Parties settle “Made in USA” lawsuit in California. (subscription to Law360 required)

  • As previously covered on this blog, a product may bear a “Made in USA”-type (MIU) claim in accordance with federal guidelines where “all or virtually all” of the product is made in the U.S.  Until a recent statutory change, California’s MIU claim standard had been much stricter, prohibiting such claims if any unit or part of the product has been entirely or substantially made outside of the U.S.  Major lawsuits have been filed based on allegations that components or ingredients of manufactured products bearing MIU claims came from foreign sources, in violation of the “zero-tolerance” policy.  One high-profile lawsuit — David Paz et al. v. AG Adriano Goldschmied Inc. et al. (S.D. Cal.) — now has settled, with the defendants — Nordstrom and a denim manufacturer — agreeing to pay $4 million to the plaintiff class.  The case was based on allegations that jeans sold at retail bore MIU claims although the fabric, thread, buttons, rivets, and components of the zipper assembly were produced outside of the U.S.  Although this settlement concludes the instant case — and possibly may serve as precedent for settlements in other pending cases involving similar allegations — a judicial disposition might have produced a more nuanced analysis or a closer examination of the limits (if any) of California’s prior zero-tolerance standard.

New York City’s sodium warning requirement takes effect.

  • As previously covered on this blog, New York City (NYC) health officials adopted the nation’s first sodium warning requirement.  The rule requires restaurants that are part of chains with more than 15 locations nationwide to display a salt shaker icon on menus and menu boards next to any food item with a high sodium content (>2,300 mg of sodium) or on tags next to any food on display that is a food item with a high sodium content.  Restaurants also must post the following statement conspicuously at the point of purchase:  “Warning: [salt shaker icon] indicates that the sodium (salt) content of this item is higher than the total daily recommended limit (2300 mg).  High sodium intake can increase blood pressure and risk of heart disease and stroke.”  The rule took effect on December 1, 2015.  Although the rule is now effective, the National Restaurant Association has indicated that it plans to sue the NYC health department over the requirements.  It remains to be seen whether opponents will challenge the rule, and if so, whether such a challenge will succeed.

K&H publishes summaries of FSMA final rules related to produce safety standards, foreign supplier verification program, and third-party certification program.

As promised, Keller and Heckman LLP has prepared summaries of FDA’s final rules to implement the produce safety standards, the foreign supplier verification program (FSVP), and the third-party certification program under the FDA Food Safety Modernization Act (FSMA).  A brief synopsis and a link to the summary of each rule appears below:

  • Produce Safety:  The produce safety standards apply to farms engaged in the growing, harvesting, packing, or holding of raw agricultural commodities (e.g., fruits, vegetables) for human consumption.  The final rule sets standards related to agricultural water; biological soil amendments; sprouts; domesticated and wild animals; worker training and health and hygiene; and equipment, tools and buildings, among other things.  The final rule is effective January 26, 2016, but companies generally have 2 years from the effective date to comply, i.e., January 26, 2018.  Covered farms have an additional two years to comply with certain agricultural water requirements, and compliance dates for covered activities related to sprouts are sooner (generally, one year from the effective date, i.e., January 26, 2017).  Click here for our summary of the final produce safety rule.
  • FSVP:  The FSVP rule generally requires importers to conduct a range of activities to ensure that food from foreign suppliers is produced in compliance with applicable food safety provisions, including, but not limited to, HARPC requirements or produce safety standards.  The final rule is effective January 26, 2016, but companies generally have 18 months from the date of publication to comply, i.e., May 28, 2017.  Click here for our summary of the final FSVP rule.
  • Third-Party Certification:  This rule establishes an FDA accreditation system to govern bodies that conduct food safety audits and issue certifications for facilities and food.  Once FDA implements its third-party accreditation program and entities have become accredited in accordance with program guidelines, regulated industry will be able to receive certifications from such entities.  FDA has indicated that it may use certifications:  (1) as a condition of entry for certain foods that FDA has determined may pose a safety risk; and (2) to facilitate participation in the Voluntary Qualified Importer Program (VQIP) that will give importers expedited review and entry of imported food into the U.S.  The final rule is effective January 26, 2016, although ultimate implementation depends on when FDA finalizes its model accreditation standards.  Click here for our summary of the final third-party certification rule.

We will continue to monitor and report on FDA’s activities to implement these rules and other FSMA related activities.  Please email fooddrug@khlaw.com and let us know if you have any questions or if you would like to discuss the impact of the final rules or any other FSMA related issues in the meantime.

Mandatory USDA catfish inspections to start March 2016.

  • FDA regulates the majority of the U.S. food supply, while the U.S. Department of Agriculture (USDA) exercises jurisdiction over meat, poultry, and egg products.  Although FDA historically has regulated fish and fishery products, the 2008 Farm Bill required FDA to divest its authority over the inspection of Siluriformes fish (including catfish) to USDA’s Food Safety Inspection Service (FSIS).
  • On November 25, 2015, FSIS issued a final rule to establish an inspection program for domestically-raised and imported Siluriformes fish.  As of the March 2016 effective date, all fish in this category will shift from FDA’s to FSIS’s jurisdiction.  The rule establishes the system by which FSIS will:  (1) conduct inspections at domestic establishments that slaughter and process Siluriformes fish and (2) re-inspect and conduct species and residue sampling on imported Siluriformes fish shipments.
  • The upcoming catfish inspection program is controversial, with some industry stakeholders asserting that USDA inspection will provide a marketplace advantage, while others believe it is a waste of regulatory and taxpayer resources.  Still others suggest that the catfish inspection program represents an illegal trade barrier that could serve as fodder for a costly future dispute before the World Trade Organization (WTO).

FDA targets cucumbers and hot peppers as part of its FY 2016 sampling program.

  • Since 2014, FDA has been developing a robust surveillance sampling program intended to promote food safety.  The Agency’s sampling approach involves the collection of a statistically determined number of samples of targeted foods over a 12- to 18-month period and the testing of samples for microbial contaminants.  During the first year of the program, FDA focused on sampling sprouts, whole fresh avocados, and raw milk cheese; the Agency collected more than 800 samples in total and tested them for the presence of Salmonella, Listeria monocytogenes, and E. coli O157:H7.  FDA plans to release data from the completed sampling/testing soon.
  • For fiscal year 2016, FDA has indicated its intent to sample and test cucumbers and hot peppers for Salmonella and E. coli O157:H7, taking 1,600 samples of each commodity.  Hot peppers also will be tested for Shiga toxin producing E. coli.  The Agency will conduct whole genomic sequences on any samples that test positive.
  • According to FDA, the data and results generated as part of its sampling program will be used to inform the agency’s “short and longer term decision making.”  With respect to individual companies and facilities that produce the sampled commodities, positive tests may serve as the basis for follow-up inspections or enforcement action.  From a broader, industry-wide perspective, the results of the sampling program could influence the Agency’s risk classification of particular commodities and its approach to future sampling and regulation.  It also remains to be seen whether FDA’s plan to release test results will have a positive or negative impact on consumer perception and the market for sampled commodities.

FDA denies Citizen Petition requesting mandatory labeling of foods derived from GM crops.

  • In recent weeks, there has been significant FDA activity related to the regulation of genetically modified (GM) foods and ingredients.  Specifically, the Agency recently issued new guidance on GM labeling; approved the first GM animal for human consumption; and requested comments on its “natural” policy, posing specific questions related to whether the use of GM technology should influence or preclude the use of “natural” terminology.
  • On November 19, 2015, FDA formally denied a 2012 Citizen Petition filed by the Center for Food Safety, rejecting the group’s request for mandatory labeling of foods derived from GM crops.  In its response, the Agency noted that the key issue is not the process by which crops are produced — i.e., whether via conventional hybridization or use of GM technology — but whether GM crops materially differ from their conventional counterparts in terms of salient features such as nutritional properties, allergenicity, and toxicological profile.  FDA acknowledged the existence of consumer interest in GM foods and GM labeling issues, but noted that consumer interest alone does not provide a sufficient basis for FDA to mandate labeling of such foods.
  • FDA’s response to the Citizen Petition is consistent with its historical position that it is the product, and not the process, that ultimately must drive the need for labeling distinctions between GM and “non-GM” foods.  The Agency’s response has been received positively by the food and biotech industries, with many stakeholders hoping that it will spur continued Congressional efforts to enact a voluntary GM labeling bill that would preempt state-imposed mandatory labeling requirements (including those looming in Vermont).

The Daily Intake will return on Monday, November 30.  We extend our best wishes to those of you celebrating the upcoming Thanksgiving holiday.

FSIS issues updated food allergen guidelines.

  • The Food Allergen Labeling and Consumer Protection Act of 2004 (FALCPA) requires that the label of an FDA-regulated food that contains an ingredient that is or contains protein from a “major food allergen” declare the presence of the allergen in the manner described by the law.  FALCPA does not apply to products under USDA’s jurisdiction, i.e., meat, poultry, and egg products, but the Food Safety and Inspection Service (FSIS) encourages the use of FALCPA-consistent allergen statements.
  • In November 2015, FSIS released an updated guidance document to assist USDA-regulated establishments with evaluating and addressing the risks posed by allergens in their products.  Although the guidance does not impose any legal obligations, it represents FSIS’s current thinking on “best practices” for allergen-related controls, packaging, labeling, storage, checklists, and training, among other topics.
  • Although FALCPA allergen declaration requirements do not apply, USDA-regulated products still must bear accurate ingredient declarations.  The failure to identify the presence of an allergen or an ingredient of public health concern means that the label is false and misleading, and the product is misbranded and adulterated.  In the past few years, the number of recalls of USDA-regulated products attributable to the presence of undeclared allergens has increased.  In particular, several recalls have been related to the use of release agents that contain soy lecithin and the subsequent failure to declare the presence of this ingredient on the label of the finished food.  Particularly because FSIS often takes a stricter approach to requesting recalls where undeclared allergens are present — even where a risk analysis may indicate no reasonable risk of consumer harm — meat, poultry, and egg producers should familiarize themselves with the allergen guidance and develop appropriate compliance strategies to mitigate the risk of allergen-related recalls.

Sugar and corn syrup producers settle their $1.1 billion false advertising lawsuit.

  • As recently covered on this blog, sugar and corn syrup producers have been waging a high-stakes courtroom battle centering around an allegedly false advertising campaign run by the Corn Refiners Association (CRA) that promoted high fructose corn syrup (HFCS) as nutritionally identical to sugar.  Some anticipated a jury verdict in December.
  • Just days after the sugar industry concluded its case-in-chief, the parties reached a settlement agreement to end the case.  The terms of the settlement agreement remain confidential, and it is unclear which specific factors (if any) prompted the mid-trial agreement.
  • The abrupt and quiet end to this case means a lost opportunity for a considered verdict that would have had to address the truthfulness and accuracy of the advertising claims at issue, including a determination regarding whether HFCS is nutritionally equivalent to sugar.  Although such a verdict would not necessarily have settled this ongoing debate, it would have established significant precedent and likely would have prompted additional lawsuits regardless of which side prevailed.  The joint statement issued by the parties regarding the settlement was neutral in tone, stating that both industries “continue their commitments to practices that encourage safe and healthful use of their products, including moderation in the consumption of table sugar, high fructose corn syrup, and other sweeteners.”  Although this particular battle has concluded, we suspect that the war over sugar — and in particular, “added sugar” — is far from over.

Sweeping federal probe leads to numerous charges against dietary supplements makers.

(subscription to Law360 required)

  • Dietary supplement makers have come under fire in recent years as federal and state regulators have ramped up efforts to weed out fraudulent dietary supplements from the marketplace.  As previously reported on this blog, earlier this fall, the U.S. Department of Justice (DOJ) identified “illegal activity in the dietary supplement industry” as a high priority for the Agency.
  • Earlier this week DOJ, together with several other federal agencies (including the FDA, the Federal Trade Commission, the Internal Revenue Service, the Department of Defense, the U.S. Anti-Doping Agency), and the U.S. Postal Inspection Service (USPIS), announced a number of criminal and civil actions brought against those selling and marketing fraudulent dietary supplements, colloquially referred to as “21st-Century snake oil”, including an 11-count DOJ indictment against dietary supplement manufacturers USPlabs LLC and S.K. Laboratories Inc. and several of their executives. The DOJ also filed five civil cases seeking injunctive relief against a number of businesses and people who allegedly sold supplements as disease cures or otherwise broke the law in matters investigated by USPIS and the FDA.  These include U.S. v. Clifford Woods LLC, doing business as Vibrant Life, et al., a case in California federal court that accuses the defendants of illegally selling Taheebo Life Tea and other products as treatments for diseases including Alzheimer’s disease and cancer; U.S. v. James R. Hill, doing business as Viruxo, a suit in Florida federal court that claims Hill sold Viruxo as a treatment for herpes; and U.S. v. Lehan Enterprises Inc., doing business as Optimum Health, et al., a case in Massachusetts federal court that alleges the defendants sold products as treatments for conditions and diseases including arthritis and cancer.
  • These charges and the continued attention dietary supplements are sure to receive in the coming months and years serve as a reminder to industry to ensure adequate substantiation for any claims made about finished products or their ingredients.

After years of silence, FDA issues new guidance on GMO labeling.

  • In 1992, FDA published a “Statement of Policy” which addressed, among other things, the labeling of foods derived from plants developed by bioengineering. The 1992 policy states that FDA has no basis for concluding that bioengineered foods differ from other foods in any meaningful or uniform way, or that, as a class, foods developed by the new techniques present any different or greater safety concern than foods developed by traditional plant breeding.  Accordingly, the 1992 policy did not establish special labeling requirements for bioengineered foods.  In 2001, FDA published a guidance document reaffirming the Agency’s decision to not require special labeling of all bioengineered foods.  The document also offered guidance on the use of voluntary labeling indicating whether foods have or have not been developed using bioengineering.
  • In guidance released today, FDA revisited the topic of voluntary labeling regarding whether food is derived from genetically engineered plants.  Today’s guidance is largely consistent with that issued in 2001; although FDA no longer takes the position, as it did in 2001, that the terms “GM” and “GMO” should be avoided because consumers do not understand these acronyms, the Agency continues to discourage use of the terms “GM” and “GMO,” though it does not intend to take enforcement action against either claim at this time, provided the statement is true and the food’s label is not otherwise misleading.
    • The agency discourages use of the unqualified terms “not genetically modified” or “no genetic modification” because these terms can encompass any alteration to genetic composition, including traditional breeding techniques. In place of these terms, the Agency recommends the terms “not genetically engineered,” “not bioengineered,” and “not genetically modified through the use of modern biotechnology.”
    • FDA discourages use of the term “genetically modified organism” and the abbreviation “GMO” because most foods do not contain entire organisms.
  • FDA also reiterated its position that the terms “free” or similar terms, such as “does not contain GMOs” and “non-GMO,” convey “zero or total absence” and, given the potential for adventitious presence of bioengineered material, the Agency is skeptical as to whether a “GMO-free” claim could be substantiated.  Today’s guidance did not indicate that the Agency intends to exercise enforcement discretion with respect to “free” claims.
  • Whether FDA’s action will have an impact in Congress, where Sen. Debbie Stabenow (D-Mich.) and Rep. Mike Pompeo (R-Kan.) are working to address the issue of federal preemption of state GMO labeling laws, remains to be seen.  Although litigation over Vermont’s GMO labeling law is ongoing, many industry leaders see federal legislation as the more promising avenue to prevent the labeling law from going into effect, given the approaching July 2016 effective date.

FDA Proposes Rule on ‘Gluten-Free’ Requirements for Fermented, Hydrolyzed and Distilled Foods

  • In August 2013, FDA issued a final rule on voluntary “gluten-free” food labeling.  The final rule defined “gluten-free” as meaning that the food either is inherently gluten free or does not contain an ingredient that is:
  1. a gluten-containing grain (e.g., spelt wheat);
  2. derived from a gluten-containing grain that has not been processed to remove gluten (e.g., wheat flour); or
  3. derived from a gluten-containing grain that has been processed to remove gluten (e.g., wheat starch), if the use of that ingredient results in the presence of 20 parts per million (ppm) or more gluten in the food.

Additionally, any unavoidable presence of gluten in the food must be less than 20 ppm.

  • The final rule noted the uncertainty in interpreting the results of current test methods for detecting gluten in fermented and hydrolyzed foods.  Yesterday, FDA issued a proposed rule to provide alternative means for the agency to verify compliance with the gluten-free labeling requirements for fermented and hydrolyzed foods and foods that contain fermented or hydrolyzed ingredients.  Under the proposed rule, manufacturers of such foods would be required to make and keep records demonstrating that:

    • the food meets the requirements of the gluten-free food labeling final rule prior to fermentation or hydrolysis;
    • the manufacturer has adequately evaluated its process for any potential gluten cross-contact; and
    • where a potential for gluten cross-contact has been identified, the manufacturer has implemented measures to prevent the introduction of gluten into the food during the manufacturing process.

With respect to distilled foods and ingredients, the proposed rule would also clarify that, for enforcement purposes, FDA will use a scientifically valid method to measure protein content and must find no detectable protein present in the distilled food or ingredient.

  • The proposed rule would affect the labeling of foods and food ingredients such as yogurt, hydrolyzed soy protein, distilled vinegar, and FDA-regulated beers (i.e., beers that are not made from malted barley and hops).  The rule may also have implications for beers regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), as TTB has stated it “may revise [its gluten content statement] policy after FDA issues a final rule or other guidance with respect to fermented and hydrolyzed products.”  Comments on FDA’s proposed rule may be submitted via Regulations.gov (Docket Number FDA-2014-N-1021) through February 16, 2016.