• As we previously reported, the National Milk Producers Federation (NMPF) filed a citizen petition with FDA in February 2019 requesting that the agency (1) enforce existing “imitation” labeling requirements against non-dairy substitutes for dairy foods and (2) codify FDA policies to permit the name of a standardized dairy food (like “milk,” “yogurt,” or “cheese”) to be used under limited circumstances. In particular, the petition proposes amending 21 C.F.R. § 101.3(e), FDA’s imitation foods regulation, to require the word “imitation” in product identity statements for non-dairy substitutes unless the product is nutritionally equivalent to the referenced dairy product.
  • On March 19, 2021, the Good Food Institute submitted a comment arguing against the petition, saying that the NMPF’s proposed regulation contravenes the Federal Food, Drug and Cosmetic Act, interpretative case law, and current regulations on “imitation” foods and violates the free speech clause of the First Amendment. Specifically, the comment characterizes the proposal as “needlessly complex and protectionist” and emphasizes its view that plant-based products are not “imitation” products that claim nutritional equivalence under current regulations but are instead alternative or substitute products, using the example that cow’s milk is to soy milk as is canola oil to soybean oil.
  • In addition to a handful of consumer comments, the Plant Based Foods Association had filed a comment also advocating against the amendments proposed by NMPF. Other industry stakeholders had filed comments, which we summarized here, regarding nomenclature concerns with plant-based dairy alternatives in response to an FDA Request for Comments in early 2019.
  • FDA has not yet responded to the comments it received on its 2019 request or NMPF’s citizen petition. We will continue to monitor this issue and report on any developments.
  • Mexico’s Federal Consumer Attorney’s Office (PROFECO) and other Mexican agencies have recently agreed to provide the food industry with more flexibility to comply with requirements in the Official Mexican Standard NOM-051 (“NOM-051”) that become effective on April 1, 2021.  NOM-051 sets forth new warning labeling requirements for all prepackaged food and non-alcoholic beverages sold within Mexico.
  • As we have reported in the past, in late 2020, Mexico’s NOM-051 began requiring manufacturers to place octagonal warning symbols in consumer products that state “Excess Calories,” “Excess Saturated Fat,” “Excess Sugars,” and “Contains Caffeine – Avoid in Children.” NOM-051 imposed a number of other requirements that were slated to become effective on April 1, 2021.  For example, prior to the PROFECO announcement, Clause 4.2.2.1.8 (requiring that all added sugar ingredients be grouped in the ingredient list) and Clause 4.1.5 (prohibiting prepackaged products with FOP warnings from bearing cartoon characters, animations, celebrities, athletes or pets, interactive elements (e.g., such as space games or digital downloads) that appeal to children) were to become effective on April 1, 2021.
  • PROFECO has stated that between April 1, 2021 to May 31, 2021, Mexican authorities will allow companies’ products that comply with already-effective FOP labeling requirements to continue to be marketed even if they do not comply with other requirements that would have otherwise become effective April 1, 2021.
  • On March 17, Utah Governor Spencer J. Cox signed Senate Bill (SB) 147 into law, which requires that egg-laying hens be kept in cage-free systems by 2025. Senator Scott D. Sandall (D-Box Elder) sponsored SB 147 with Representative Joel Ferry (R-Box Elder); both are members of Utah’s farm-rancher community.
  • Beginning on January 1, 2025, a farm owner or operator may not knowingly confine egg-laying hens in an enclosure that is not a cage-free housing system or that has less than the amount of usable floor space per hen as required by the 2017 edition of the United Egg Producers’ Animal Husbandry Guidelines, which establish 1 to 1.5 square feet of floor space per hen. The bill prohibits egg producers from confining hens to cages, and also requires farmers to provide hens perches, next boxes, scratching areas, and other amenities that allow them to “exhibit natural behaviors.” Battery cages, enriched colony cages, modified cages, convertible cages, furbished cages, and other such cage systems are prohibited. However, a farm with fewer than 3,000 egg-laying hens is exempt.
  • With the passage of SB 147, Utah is the eighth state to implement cage-free housing requirements, and joins Michigan, Oregon, Washington, Massachusetts, California, Rhode Island, and Colorado in banning battery cages. According to the USDA’s Agricultural Marketing Serving, nearly 30% of the industry is cage-free.
  • Last week the FDA issued warning letters to Honest Globe, Inc. (March 15, 2021) and Biolyte Laboratories, LLC (March 18, 2021) for selling products containing cannabidiol (CBD) in violation of the Federal Food, Drug and Cosmetic Act (the “Act”).
  • A principle issue addressed by FDA in the letters is the sale of the CBD containing products as unapproved drugs. The CBD products at issue claimed to provide pain relief as well as a variety of other beneficial effects (e.g., anti-inflammatory, anxiety and depression treatment).  Examples of claims include: “Elixicure pain relief with CBD”, “Deep-penetrating natural pain relief . . . non-addictive pain relief”, “relieving depression, lowering anxiety, lowering blood pressure, lowering intestinal inflammation and more”, “demonstrates antiviral, antibacterial, and antifungal effects for virtually every surface and tissue in the body”, “for temporary relief of occasional . . . minor aches and pains . . . Stiffness of muscles, joints and tissues.”  Therefore, consistent with the definition of drug,  the products are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or are intended to affect the structure or any function of the body. Both letters also state that the products do not meet the requirements under section 505G of the Act which would allow them to be marketed without an approved new drug application. Specifically, among other shortcomings, the active ingredient, CBD, was not an active ingredient in any applicable final monograph or tentative final monograph (TFM). Further, even if CBD was considered an inactive ingredient, the products would still not qualify for the 505G exception because CBD does not conform with the general requirement that it be safe and suitable since it has known pharmacological activity with demonstrated risks.
  • The letters also address a number of other deficiencies and violations, including failure to comply with current good manufacturing practices.
  • As we have previously reported, FDA taken the position that CBD is not a lawful dietary ingredient or dietary supplement, but has focused its enforcement efforts on Warning Letters against companies making unsubstantiated health claims. These letters are consistent with that policy. We will continue to monitor and report on any development in CBD regulation and enforcement.

 Candy Maker Accused of Fudging Amounts in Packages (subscription to Law360 required)

  • A putative class action complaint was filed in the U.S. District Court for the Northern District of Illinois on March 18, 2021 against Kilwins Quality Confections, a Michigan-based company with internet sales and franchises in 25 states that make various sweets on-site.  The named plaintiff alleges that a variety of candy,  was mislabeled under state consumer protection laws and food labeling statutes because it contained fewer servings and a higher caloric content than declared.
  • The complaint seeks more than $5 million in compensation for overpayment by consumers over a 5-year period before Kilwins purportedly corrected the alleged labeling violations.  As one example, the plaintiff claims to have paid $16.99 for a jar of Sea-Salt Caramel Topping bearing a label which stated that the jar contained 20 servings of 2-TBL and 110 calories per serving, but actually contained only 16 servings with 140 calories per serving.
  • The claims at issue appear to involve gross misstatements  of the net weight and caloric content on products in a niche market and, therefore, may not portend a new area of scrutiny for class action lawsuits.  Moreover, net weight lawsuits centered on violations of state laws sometimes raise complex preemption issues where different results would follow under a less complicated sampling plan under FDA’s Compliance Policy Guide which calls for selecting a sample of 48 units, and considers the sample to be in compliance if the mean of the sample is within 1% of the declared contents.
  • By way of background, in November 2020, a class action lawsuit was filed asserting various causes of action against Mowi USA, LLC and Mowi Ducktrap, LLC (collectively “Mowi”) arising out of their alleged misrepresentations in marketing smoked salmon products sold under the brand name Ducktrap River of Maine. Specifically, the lawsuit alleged that the salmon products, while represented as sustainable, natural, and sourced from Maine, were in fact the products of unsustainable and environmentally unfriendly industrial farming, not natural because the farmed salmon were treated with antibiotics and pesticides, and sourced from international waters rather than off the coast of Maine.
  • On March 16, 2021, Plaintiffs requested that the Court approve a proposed settlement between the parties. By the terms of the proposed settlement, a fund of $1.3 million would be established to reimburse consumers who had purchased the salmon products between March 1, 2017 and the [yet undetermined] date of entry of the preliminary settlement approval. The class representative plaintiffs would be paid a total of $9000 from this fund and claimants would be reimbursed $2.50 per product purchased, with a $25 limit on reimbursement without proof of purchase. In addition, under the proposed terms, Mowi would pay $360,000 in attorney fees and would be prohibited from using the phrases “sustainably sourced,” “all natural,” and “Naturally Smoked Salmon FROM MAINE” on any Ducktrap product for two years from the date of entry of the judgment.
  • Plaintiffs argued that the court should approve the settlement, in part because the compensation of $2.50 per claim represents a significant increase over the estimated $1.06 premium that the various representations at issue allowed the products to be sold for. Plaintiffs’ motion has been opposed by two intervenors in the litigation who allege that the proposed settlement is driven by attorneys’ fees and does not sufficiently advance the class interests.
  • This case serves as a reminder to substantiate all labeling claims and to tread cautiously when making natural claims, which the FDA has still not yet defined. Keller and Heckman will continue to monitor this case as well as other food consumer class action lawsuits.
  • On March 12, 2021 the U.S. Food and Drug Administration (FDA) published Import Alert 54-18, which relates to the detention without physical examination (DWPE) of dietary supplements and bulk dietary ingredients that are or contain new dietary ingredients (NDIs), ingredients that were not marketed in the U.S. before October 15, 1994, that do not have an appropriate regulatory status.
  • Import Alert 54-18 prohibits two Chinese companies from importing their products that contain higenamine into the U.S.  Higenamine is a dietary ingredient found on FDA’s Dietary Supplement Ingredient Advisory List (“DSIA List”) and which FDA has determined to be adulterated under the Federal Food, Drug, and Cosmetic Act (“the Act”).  In Import Alert 54-18, FDA notes that there is inadequate information to “provide reasonable assurance that such ingredient does not present a significant or unreasonable risk of illness or injury.”
  • By way of background, import alerts inform FDA’s field staff and the public that the Agency has enough evidence to allow for DWPE of products that have been determined to be in violation of the Act.  When a product and/or firm are the subject of an import alert, it will be added to the Red List found on FDA’s import alert, which identifies firms and products subject to DWPE.  To be removed from the Red List, information must be provided to the Agency to demonstrate that the firm has resolved the conditions that gave rise to the violation.
  • FDA has stated that it expects the Agency to use Import Alert 54-18 to identify and deny entry of non-compliant NDIs or products containing NDIs, such as higenamine.  Similar import alerts exist for supplements containing kratom and active pharmaceutical ingredients.
  • On March 16, the FDA released the results of its 2019 Food Safety and Nutrition Survey Report (FSANS) which assessed consumers’ awareness, knowledge, understanding, and reported behaviors relating to a variety of food safety and nutrition related topics. The results are intended to help the FDA make better informed regulatory, policy, education, and other risk-management decisions in order to promote and protect the public health.
  • The FSANS combines the Food Safety Survey (last conducted in 2016) and the Health and Diet Survey (last conducted in 2014). The survey was sent by mail to respondents who could submit online or by mail. Approximately 4,400 responses were collected between October and November 2019.
  • In their press release, the FDA highlighted the following key findings:
    • 87% of respondents have looked at the Nutrition Facts Panel on food packages and mainly look for calories, total sugar, sodium, and serving size.
    • 70% of respondents have seen menu labeling at restaurants. Of those, 53% reported using the calorie information when making food order decisions.
    • Over 80% of respondents have seen claims such as “no sugar added,” “whole grain,” “organic,” “gluten free,” “low fat,” “no artificial ingredients,” “low sugar,” and “no artificial colors.”
    • About 76% of consumers are likely to wash hands with soap after touching raw meat, whereas only 68% would wash hands before preparing food, and only 39% after cracking raw eggs.
    • 62% of respondents own a food thermometer. Usage among those who own food thermometers and cook the food ranges from 85% for whole chickens, 79% for beef, lamb, or pork roasts, to 40% for chicken parts, 36% for burgers, 23% for egg dishes, and 20% for frozen meals.
  • As we reported in 2019, a group of 600 Hawaiian coffee farmers sued a group of coffee sellers, including Walmart, Costco, Amazon, Safeway, Kroger, Cost Plus/World Market, and Bed Bath & Beyond for falsely advertising coffee as “Kona” that did not originate in the Kona region of Hawaii in violation of the Lanham Act. A sister class action was filed by consumers against the same coffee sellers under the same facts, alleging breaches of implied and express warranties, Common Law fraud and intentional misrepresentation. Both complaints centered on the allegation that true Kona-grown coffee is a premium product sought out by consumers for its distinct flavor profile.
  • While the consumer-brought case was voluntarily dismissed without prejudice in May 2019, the farmer-brought suit has reached settlement agreements with the defendants. Most recently, Costco, Marshalls, and Gold Coffee Roasters reached an agreement (Law360 subscription required) on March 9, 2021, approved by the U.S. District Court for the Western District of Washington. In addition to monetary compensation and attorney fees from some sellers, the settlement requires the defendant coffee sellers to follow new labeling guidelines and require vendors to go through a certification process when labeling their coffee as originating in the Kona region. The requirements would bring the sellers into compliance with Hawaii’s strict labeling laws specific to Hawaiian-grown coffee. Earlier this year, the same court approved preliminary settlements with other defendants totaling over $7 million.
  • Kona coffee has been at the center of other claims, most of which have also avoided trial. A March 2019 suit filed against L & K Coffee Co. alleged the defendant’s Magnum Exotics Kona Blend Coffee product could not be characterized as “Kona” because it did not contain enough Kona coffee (the suit was later voluntarily dismissed with prejudice for undisclosed reasons). An April 2020 suit filed against Hawaiian Isles Kona Coffee Company brought on behalf of consumers alleged that testing of the products showed they did not originate from Kona.
  • These claims further highlight the importance of reviewing your labels and advertising to ensure that you accurately portray the geographic origin of your food and ingredients so as to avoid misleading consumers and increasing risk of challenge, especially when the foods and ingredients are considered value-added. Keller and Heckman will continue to monitor and report on activity surrounding such claims.

Kellogg Buyers Say Revised $13M False Ad Deal Is Gr-r-reat! (subscription to Law360 required)

  • As previously covered on this blog, a plaintiffs’ class action lawsuit filed in 2016, and certified for three classes of consumers in 2018, alleges that statements such as “heart healthy” and “lightly sweetened” on various Kellogg cereals are false and misleading because the cereals contain 18 to 40 percent added sugar.  While the outcomes have been mixed in other lawsuits involving nutrition-related claims on breakfast cereals, as discussed here, the Kellogg class action appeared to be moving toward a settlement if the litigants could agree on terms that would be acceptable to the court.
  • On March 10, 2021, the plaintiffs asked the court to approve a revised settlement that they say addresses numerous concerns, including high administrative fees, an overly broad class of consumers, and provisions that would allow Kellogg to reclaim millions if consumers do not act immediately.  If approved, the revised settlement would establish a $13 million fund for payment of around $16.09 each to an estimated 16 million households who purchased the covered products between 2012 and May 1, 2020, as well as administrative fees.  Any unclaimed funds would go to a supplemental distribution to consumers or to the American Heart Association and the UCLA Resnick Center for Food Law and Policy, which were also named as cy pres recipients in a preliminarily approved $15 million settlement, discussed here, of similar claims involving Post breakfast cereals.  The revised settlement would also require that Kellogg refrain for at least one year from using claims such as “heart healthy,” which appears on various Raisin Bran and Smart Start cereals, and “lightly sweetened,” which appears on Frosted Mini-Wheat varieties of cereals.
  • Nutrition claims that could imply the product is healthy seem risky for foods with added sugars based on mixed results in recent litigation and uncertainty about when and how FDA will act on a citizens petition (discussed here) requesting a regulation to establish disqualifying levels of added sugar that would prohibit the use of a “healthy” claim.