background, the U.S. Food and Drug Administration (FDA)’s current position is that CBD does not qualify for use in food or dietary supplements. FDA is investigating whether it can develop a regulatory framework that would permit the use of CBD under the Food Drug and Cosmetic Act, but the Agency has identified numerous safety questions that need to be addressed (discussed previously on this blog here) and little progress has been made to resolve them.  New York indicated that these proposed regulations would fill the regulatory void left by FDA’s refusal to set national standards.
  • The proposed rules reflect legislation enacted in December 2019 that called for the establishment of a Cannabinoid Hemp Program, setting out licensing requirements and quality control standards for both CBD hemp processors and retailers, as well as packaging and labeling requirements that all CBD products must meet.
  • The proposed rules
    • Require all hemp CBD products to be manufactured using good manufacturing practices based on the end product’s intended use.
    • State that individual food or beverage products cannot contain more than 25 milligrams of total CBD per product and supplements would be limited to 3,000 milligrams per product. In addition, products cannot exceed 0.3% total Δ9- Tetrahydrocannabinol (THC) concentration.
    • Clarify that foods and drinks infused with CBD and other hemp derivatives must be packaged by the manufacturer and cannot be added at the retail level or in restaurants.
    • Prohibit the addition of CBD to alcohol products.
    • State that product labels must contain the total amount of CBD in the product, the number of cannabinoids per serving, a nutritional or supplement fact panel, and information on whether it contains THC.
    • Require products to include warnings that state the product has not been evaluated by FDA, is not intended for children, and that it may cause drug test failures.
    • Require labels to caution pregnant or nursing women to consult a healthcare provider before use.
    • Require hemp producers to conduct lab tests for the CBD profile and for heavy metals, microbial impurities, mycotoxins, pesticides, and residual solvents.
    • Require companies to make the testing information retrievable by consumers through a QR code or corresponding link on the product label.
    • Bar claims that suggest CBD will diagnose, cure, mitigate, treat, or prevent disease.
  • New York Department of Health will take comments on the proposed regulations through January 11, 2021.  We will continue to monitor any developments.
  • On November 16, 2020, R.C. Bigelow Inc. argued before a California federal judge in support of its motion to dismiss a proposed class action that alleges its teas are falsely advertised as being made in the United States.  The suit, filed July 13, 2020, alleges that several Bigelow Tea products made with solely with black, green, and oolong tea leaves sourced and processed outside the US are misleading because they carry the claims “MANUFACTURED IN THE USA 100% AMERICAN FAMILY OWNED” and “AMERICA’S CLASSIC” on the label.  Plaintiffs argue that these claims violate California law and would lead reasonable consumers to believe that the products are made and manufactured in the US, when none of the products contain American-grown or processed tea leaves.
  • Bigelow asserted reasonable consumers know that very little tea is grown in the US and that most consumers would read “manufactured in the USA” as encompassing Bigelow’s blending, packaging, labeling, and formulating, most of which is done in the US.  Plaintiff consumers opposed dismissal by showing that the tea leaves in the products identified come from the Camellia sinesis plant, which is grown and processed only in foreign nations such as Sri Lanka and India, and that consumers would understand the claims as meaning the tea itself originates in the USA.
  • At the phone hearing, the judge expressed doubt that consumers would take “manufactured in the USA” to mean the packaging, labeling, and tea bags are made in the US rather than the tea product itself, indicating that some jury-triable issues may survive the motion.  The judge has not yet ruled on the motion.
  • As a reminder, in July 2020, the FTC published a notice of proposed rulemaking announcing its intention to codify its enforcement policy on unqualified “Made in the USA” (MUSA) claims.  As our readers know, the FTC requires products labeled with unqualified MUSA claims, including representations that a product is manufactured in the USA, to be “all or virtually all” made in the US, meaning that the final assembly and processing of the product occurs in the US and all or virtually all ingredients or components of the product are made and sourced in the US.  Keller and Heckman will continue to monitor and report on enforcement actions and other litigation concerning MUSA claims.
  • On November 3, 2020, Plaintiff, on behalf of a proposed class of consumers, filed a class-action lawsuit in the U.S. District Court for the Western District of Washington against Costco Wholesale Corporation and Diamond Pet Foods Inc., alleging that the Defendants had jointly produced and marketed various dog food products under the Kirkland brand name as “Grain Free” when in fact, according to independent testing conducted by Plaintiff, they contained more than insignificant levels of wheat and other grains.
  • Specifically, both the front and the back of the Kirkland products labels included the “Grain Free” claim and the ingredient list did not disclose wheat or any other grains. Plaintiff alleged that allergies to wheat are common among dogs and that the purchasers of the Kirkland products paid a premium for them to avoid the risk to their pets.
  • A similar lawsuit was filed in September in the Central District of California alleging that, as established by independent testing, another of Diamond’s dog food products was falsely advertised as “Grain Free.” According to the lawsuit, Diamond had changed its labels several times, with the most recent label including a disclaimer that trace amounts of grains and other ingredients may be present as a result of the manufacture of other food in the facility. However, Plaintiff alleged that the disclaimer was insufficient since there was more than a trace amount of wheat present.
  • Although these lawsuits make the case that a grain free diet is one that is sought by many consumers, the FDA is investigating a possible link between diet and canine heart disease (canine dilated cardiomyopathy) and has stated that many of the reported incidents of canine heart disease have come from dogs on grain free diets. The FDA’s report states that grain free diets generally contain high levels of legumes, pulses, or potatoes, but that it is not known if there is any connection between these ingredients and canine heart disease; the report cautions that the correlation might simply be a result of the increasing market share of grain free dog food products.

Arizona Wants Out of Arnold Palmer False Labeling Row (subscription to Law360 required)

  • Arizona Beverages USA LLC faces state fraud claims for allegedly misrepresenting the calories per serving on the labeling of two beverage products.  In addition to a recent proposed class action lawsuit filed in the Southern District of New York alleging that Arnold Palmer Half & Half Iced Tea Lemonade is misrepresented as “Lite,” as discussed here, Arizona faces a class action lawsuit in the Northern District of Illinois over its 23-Ounce, Zero-Calorie drink, which the plaintiff alleges is false because the product contains 15 calories per can.
  • In a November 12, 2020 motion to dismiss the lawsuit base on federal preemption, Arizona asserts that the 23-Ounce, Zero-Calorie drink was in compliance with federal law in effect at the time when the beverage was purchased and that re-labeling the product as a “diet” drink following a change in nutrition labeling regulations does not mean the previous label was fraudulent.  Prior to the applicable compliance date for the new regulations of January 1, 2020, Arizona switched from counting calories based on an 8-Ounce serving to a 12-Ounce serving and began stating the full calorie count of the beverage.  The change resulted in a calorie count higher than zero.
  • We have provided detailed summaries of FDA’s 2016 final rules changing the Nutrition Facts label for packaged foods and updating regulations on serving sizes to – among other things – provide realistic Reference Amounts Customarily Consumed (RACCs).  Keller and Heckman will continue to monitor and report on class action litigation concerning calorie content claims.

Ginger Soda False Ad Claims Can’t Take Root, Judge Finds (subscription to Law360 required)

 

  • On November 10, 2020, a Massachusetts federal judge dismissed claims in a proposed class action alleging that Polar Corp.’s ginger ale products are falsely advertised as containing real ginger.
  • The suit, which was filed in May, alleged that Polar Ginger Ale, Polar Green Tea Ginger Ale and Polar Pomegranate Ginger Ale were falsely and deceptively labeled because they claim to be made from real ginger, but do not contain ginger root. The plaintiff argued that the claim was misleading because it would lead consumers to believe that the beverages contain real ginger root and that it would confer a health benefit.
  • In its order to dismiss the claim, the court stated that, because the ginger ale does contain natural flavor derived from ginger as an ingredient, the label’s claim that it is “made from real ginger” is not false, regardless of how little ginger is used.  He noted that Polar’s labeling does not make any representation as to how much ginger is contained in the beverages.
  • The court further noted that the complaint appeared to be an “imperfect copy” of a similar complaint filed against Keurig Dr. Pepper over its Canada Dry ginger ale.  While that case resulted a class action settlement, this one did not pass muster because the product does, in fact, contain real ginger.
  • On November 9, 2020, the U.S. Food and Drug Administration (“FDA” or “the Agency”) filed a lawsuit in the Eastern District of Washington against Valley Processing, Inc. (“Supplier”) that manufactures single strength fruit juice and fruit juice concentrate, which it later supplies to the U.S. Department of Agriculture’s (USDA) school lunch program.  The Supplier provides approximately 2,964,000 apple juice servings to schoolchildren every year.
  • According to the lawsuit, FDA found inorganic arsenic, which is associated with cancer, lesions, neurotoxicity, and diabetes.  In addition, FDA found patulin in the juices, which can cause nausea, vomiting, and gastrointestinal disturbance.  The Agency concluded that this occurred because the Supplier failed to implement practices to control the level of arsenic and patulin in apple and pear juice, and did not do adequate testing to ensure the products were free of the substances, even after being warned by the Agency during previous inspections.
  • The complaint notes that FDA issued warnings to the Supplier following inspections in 2016 through 2019 and advised it how to follow good manufacturing practice.   By way of background, FDA’s food current good manufacturing practice (CGMP) regulations establish basic practices that must be followed, and conditions that must be maintained, by companies who receive, prepare, process, pack, hold, or distribute food.  The purpose of CGMP is to ensure that food is processed in a safe and sanitary manner.  In addition to CGMP, the Agency stated that the Supplier is subject to the juice Hazard Analysis and Critical Control Point (HACCP) regulation, which creates a system to prevent the occurrence of potential food hazards in juice.  Although the Supplier was aware of its responsibility under HACCP, FDA alleged that the Supplier’s failure to have and implement an adequate HACCP plan created insanitary conditions that may render the Supplier’s juice injurious to health.
  • The Agency’s complaint also noted that at several inspections over the last several years, the FDA found many violations, such as animal droppings on containers of juice, dead animals, leaks, and bruised and moldy fruits being used to produce the products.  Further, FDA alleged that the Supplier raised the limit on what level of core rot it would accept for apples, from less than 1% to less than 10%, despite FDA advising that core rot could lead to high levels of patulin.  Moreover, the complaint alleges that the Supplier mixed grapefruit concentrate dating back to 2011, which had been stored outside at ambient temperatures, with newer juice.
  • The Agency asked the court for an injunction stopping the company from placing its products into the stream of commerce until they are found to be in compliance with FDA regulations.  We will continue to monitor any developments.