• As of January 1, 2024, California’s Proposition 12 law is fully in effect. Passed as a ballot measure in 2018, Prop 12 prohibits the sale in California of meat and eggs produced under certain farming practices. We have previously covered Prop 12 extensively, including its introduction, finalized regulations, and a Supreme Court case challenging its constitutionality.
  • Under Prop 12, farm owners and operators may not knowingly cause any covered animal to be confined in a cruel manner, meaning chickens, breeding pigs, and calves must not be confined in an enclosure that fails to comply with standards specified for each species. Eggs, veal, and pork products that do not comply with these standards are banned from sale in California.
  • In addition to a requirement for each species to be able to lie down, stand up, fully extend limbs, and turn around freely:
    • Egg-laying hens must be in a controlled environment that allows hens to exhibit natural behaviors, and must meet the United Egg Producers’ Guidelines for Cage-Free Housing;
    • Veal calves must have at least 43 square feet of floorspace per calf; and
    • Breeding pigs must have at least 24 square feet of usable floorspace per pig.
  • Prop 12 has faced industry opposition since its introduction, culminating in a 2023 Supreme Court case that found the law is not an unconstitutional violation of the dormant Commerce Clause. Most recently, a Missouri senator has introduced a bill that would preempt Prop 12. The bill has been referred to the Senate Agriculture, Nutrition, and Forestry Committee.
  • Keller & Heckman will continue to monitor Prop 12’s impacts as it is implemented.

As the federal government continues to wrestle with the complex issue of regulating Artificial Intelligence (AI) in the wake of the release of President Biden’s Executive Order, states have already proposed or enacted AI regulation, and even more will attempt to tackle the issue in 2024. Two recent developments in AI regulation from California and New Hampshire highlight different approaches states are taking in the absence of federal preemption. In the meantime, the European Union is also proceeding with efforts to flesh out a regulatory framework for AI. Inconsistencies and operational challenges are already apparent in reviewing these frameworks. What does this mean for businesses and consumers? 

  • CPPA Releases Draft Automated Decisionmaking Technology Regulations
    • The California Privacy Protection Agency (CPPA) has released draft Automated Decisionmaking Technology (ADMT) regulations. The CPPA Board discussed the proposal at its December 8 meeting, but formal rulemaking is not expected to begin until next year.

      As provided for in the California Consumer Privacy Act (CCPA), the draft ADMT regulations implement a consumer’s right to information about a business’s use of ADMT as well as the right to opt-out of a business’s use of the technology to process consumer data. The CPPA proposes to define ADMT as “any system, software, or process—including one derived from machine-learning, statistics, or other data-processing or artificial intelligence—that processes personal information and uses computation as whole or part of a system to make or execute a decision or facilitate human decisionmaking.” The CPPA also makes clear that the definition includes profiling. To read more about the expectations of the draft CCPA regulations, click here.
  • New Hampshire’s AI Code of Ethics
    • Earlier this year, New Hampshire released a Code of Ethics for the Use and Development of Generative Artificial Intelligence (GAI) and Automated Decision Systems (ADS).  The Code broadly alludes to the benefits and use cases of GAI and ADS, but also acknowledges the risks that can be associated with the technology. To learn more about NH’s AI Code of Ethics including the fundamental rights, ethical principles, and technical/social requirements, click here. 
  • European Union: Automated Decisionmaking Case Law and AI Legislative Progress
    • The reaching of a political agreement on the EU AI Act was widely relayed in the media, but this is not the end of the saga regarding the European Union’s general legislation on artificial intelligence, as that political agreement still has to be translated into legal wording and technical annexes. Those details will be significant for the scope of the obligations with which businesses have to comply. To learn more about how businesses will be affected by the EU AI Act and how the General Data Protection Regulation (GDPR) is already regulating decisionmaking, click here.

It is clear that the potential impact AI will have on consumers and employees is prompting discussions around the world on appropriate regulatory responses. While there are common themes and concerns, governments will likely differ in their approaches. That will create ongoing compliance challenges while policies are debated. The objectives for civil society remain to develop approaches for stakeholders to work together to identify and manage risks of AI while promoting innovation to realize the benefits and efficiencies it may also bring. For a detailed analysis of CCPA’s draft regulations, New Hampshire’s AI Code of Ethics, and the EU AI Act, click here. 

  • The UK Office for Sanitary and Phytosanitary Trade Assurance commissioned the Foods Standards Agency (FSA) to profile the potential risks of importing oysters into the United Kingdom in the hopes of mitigating possible issues.  The study comes after FSA assessed the public health risk of raw oysters earlier this year to help develop risk management options during norovirus outbreaks.
  • Chemical and microbiological hazards were identified, which include heavy metals, natural biotoxins, viral and bacterial pathogens, and persistent organic chemicals.  Allergens and physical hazards were excluded. 
  • The UK currently imports approximately 350,000 kilograms of oysters per year.  The main exporters to the UK include South Korea, France, and New Zealand.  Although consumption surveys indicate that the general population rarely eats oysters, oysters are considered a high risk product.  This is largely due to their filter feeding, which allows bioaccumulation of hazards and likelihood for raw consumption.
  • The main hazards identified in the supply chain were Vibrio parahaemolyticus; marine biotoxins (such as amnesic, paralytic, and lipophilic toxins); hepatitis A virus (HAV), norovirus and Salmonella; heavy metals like cadmium mercury and lead; and diseases caused by other Vibrio species.
  • Control measures at different stages of the supply chain will vary with hazard type.  Control measures during harvest can include suspension of activity, transfer of live animals to cleaner sites, or altering onward processing requirements.  During processing, purification can be achieved through re-immersion in clean water.  At the consumption phase, there are various options to help reduce risk: labeling and traceability, education of workers on cold chain breaches and contamination, and advice on avoiding raw products by vulnerable groups.
  • FDA is continuing to investigate the elevated lead levels in cinnamon used in applesauce pouches that were recalled beginning October 31, 2023. Most recently, inspectors collected samples that the cinnamon supplier sold to the applesauce manufacturer, finding extremely high levels of lead contamination at 5,110 parts per million (ppm) and 2,270 ppm. For context, the Codex Alimentarius Commission is considering adopting 2.5 ppm as the maximum level for lead in cinnamon, among other similar spices.
  • To date, there have been approximately 65 reported cases of children displaying symptoms of lead toxicity related to the applesauce pouches. FDA has not found evidence that any other products, including pouches from the same brands that do not contain cinnamon, are related to the recall. The pouches implicated in the recall have been traced back to a manufacturer and cinnamon supplier in Ecuador, and FDA is working closely with Ecuadorian officials who are conducting their own investigation.
  • FDA has theorized that lead may have been intentionally added to the cinnamon in a case of economic adulteration. Nevertheless, FDA is continuing its investigation and has provided a timeline that it will continue to update as the investigation progresses.
  • Keller and Heckman will continue to monitor and provide updates on this investigation.
  • On December 13, 2023, the U.S. Food and Drug Administration (FDA) provided a reorganization proposal for the unified Human Foods Program (HFP) and new Office of Regulatory Affairs (ORA) model.  The proposed reorganization package is currently under review at the U.S. Department of Health and Human Services (HHS).  FDA hopes implementation of the plans will occur sometime in 2024.
  • In addition to previous announcements, FDA’s proposed reorganization package includes the following new updates:
    • Making the FDA’s HFP and product Centers solely responsible for receipt, triage, and closing consumer and whistleblower complaints, rather than this role being split between Centers and field Offices.
    • Renaming ORA as the Office of Inspections and Investigations (OII) and solidifying its role as the frontline of FDA’s field-based inspection, investigation, and import operations.
    • Establishing an Office of the Chief Medical Officer (OCMO) in the Office of the Commissioner to strengthen central coordination of cross-agency medical issues, including special populations such as people with rare diseases and children.  This includes a new Office of Public Health Preparedness and Response to support medical countermeasure policy, emergency preparedness work, and medical product shortage coordination across the agency.
    • Merging the Office of Counterterrorism and Emerging Threats (OCET) and the Office of Regulatory Science and Innovation (ORSI) to form a new office; both offices are currently housed within the FDA’s Office of the Chief Scientist (OCS).
    • Creating an Office of Enterprise Transformation, which will work across FDA to drive high-priority cross-cutting business process improvement efforts.
  • Before the proposal is implemented, it must be reviewed by the Office of Management and Budget.  FDA must also provide Congress with a 30-day notification period, issue a Federal Register notice, and engage in all necessary negotiations with Union representing impacted staff
  • Keller and Heckman will continue to monitor this reorganization process and will relay any developments.
  • Today FDA announced an update to its Menu Labeling Supplemental Guidance which addresses implementation of menu nutrition labeling requirements. The menu labeling rules only apply to standard menu items offered by “covered establishments,” which are defined as restaurants and similar retail food establishments with 20 or more locations doing business under the same name and offering for sale substantially the same menu items, as well as restaurants and similar retail establishments that register to voluntarily subject themselves to the menu labeling requirements. (21 CFR 101.11).
  • The menu labeling regulations require disclosure of calories on menu and menu boards, and require that other nutrition information (e.g., fat, sugar, protein) be available in written form on the premises and provided to the customer upon request. Notably, the menu labeling regulations do not require disclosure of “added sugars” as is now required on packaged foods.  
  • The draft update includes two new Q&As which (1) clarify that nutrition information can be provided on third party platforms (TPPs) through which food is ordered and delivered and (2) that added sugars may voluntarily be declared.
  • Although FDA accepts comments on any guidance at any time, comments on the draft new Q&As are due by February 12, 2024, to ensure they are considered before FDA begins work on final versions.
  • On December 7, 2023, several members of the House of Representatives introduced the Innovative Feed Enhancement and Economic Development Act (Innovative FEED Act). The bill was also introduced in the Senate earlier this year.
  • If approved, the Act will amend the Federal Food, Drug and Cosmetic Act (FDCA) to add a new category of animal feed ingredients that do not fit neatly into the current categories of animal drug or animal food. “Zootechnical animal food substances” would be defined as substances added to the food or drinking water of animals intended to “lower food pathogens, reduce byproducts for animals, or affect its gut microbiome.” These substances should achieve their intended affect by “acting solely within the gastrointestinal tract of the animal.” The ingredients would follow FDA’s existing food additive petition process, and the bill would add specific petition requirements to Section 409 of the FDCA. In addition, the bill would establish labeling requirements for zootechnical food substances.
  • According to a press release from Congressman Greg Pence, one of the representatives who led the introduction of the bill, zootechnical animal food substances will provide more tools for farmers, reduce FDA review times of feed additives, and spur innovation in feed ingredients. The bill has received support from various industry groups that have recognized it as a tool for a modernized feed ingredient approval framework and a driver for nutritional innovation.
  • Keller and Heckman will continue to monitor this bill.
  • Spencer Sheehan is an extraordinarily prolific plaintiff’s lawyer who works primarily in the food space. By his own count, he filed 440 class actions between 2020 and spring 2023. He monopolized the field of filing lawsuits against vanilla flavored products for a period, and was the subject of an NPR profile featuring his suit against Strawberry Pop-Tarts (alleging that they were mostly apple and pear) as well as other high-profile articles.
  • As one judge in the Northern District of Illinois put it in May, Sheehan has a habit of pushing the same legal theories “time and again, in case after case, without much success.” The judge admonished Sheehan that his “losing streak should tell you something” and ordered him to file a spreadsheet showing every case he had filed based on a similar legal theory since 2020. Finally, noting the significant amounts of attorney’s fees Sheehan had caused companies to run up with his frivolous filings, the judge ordered Sheehan to show cause why he should not have to pay the defendant’s legal fees. The court has not taken any further action in the case since.
  • Instead, in July, the Northern District of New York noted frivolous cases filed by Sheehan in that district, in addition to two admonitions directed at him by judges in the Southern District of New York concerning the same conduct. In addition to the court’s allegations, Sheehan also had to face an amicus filing by another company he had targeted. According to that filing, Sheehan had responded to the company’s threats of a sanctions motion by saying, “So go file your rule 11 motion I hear such sanctions threats from people like you all day long.” The court issued its order holding him in contempt last week, but reserved decision on the nature of the final sanctions Sheehan will face.
  • Keller and Heckman will continue to follow and be available to assist with defending against class actions in the food and packaging space.
  • As a direct response to California’s Proposition 12, Missouri Senator Josh Hawley has introduced the Protecting Interstate Commerce for Livestock Producers Act with the goal of protecting farmers from state regulations that some critics have claimed will hurt their business and drive up costs for consumers.
  • As we have previously blogged, the U.S. Supreme Court in May upheld California’s Proposition 12, which requires that eggs, veal and pork products sold in California must be from animals raised in enclosures meeting certain minimum size requirements, regardless of where the animals were raised. It is estimated that California accounts for 13% of all pork consumption in the US.
  • Senator Hawley’s bill aims to “protect family farms from going bankrupt and consumers from shouldering higher costs at the grocery store,” according to the senator’s press release.  He states that, “Missouri’s livestock producers keep food on the table across America and they shouldn’t be burdened by costly laws – made by other states – that disrupt interstate commerce, drive-up costs, and impose crippling regulations.”
  • To ensure that no state can mandate animal welfare standards in another state, the bill proposes to accomplish the following:
    • Preempt states and local governments from regulating the raising, production, and importation of livestock or livestock-derived good from another state or local government;
    • Allow states to regulate the importation of livestock in the event of animal disease; and
    • Protect farmers from states implementing laws that are preempted by this bill.
  • Keller and Heckman will continue to monitor this bill and will relay any developments.
  • On November 29, 2023, USDA’s Agricultural Marketing Service (AMS) published a final rule updating the National Bioengineered Food Disclosure Standard’s (the Standard) List of Bioengineered (BE) Foods (the List) by adding “sugarcane (Bt insect-resistant varieties)” and amending “squash (summer)” to “squash (summer, coat protein-mediated virus-resistant varieties).”
  • AMS is required to review the List on an annual basis. We have previously blogged about earlier versions of these proposed updates to the List (in the form of a request for comments and a proposed rule) and the final form of these updates includes more precise descriptions which is intended to capture only BE foods.
  • The presence a food ingredient on the List (or an ingredient derived from one on the List) in a food establishes a presumption that the food is a BE food requiring a BE disclosure. If a food is on the List, but is not a BE food, then records must be kept rebutting the presumption of its BE status. However, conversely, a food may be a BE food even if it is not on the List, and in all cases a BE disclosure is required if a regulated entity has actual knowledge that a food is BE.
  • The effective date of this final rule is December 29, 2023, but per the Standard, regulated entities have 18 months from the effective date to comply.