• On July 1, the California State Senate will hold a hearing on Assembly Bill (AB) 535, which establishes guidelines on when the olive oil industry can use the term “California” on product labeling and marketing. The bill would prohibit any reference to California or any other representation on the principal display panel (PDP) of any container of olive oil, including the terms “California olive oil,” “California olives,” or similar-type phrases, unless 100% of the olives used to produce the oil were actually grown in California.
  • AB 535 would also prohibit labeling a container of olive oil with claims or representations that the olives were grown in a specific region of California, unless 85% of the olive oil, by weight, was produced from olives grown in that specific region.
  • The bill was introduced on February 10, 2021 by CA Assemblymember Cecilia M. Aguiar-Curry, and is a reintroduction bill of last year’s AB 2074 which was tabled in order to prioritize COVID-19 emergency-related legislation. AB 535 passed the Assembly on May 17, 2021 and ordered to the Senate. A Senate hearing was originally scheduled for June 17, but was postponed until July 1.
  • In a press release, Assemblymember Aguiar-Curry stated that the bill “protects Californian olive growers and manufacturers from being undercut in the market by oils that benefit from using the ‘California’ name to mislead consumers about what they’re buying.” However, Michael Fox, CEO of California Olive Ranch, believes AB 535 is an attempt to go after the company’s “Global Blend” extra virgin olive oil series, which is sold under the California Olive Branch brand but combines extra virgin olive oils from California and other growing regions in South America and Europe. Michael Fox stated that “[a]s it is currently written, AB 535 criminalizes the selling of olive oil with truthful and accurate brand names containing geographical terms and establishes a concerning precedent for regulating businesses with geographic names and trademarks in other food and agriculture industries.”
  • Keller and Heckman will continue to monitor the progress of AB 535 and provide updates to our readers.
  • On June 10, 2021, a class-action lawsuit was filed against Inventure Foods, Inc., which manufactures and sells its “Onion Ring Snacks” under the TGI Fridays brand name, for allegedly deceiving consumers by advertising the snacks as onion rings when they contain only de minimis amounts of real onion.
  • The complaint alleges that the product (as disclosed by the ingredient list) primarily consists of corn meal and contains onion only in the form of trace amounts of onion powder (onion powder is the third-most predominant ingredient). Interestingly, the complaint does not allege a violation of FDA’s food labeling regulations. Instead, the complaint acknowledges that the product is labeled as “naturally and artificially flavored,” but alleges that the disclosure on the front package is too small to be easily seen by consumers and, in any case, “fails to tell consumers the Product substitutes onion powder for real onions.”
  • The lawsuit is another in a string of recent lawsuits filed by Sheehan & Associates, P.C., which claim consumers are deceived by the labeling of products whose flavors are largely derived from ingredients other than the ingredient in question (e.g., onion), even in the absence of a clear FDA labeling violation (see also Kashi Strawberry bar and Tostito lawsuits).  Although compliance with FDA’s labeling regulations does not foreclose the possibility that a court could find a reasonable consumer has been deceived, it should in theory present a more difficult case for the plaintiff. Keller and Heckman will continue to monitor and report on these cases.
  •  On June 14, 2021, the U.S. District Court for the Northern District of California dismissed without prejudice (subscription to Law360 required) the first amended complaint in a consumer class action lawsuit against Trader Joe’s over the claim ‘Vanilla Flavored With Other Natural Flavors’ on the product label of the grocery chain’s Vanilla Almond Clusters cereal that the plaintiff alleged derived most of its vanilla flavor from vanillin and ethyl vanillin rather than vanilla bean.
  • The Court decided in favor of Trader Joe’s on the key issues that (1) Plaintiff’s state law claims are preempted because the label complies with the Food and Drug Administration’s (FDA) regulations defining when flavors can be described as “natural” and when they must be labeled “artificial,” and (2) Plaintiff has not plausibly alleged that a reasonable consumer would likely be misled by their labeling because no facts were alleged to support that a reasonable consumer could interpret the cereal’s label to mean that the flavor is derived exclusively from the vanilla plant.  In keeping with the decisions in numerous other cases, the Court found that use of “Vanilla Flavored” alone does not require a product so-labeled to be flavored exclusively with vanilla and with respect to “With Other Natural Flavors,” specifically found that vanillin is not automatically considered an artificial flavoring under FDA’s regulations as it may be either artificial or natural, depending upon its derivation.  With respect to ethyl vanillin, which the Plaintiff alleged was detected in the cereal at a concentration of 6.53 parts per billion by gas chromatography-mass spectrometry analysis, the Court objected to the lack of a control condition in the testing and the absence of information on whether “such an infinitesimal amount is material or significant.”  Thus, finding that the first amended complaint, as drafted, does not plausibly allege that a reasonable consumer would be deceived by the product label representations, the Court ruled that the Plaintiff’s statutory claims fail as a matter of law.
  • We have reported on a variety of vanilla flavoring class action lawsuits, many of which have not survived the motion to dismiss stage.  The Court in this case did not speak to the claim by Trader Joe’s in its January 19, 2021 motion to dismiss (subscription to Law360 required) that this vanilla flavoring lawsuit is one of 110 filed by the plaintiff’s counsel, Spencer Sheehan, in 18 months.  A second amended complaint may be filed within 20 days of the order.

 

  • Designed By Nature announced June 14, 2021 that it is recalling its Goat’s Milk Powder, Cow’s Milk Powder, and Base Milk Powder formulas with an expiration date between May 1, 2021 and June 11, 2022 because they are deficient in several nutrients required for infant formula.  Furthermore, the products were not tested for the presence of Cronobacter.
  • The current product label indicates the product was “developed for all life stages.”  However, the company will be changing its labeling to make clear that the products are not intended to be used for infants 12 months and younger.
  • Products marketed as infant formula must meet certain minimum nutrient requirements, and manufacturers must notify FDA prior to marketing a new formula.  According to the recall notice, Designed by Nature’s formulas were not approved by FDA.
  • On June 8, 2021, Beech-Nut Nutrition Company issued a voluntary recall for one lot of its Beech-Nut Stage 1, Single Grain Rice Cereal (“Cereal”). The rice flour used for the Cereal was tested and confirmed as being below the FDA guidance level, set at a 100 ppb or 100 µg/kg, for inorganic arsenic. However, a routine sampling program by Alaska found that Cereal samples tested above the guidance level for naturally occurring inorganic arsenic set by the FDA in August 2020.
  • As some of our readers may remember, Beech-Nut was named in a congressional report by the U.S. House of Representatives subcommittee on Economic and Consumer Policy with relation to the levels of heavy metals—including arsenic, lead, cadmium, and mercury—found in baby foods. Since that report, Beech-Nut has been involved in two class-action lawsuits for allegedly misrepresenting Beech-Nut baby foods are “real food for babies” and failing to disclose the presence of dangerous levels of heavy metals. Most recently in April 2021, the DC Attorney General filed a lawsuit against Beech-Nut for “misleading parent-consumers about the health and safety of its products.” The New York Attorney General similarly announced an investigation into arsenic levels in infant rice cereal products and the advertising and promotion of such products.
  • In addition to voluntarily recalling the Cereal, Beech-Nut has decided to exit the market for infant rice cereal products, citing concern over the ability to consistently obtain rice flour well-below the FDA guidance level and Beech-Nut specifications for naturally occurring inorganic arsenic.
  • We have previously reported on proposed Senate legislation that would require country of origin labeling (COOL) for imported commodities sold online. On June 8, 2021, the Senate passed the United States Innovation and Competition Act of 2021 which included the proposed COOL requirements in Section 2510 of the Act.
  • The Act as passed by the Senate is virtually unchanged from the proposed legislation that we reported on. As a recap, the legislation would require that a wide variety of imported commodities sold online be accompanied by the following disclosures on the website “in a conspicuous place”:
    • The country of origin of the product, consistent with U.S. Customs and Borders Protection (CBP) marking requirements; and
    • The country of origin in which the seller is located (and, if applicable, the location of any parent corporation)
    • Further, the online disclosures for certain categories of goods already subject to existing specialized COOL requirements would also be required to comply with these existing requirements. Importantly, products covered by USDA’s Agricultural Marketing Service (AMS) COOL would have to comply AMS’s COOL requirements in the online disclosure.
  • The legislation would be enforced by the Federal Trade Commission (FTC), but would require that FTC and CBP sign a memorandum of understanding to provide for consistent implementation of the legislation. Having passed the Senate, the legislation now will move to the House of Representatives for consideration. We will continue to monitor and report on any developments.
  • FDA published a report on June 11 that expresses concerns with farm animal operations located nearby fields growing produce. The report focuses on a 2020 Salmonella enteritidis outbreak in peaches that affected 101 people across 17 states and explains FDA’s testing and traceback processes from the outbreak.
  • The report explains that FDA connected pathogen samples from peaches and peach tree leaves to a strain of Salmonella on an adjacent chicken operation using whole-genome sequencing on chicken isolates from the same period as the outbreak. The results prompted additional testing around the company’s orchards where other strains of Salmonella were connected to genetically identical pathogens found in beef and cattle isolates from an adjacent cattle feedlot. The findings helped FDA quickly identify and prioritize investigations at certain peach packing and holding operations and other peach orchards.
  • The report states these findings underscore FDA’s concern about the potential impact adjacent land uses have on produce safety, including the potential impact of dust exposure. Past outbreaks have been linked at least in part to animal feeding operations, including a 2018 E. coli outbreak in romaine lettuce. FDA encourages collaboration between neighboring farms to identify areas of concern and tailor their land management to the specific practices and conditions on individual farms.
  • The Consumer Brands Association, The Safe Food Coalition, and The Association of Food and Drug Officials published a joint letter to Janet Woodcock, FDA’s Acting Commissioner of Food and Drugs, expressing their support for FDA’s compliance with the inspection frequency mandates required by the Food Safety Modernization Act (FSMA) and encouraging FDA to utilize state officials to help carry the burden.
  • The letter expresses concerns with FDA’s recently published Resiliency Roadmap for FDA Inspectional Oversight, which states that FDA seeks to work with Congress to allow the agency more flexibility in conducting inspections, specifically it seeks to conduct inspections on a risk-based frequency rather than a congressionally-mandated timeline.  The organizations note that they disagree Congress should step in to revisit the FSMA inspection frequency mandate for domestic food facilities, highlighting that FDA’s existing risk-based inspection strategy is consistent with the FSMA inspection mandate and that inspections are a “critical component of managing foodborne illness risk.” The organizations also suggest FDA lead a stakeholder engagement series to obtain feedback on ways to meet the domestic inspection frequency mandates and gather ideas on how to modernize inspections.
  • By way of background, FSMA requires FDA to inspect domestic food facilities (such as manufacturers/processors) at specified frequencies based on two broad categories of risk. FDA must inspect high-risk U.S. food facilities at least once every three years and  non-high-risk U.S. food facilities at least once every five years. The Resiliency Roadmap showed that FDA is not on track to meet its inspection mandate, in large part because lower-priority inspections were postponed during the COVID-19 pandemic.
  • On June 11, 2021, the FDA will issue its final rule to revoke the standards of identity (SOIs) for lowfat and nonfat yogurt, and amend the SOI for yogurt. The final rule regulates lowfat and nonfat yogurts under the general SOI for yogurt at 21 CFR § 131.200 and 21 CFR § 130.10 (“Requirements for foods named by use of a nutrient content claim and a standardized term”).  This action is in response to a citizen petition filed by the National Yogurt Association (NYA) in 2000 and is part of FDA’s Nutrition Innovation Strategy.  FDA states that the final rule modernizes the yogurt standard “by allowing for greater flexibilities and technological advances in yogurt production.”
  • The final rule permits the use of any optional safe and suitable milk-derived ingredient to increase “milk solids not fat content,” as well as safe and suitable emulsifiers, flavors, color additives, preservatives, cultures, stabilizers, and nutritive carbohydrate sweeteners.  FDA decided to retain reference to “nutritive carbohydrate sweeteners” instead of referring to “sweeteners” to exclude nonnutritive sweeteners.  FDA explained that, to comply with FDA’s regulatory framework under the Nutrition Labeling and Education Act (NLEA), nonnutritive sweeteners may only be added to yogurt under § 130.10 with a corresponding nutrient content claim (e.g., “reduced calorie yogurt”).  The final rule also optionally permits fortification with vitamins A (at a minimum of 10% of the daily value per serving) and vitamin D (at a minimum of 25% of the daily value per serving) and within the limits of current good manufacturing practices.
  • The final rule establishes minimum amounts of live and active cultures for yogurt products to bear the optional labeling statement, “contains live and active cultures.” To bear the label, yogurt must contain at least 107 CFU/g of live and active cultures at the time of manufacture and a reasonable expectation of 106 CFU/g throughout the product’s assigned shelf life.  If dairy ingredients are treated after culturing to inactivate viable microorganisms, the final rule requires a statement of “does not contain live and active cultures” on the label (§ 131.200(f)(1)(ii)). The statement must appear in letters not less than one-half of the height of the letters used in the product name.
  • The final rule is effective on July 11, 2021 and has a compliance date of January 1, 2024.
  • On Friday, June 4, U.S. District Judge James Lorenz denied preliminary approval (subscription to Law360 required) of a General Mills class action settlement due to signs of collusion. The California federal judge said the deal raises questions about whether class counsel really had the consumers’ interests in mind, as the deal offers no money to the class, but a large payout to the attorneys.
  • In December 2017, consumers filed a class action lawsuit against General Mills, claiming that its fruit-flavored snacks (Fruit Roll-Ups) were intentionally mislabeled as all natural. The suit alleged that the products were advertised as “naturally flavored” and containing “no artificial flavors” but contained malic acid.
  • General Mills and the class of consumers recently reached a settlement agreement which would require minimal label changes to the product’s packaging. Under the proposal, General Mills would display an asterisk next to the “no artificial flavors” claim, with the asterisk directing consumers to the company’s website where it would be mentioned that the product may “contain synthetic malic acid or other acidulants” and that “malic acid is intended for use not as a flavor or to impart the characterizing flavor of these products, but is a substance the FDA approves for multiple uses including a flavor enhancer, a flavoring agent or adjuvant, or as a pH control agent.” The settlement would provide no money to class members and instead provide a $725,000 payout to the attorneys for fees and costs. Such an agreement strays far from the class’s original request for monetary relief. The court ultimately found that the settlement falls short of a fair and adequate settlement to resolve the class claims and denied the proposed deal.