•  Our readers will recall a 2019 agreement by the U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) and the Food and Drug Administration (FDA) on joint oversight of the production of cell-cultured products from animals traditionally under FSIS jurisdiction (livestock, poultry, and catfish).  Under the agreement FDA will oversee cell collection, growth and differentiation and FSIS will oversee cell harvesting, processing, packaging, and labeling.  As discussed in detail here, on September 3, 2021, FSIS published an advanced notice of public rulemaking (ANPR) seeking comment on the labeling of cell-cultured meat and poultry products.
  • FSIS announced on November 12, 2021 that in response to several stakeholder requests, the comment period for submitting information solicited in the ANPR on the labeling of cell-cultured meat and poultry products, which was initially set to close on November 2, 2021, will be extended by an additional 30 days.  Among the broad range of questions for comment, the main issue is whether labeling should differentiate cell-cultured products from traditionally slaughtered products, and if so, what terms should be used.  The labels of any cell-cultured meat or poultry products marketed before rulemaking is completed must clearly differentiate the products from slaughtered meat and poultry products, and such labels may need to be changed once final regulations are implemented.
  • The comment period on labeling of cell-cultured meat and poultry products will now end on December 2, 2021.  We will be happy to assist interested parties in submitting comments in response to the ANPR.
  • A bill signed into law in Monroe County, NY this week will prohibit third-party food delivery services from listing, advertising, promoting, or selling a restaurant’s menu item without a written business agreement. This new legislation allows restaurants to request removal of restaurant references or menu item listings from the third-party delivery service website or app, and the delivery service must remove such listings within five days. This is just one of many examples that highlight state government efforts to protect small businesses, especially in light of the Covid-19 pandemic. Many restaurants suffered as a result of the pandemic and struggled to remain open, and some began their own delivery services or privately contracted for such services with third parties.
  • California and New York City are among the list of states and cities that implemented delivery fee regulations for third-party delivery services, ensuring that, among other things, customers are not overcharged in delivery fees and receive itemized receipts that outline cost and fees. These type of caps and restrictions follow complaints that allege third-party delivery services are overcharging consumers and adding businesses to the delivery service without consent. However, consumers will likely not see a decrease in cost for using the delivery service because some of the delivery services now charge a “regulatory response fee” to account for the cap on delivery fees.
  • Additionally, the City of Chicago filed two lawsuits against two major third-party delivery services alleging deceptive and unlawful business practices for misleading consumers into believing that there was a business partnership between the restaurant and third-party delivery service. As a result of these types of complaints, some third-party delivery services are voluntarily (or at the request of the restaurant) removing such listings or references, absent a business agreement with the restaurant, and others are dropping the practice altogether, absent an agreement.
  • Keller and Heckman will continue to monitor this and similar food regulatory issues
  • As previously reported, on July 18, 2021 a proposed class action lawsuit was filed against Dreyer’s Grand Ice Cream Inc. (“Dreyer’s”), the makers of Haagen-Dazs vanilla milk chocolate almond ice cream bars.  The complaint alleges that it is false and misleading to characterize the coating as “milk chocolate” and alleges that the coatings should be described as “milk chocolate with vegetable fat coating” because coconut oil is used.
  • On November 8, 2021, Dreyer’s filed a Motion to Dismiss the claim, arguing that the product delivers “exactly what the front label promises” and that the packaging discloses the presence of oils at least four times in its ingredient list, “the precise place that consumers know to look for objective detailed information about a product’s ingredients.”
  • In support of its position that the labeling is not deceptive, Dreyer’s asserts, “The name of the product is not an ingredient list or an ingredient exclusion list, and no reasonable consumer would think otherwise.” Dreyer’s further argues that private plaintiffs cannot sue to enforce FDA regulations and that violating an FDA food regulation is not, in itself, synonymous with consumer deception.  Keller and Heckman will continue to monitor this case and report on any developments.
  • On November 9, the U.S. District Court for the Southern District of New York dismissed a putative class action against Pepperidge Farm Inc. (subscription to Law360 required). The plaintiff alleged that the cracker product name “Golden Butter” was deceptive because the crackers contained butter, which was the second most predominant ingredient in the ingredient list after flour, and also included non-de minimis amounts of vegetable oils. Aside from the “Golden Butter” name, the plaintiff did not allege that the labeling made other claims about the crackers or their ingredients. U.S. District Judge P. Kevin Castel tossed the suit without providing leave for the plaintiff to amend.
  • As per the complaint, the plaintiff acknowledged that the product “contains butter,” but argued that consumers are misled into thinking they are buying “a cracker which is all or predominantly made with butter” when the crackers also contained vegetable oils. The plaintiff argued that consumers prefer butter-based products over those containing vegetable oils because butter tastes better, is rich in calcium and Vitamins A and D, and does not contain trans fats. According to the complaint, marketing the crackers as “Golden Butter” “misrepresents the product through affirmative misstatements, half-truths and omissions, and deceives, misleads and defrauds consumers.”
  • In his opinion, Judge Castel found that “the packaging accurately indicated that the product contained butter, and the ingredients list confirmed that butter predominated over other oils and fats” and that “a reasonable consumer could believe the phrase ‘Golden Butter’ refers to the product’s flavor and was not a representation about the ingredient proportions.” The judge further went on to note that the complaint did not plausibly allege why a reasonable consumer would believe that the use of butter precluded secondary usage of vegetable oils.
  • As our readers know, this was the second butter-related suit in a week to be dismissed in the Southern District of New York, with the first being a putative class action against Bimbo Bakeries USA Inc. These decisions demonstrate that deceptive flavor labeling cases are not likely to survive a motion to dismiss, at least in the Southern District of New York, unless the label or claims are unambiguous or clearly misleading.
  • On October 29, 2021, the Department of Health and Human Services (HHS) issued a proposed rule to withdraw or repeal the final rule entitled “Securing Updated and Necessary Statutory Evaluations Timely” (SUNSET rule), which would require almost every regulation administered by HHS to be periodically reviewed, or else face automatic expiration. As we have previously blogged, in an April 2021 response to a lawsuit seeking to overturn the rule, HHS stated that it anticipated issuing a proposed rule to repeal the SUNSET rule; it has now done so.
  • As a brief recap, subject to certain limited (and unclear) exceptions, the final SUNSET rule provided that all HHS regulations would expire at the end of (1) five calendar years after the effective date of the SUNSET rule, (2) ten calendar years after the regulation’s promulgation, or (3) ten calendar years after the last year in which HHS assessed and/or reviewed a regulation. The first time period (review within five years) would apply to the estimated 12,400 HHS regulations that are over ten years old.
  • The proposed rule outlines HHS’ reasoning behind its proposal to withdraw/repeal the SUNSET rule, including the following rationales:
    • The SUNSET rule would require a massive reallocation of resources to retrospectively review existing regulations. This resource intensive process would undermine HHS’ ability to fulfill its missions, promote national priorities, and respond to public health threats, including the COVID-19 pandemic.
    • The SUNSET rule contains many ambiguities which would need to be operationalized, including the scope of the rule’s exceptions and the required timing of assessments.
    • Given the massive scale of the required review (and its infeasibility), it is very likely that at least some regulations would automatically expire.
    • The possibility of the expiration of regulations and their actual expiration would create great regulatory uncertainty that would be harmful to all stakeholders, including the public and industry, and in particular, small businesses who may not have the resources to keep track of and adjust to regulatory developments. Also, certain industries, including the drug industry, are particularly vulnerable to the consequences of regulatory instability because their products are developed over a lengthy multi-year period. Furthermore, states may respond to regulatory gaps at great cost by creating a regulatory patchwork of their own.
    • The SUNSET rule potentially violated the Administrative Procedure Act (APA) by providing insufficient time for stakeholders to comment and by allowing regulations to expire without a particularized consideration of the expired regulation.
  • Comments to the proposed rule are due by December 28, 2021. HHS is requesting comment on whether it should modify, rather than repeal or withdraw, the SUNSET rule.

Bimbo Beats Suit Over Entenmann’s ‘All Butter’ Cake Label (subscription to Law360 required)

  • On November 4, 2021, the U.S. District Court for the Southern District of New York dismissed with prejudice a putative class action against Bimbo Bakeries USA Inc.  The plaintiff alleged that “All Butter” on Entenmann’s “All Butter Loaf Cake” is deceptive because the cake contains not only butter, but also soybean oil and artificial flavors.  The judge’s memorandum starts with the notable observation, “This case is the latest in a long string of putative class actions brought by the same lawyer alleging that the packaging on a popular food item is false and misleading.”
  • As with the term “100% Grated Parmesan,” an ambiguity that was found to be resolved by the readily accessible ingredient statement in another recent false advertising case, which is discussed at length in the court’s opinion, the Entenmann’s case turned on whether “All Butter” in the product’s name is susceptible to only one clear interpretation and, if not, whether the ambiguous claim is cured by other information on the label.  In the Entenmann’s case, the court found that the plaintiff’s own pleadings confirm the description “All Butter” is ambiguous because the original complaint alleged a reasonable consumer would expect butter to be the only shortening ingredient whereas the first amended complaint proffered that “All Butter” tells consumers that no butter substitutes are used for any ingredient function where butter could be used.  Moreover, the court found that no reasonable consumer would take “All Butter” to mean the product contains no other ingredient because, taken literally, that would mean the product is a stick of butter.  Thus, citing the “100% Grated Parmesan” case and recent dismissals in other false advertising cases where a prominent label on food packaging is ambiguous, but the ambiguity is resolved by reference to the list of ingredients, the court granted Bimbo Bakeries’ motion to dismiss.
  • The Entenmann’s decision makes it increasingly clear that cases alleging a deceptive food label will not likely survive a motion to dismiss unless the label in question is either clearly unambiguous and misleading or any ambiguity is not readily resolved by reading the label.
  • Earlier this week Maine voters approved an amendment to the state’s constitution. ‘Right to Food’ is a statewide measure that was placed on the ballot by the Maine Legislature and gives Maine residents an unalienable right to grow, raise, produce, and consume food of their choice. Under this amendment, Maine residents may create their own food supply, whether statewide or in silos. However, it does not impact food assistance programs, and references to food processing and preparation that would have conflicted with state and federal laws regarding the licensing and inspection of food were removed from the measure.
  • Maine has been at the forefront of the food sovereignty movement, passing its food sovereign laws under the Maine Food Sovereignty Act in 2007, which was amended in 2017.  The vision behind Maine’s food laws is to create a food system where producers have control over how their food is grown, sold, and distributed. The latest constitutional amendment allows Maine residents to have more control over their food supply by allowing residents to save and exchange seeds, as well as to produce, consume, and sell their own food.
  • While the ‘Right to Food’ amendment provides more individual control over food supply and sourcing, there are concerns over the potential food safety and environmental risks that the new amendment poses. A number of organizations and associations opposed the bill on this ground, alleging that such control of the food supply would provide a means of circumventing existing food safety standards and regulations.  Ultimately, court challenges may significantly impact the scope of the amendment.
  • Keller and Heckman will continue to monitor this and similar food regulatory issues.

 

  • On October 21, 2021, a coalition of 23 Attorneys General petitioned FDA to expedite setting heavy metal standards for baby foods. The petition echoes criticism that FDA’s Closer to Zero plan does not include adequately aggressive timelines for reducing heavy metals in baby food.
  • Under FDA’s Closer to Zero plan, FDA would propose guidance on limiting lead in baby food by the middle of 2022, guidance for limiting inorganic arsenic by April 2024, and guidance for limiting cadmium and mercury after April 2024. The AG petition calls on FDA to take the following actions by April 2022:
    • Propose science-based, achievability-focused interim limits for inorganic arsenic, lead, cadmium, and mercury in relevant categories of infant and toddler foods;
    • Propose a lower limit for inorganic arsenic in infant rice cereal than the 100 parts per billion level that is currently set forth in FDA guidance; and
    • Instruct all baby food manufacturers to test their finished products for toxic heavy metals.
  • The AG petition follows a wave of class-action lawsuits against baby food manufacturers and a congressional report  that was released in February 2021.  Keller and Heckman will continue to monitor this matter and report on any developments.
  • On October 27, a California federal judge denied certification to a proposed class of consumers who were allegedly misled by Unilever’s marketing of Breyers’ Natural Vanilla ice cream (subscription to Law360 required). As previously blogged, lead plaintiff Lisa Vizcarra sued Unilever in April of 2020 for allegedly misleading consumers into thinking the ice cream contained natural vanilla flavors despite laboratory tests showing that the vanilla flavor was not derived from the vanilla plant. Vizcarra brought claims under the Consumer Legal Remedies Act and the Unfair Competition Law, and asked for injunctive relief. Unilever’s motion to dismiss was denied in July of 2020.
  • In the present proceeding, U.S. District Judge Yvonne Gonzalez Rogers held that Vizcarra did not meet the predominance and commonality requirements necessary for class certification. As written in the court order, Judge Gonzalez Rogers noted “Vizcarra has pointed to no common evidence showing that consumers understood the vanilla representations – which are comprised of the term ‘natural vanilla,’ and images of two vanilla beans, vanilla flowers, and a scoop of the ice cream with black specks – as indicating that the ice cream at issue would be flavored exclusively with vanilla from the vanilla plant.”
  • To support her allegations, Vizcarra used surveys conducted by expert witness, Dr. J. Michael Dennis, which purportedly showed that almost 80% of consumer respondents expected the vanilla flavor to come from the vanilla plant. However, Judge Gonzalez Rogers found the surveys to be flawed because “Dr. Dennis’ survey did not test the effect of vanilla representations, and instead tested the entire package, which contains other statements and elements that are not challenged in the complaint and, therefore, the survey says nothing as to whether the survey respondents’ expectations as to the ice cream at issue were caused by the vanilla representations as opposed to something else.”
  • Vizcarra’s lawsuit is one of dozens involving products that are claimed to contain deceptive and misleading information on their labels regarding vanilla. Keller & Heckman will continue to monitor and provide updates regarding vanilla products and other class action litigation in the food industry.
  • Yesterday FDA issued a guidance document to clarify and improve the Temporary Marketing Permit (TMP) application process.
  • By way of background, Section 403(g) of the Federal Food Drug and Cosmetic Act (codified at 21 U.S.C. § 343) prohibits the sale of any food for which a standard of identity (SOI) is prescribed if the food does not conform to the SOI or if it is not named accordingly. However, FDA may issue TMPs allowing the sale of a food which does not conform with the applicable to SOI if it determines that the sole purpose of the TMP is to generate market data to support a petition amending a SOI, the data sought by the TMP is necessary for the intended purpose, and consumers are adequately safeguarded. See 21 C.F.R. § 130.17.
  • FDA is in the process of modernizing its SOIs to promote innovation and allow for greater flexibility. As part of this effort, and in response to industry feedback, the TMP guidance document provides the following clarifications and changes to the TMP application process:
    • Multiple standardized foods may be included on a single TMP.
    • Multiple companies may submit a single TMP if the requested deviation is the same, but the TMP will be issued to each company individually.
    • The default test period authorized by a TMP is 15 months, but longer periods may be granted upon a showing of good cause. Extensions may also be requested.
    • A single representative label for each market-tested food is all that is required.
  • By issuing this guidance, FDA is reminding, and perhaps encouraging, the food industry to use the TMP approach with regard to the use of standardized food names on alternative products.