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Federal judge tosses final claim in tomato farm’s lawsuit against FDA. (subscription to Law360 required)

  • In June 2008, FDA mistakenly linked a multistate Salmonella outbreak to tomatoes and warned consumers about the potential dangers associated with the consumption of raw red tomatoes in New Mexico and Texas.  Federal and state officials struggled to track the actual source of the contamination, and in the meantime, numerous tomato growers across the southeastern states were affected by the negative publicity and uncertainty surrounding the safety of tomatoes.  FDA’s investigation ultimately would find that raw peppers grown in Mexico were responsible for this particular Salmonella outbreak.  Multiple tomato growers sued FDA to recoup their losses.  In one long-running case, a tomato farm sued FDA for defamation, unfair trade practices, unlawful taking, and negligence.  In 2012, a South Carolina federal judge dismissed first three claims, leaving open only the question of FDA’s negligence.
  • On December 16, the judge dismissed the negligence claim, ending the case against the Agency.  The farm had argued that FDA acted negligently in issuing an overbroad tomato “recall” despite the Agency’s failure to link the contamination event to any particular tomato.  FDA’s action and the ensuing negative publicity allegedly resulted in a loss of $15 million in the value of the farm’s tomato crop.
  • Although the judge did not provide any reasoning in his dismissal of the case, a prior ruling suggests that the negligence claim stemmed from alleged misrepresentation and was barred by the Federal Tort Claims Act (FTCA).  (The government generally is immune from suit, but has provided a limited waiver of that immunity in the FTCA).  This dismissal follows closely on the heels of the November 2015 dismissal of a lawsuit by another farm seeking to recover $11 million lost during the tomato recall.  The fate of the tomato cases highlights the uphill battle that regulated industry can face in trying to recoup losses that stem from negative publicity associated with foodborne illness outbreaks.

The Daily Intake is taking a holiday hiatus and will return on January 4, 2016.  We wish you a joyous holiday season and a happy new year. 

USDA issues final rule imposing new recordkeeping requirements on beef producers to improve traceability.

  • The U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) regulates the safety of meat products in the United States.  In recent years, FSIS has struggled with limits on its ability to trace the source of foodborne illness outbreaks involving ground beef.  For example, a 2011 outbreak of Salmonella in the northeastern states was difficult to trace because retail stores had mixed and ground cuts of beef from various sources and had not kept records of suppliers on file.  In response to that outbreak, FDA published a proposed rule in 2014 to require official establishments and retail stores to maintain records related to suppliers and source materials.
  • FSIS now has issued a pre-publication version of a final rule to amend recordkeeping requirements for official establishments and retail stores that grind raw beef products for sale in commerce.  Specifically, all such establishments must maintain the following records:  (1) the establishment numbers of establishments supplying material used to prepare each lot of raw ground beef product; (2) all supplier lot numbers and production dates; (3) the names of the supplied materials, including beef components and any materials carried over from one production lot to the next; (4) the date and time each lot of raw ground beef product is produced; and (5) the date and time when grinding equipment and other related food-contact surfaces are cleaned and sanitized.  These requirements also apply to raw beef products ground at the request of an individual customer when new source materials are used.  Records must be retained for one year after the date of the recorded grinding activity.
  • FSIS believes the final rule will provide a significant improvement in traceback capabilities that will facilitate recall efforts, stop outbreaks, and prevent additional foodborne illnesses.  Establishments will have 180 days after publication in the Federal Register to comply with the new recordkeeping requirements.

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.

FDA issues warning about bacterial contamination in tattoo inks.

  • FDA has the authority to regulate the safety of cosmetics in the United States.  Tattoo inks meet the statutory definition of a “cosmetic,” which means:  “(1) articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and (2) articles intended for use as a component of any such articles; except that such term shall not include soap.”  FD&C Act § 201(i) (underlined emphasis added).
  • FDA has issued a warning to tattoo artists and consumers not to use certain tattoo inks due to potential microbial contamination.  FDA tested the inks in the course of assisting the Florida Department of Health in its investigation of an outbreak of mycobacterial infections in individuals who recently got tattoos.  In the course of testing, FDA detected bacteria — including Mycobacterium chelonae — in unopened bottles of inks.  The manufacturer currently is conducting a recall of affected product.
  • Although FDA enforcement action in the cosmetic arena is relatively rare, FDA’s public warning and the adverse publicity surrounding tattoo ink contamination serves a reminder of the Agency’s authority in this space.

FDA announces FSMA-related fees for FY 2016.

  • The FDA Food Safety Modernization Act (FSMA) authorizes FDA to collect fees associated with domestic and foreign facility reinspections, recall order noncompliance, and reinspections of importers.  Regarding facility reinspection, FDA plans to assess a fee where it reinspects a facility to evaluate corrective actions taken in the wake of a prior inspection that revealed noncompliance materially related to food safety requirements of the Federal Food, Drug, and Cosmetic Act (FD&C Act).  Regarding recall noncompliance, FDA plans to assess a fee where a firm fails to initiate or implement a recall in a manner consistent with the Agency’s order.  FDA has not yet determined how it will assess fees related to importer reinspection.
  • FDA has announced the fiscal year (FY) 2016 fee rates applicable to the activities above based on its estimate of 100% of the costs associated with each activity for the year.  Fees will be assessed based on the number of direct hours spent on reinspections or on taking action in response to a firm’s failure to comply with a recall order.  The hourly fee rates for FY 2016 are $221 (where domestic travel is required) and $315 (where foreign travel is required).
  • To date, FDA has not yet assessed any fees under the circumstances described above.  In a FSMA FAQ, FDA has indicated that it “does not intend to issues invoices for reinspection or recall order fees” until it has published guidance on various issues related to the assessment of fees (e.g., the types of noncompliance that will trigger fees, fee reduction procedures for small businesses, issues related to importer reinspections).  Although FDA has not yet begun to collect fees under FSMA, and the Agency has not yet exercised its mandatory recall authority, FSMA implementation is well underway and major rules are due to be published in the very near future.  In the meantime, the food industry should remain aware of FDA’s authority to assess fees under certain circumstances and should stay tuned for Agency guidance and future developments in this area.

U.S. food recalls have nearly doubled over the past decade.

  • Food recalls occur with relative frequency in the United States, with the reasons for such recalls ranging from labeling issues to food safety concerns, such as potential contamination with pathogens like Salmonella, Listeria, or E. coli.  FDA posts up-to-date information regarding food recalls on its website.
  • A recent analysis published by a prominent reinsurance company, Swiss Re, indicates that both the number and the costs associated with U.S. food recalls have almost doubled since 2002.  According to the analysis, 52% of all food recalls cost the affected companies more than $10 million, a figure that does not include costs associated with any reputational damage resulting from the recall.
  • These statistics serve as a reminder of the importance of good risk/crisis management strategies and the potentially significant value of a robust recall insurance policy.

ConAgra to pay $11.2 million in connection with Salmonella outbreak.

  • In 2006-2007, Peter Pan peanut butter produced by ConAgra Foods, Inc. was recalled in connection with a nationwide Salmonella Tennessee outbreak.  The outbreak resulted in hundreds of infections and hospitalizations across 44 states.  The contamination ultimately was traced to plant and equipment conditions in a Georgia facility.  In 2011, the federal government launched a criminal investigation into the matter.
  • To resolve the investigation, ConAgra has agreed to plead guilty to a single misdemeanor violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act).  Under the plea agreement, the company would pay a fine and forfeiture in the amount of $11.2 million.  The plea agreement must be approved by the U.S. District Court in Albany, Georgia.
  •  The ConAgra situation serves as a reminder to industry that the FD&C Act is a criminal statute with potentially severe financial and other penalties for violations.  Although many FDA enforcement actions ultimately are resolved before turning into criminal proceedings, plea agreements of this nature show that FDA (working through federal prosecutors) can impose significant consequences for companies when problems in a facility are linked to outbreaks of foodborne illness.

First lawsuit filed in wake of Blue Bell listeriosis outbreak.

  • In recent months, Texas-based Blue Bell Creameries has recalled all of its products after the company’s ice cream was linked to listeriosis outbreaks in multiple states, resulting in hospitalizations and deaths.  FDA published an update alerting consumers to the issue and released a series of inspectional observations from Blue Bell production facilities, indicating the company’s awareness of positive tests for Listeria monocytogenes in one plant as far back as 2013.  We speculated that class action lawsuits were likely to follow.
  • As anticipated, the first lawsuit has now been filed.  The affected consumer states that he contracted a severe listeriosis infection after consuming Blue Bell products in 2013 and alleges that Blue Bell acted with gross negligence for failure to use adequate sanitation in its plant to prevent product contamination.  The complaint includes specific references to the inspectional observations that FDA recently made public in connection with Blue Bell’s product recall.
  • The lawsuit filed in this case is unlikely to be the last that Blue Bell faces in connection with the listeriosis outbreak.  Again, it serves as a reminder to industry that FDA regulatory violations can trigger significant product liability and litigation implications where human health consequences result.

USDA issues final rule implementing new labeling requirements for mechanically tenderized beef.

  • The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) regulates the quality, safety, and labeling of meat and poultry products marketed in the United States.
  • On May 13, 2015, FSIS announced new labeling requirements for raw or partially cooked beef products that have been mechanically tenderized.  The new requirements will take effect in May 2016, one year after publication of the rule in the Federal Register.  Under the new requirements, raw or partially cooked beef products must bear labels stating that they have been mechanically, blade, or needle tenderized.  Cooking instructions also must appear on product labels to facilitate safe preparation by consumers.  According to FSIS, the need for new labeling requirements arises because the tenderizing of meat by mechanical means can introduce pathogens from the surface of the cut to the interior, making proper cooking very important.  Mechanically tenderized products are indistinguishable in appearance from intact product, which makes labeling the only way to convey the importance of safe preparation to consumers.
  • This regulatory development fits into the continuing conversation about the sufficiency of FSIS’ authority to assure the safety of the U.S. meat supply.  With this year’s reintroduction of a bill in Congress to grant FSIS mandatory recall authority over contaminated meat and poultry, it remains to be see what legislative or regulatory developments will be next in this space.

FDA issues public update regarding listeriosis outbreak linked to ice cream products.

  • FDA has many tools in its arsenal to prevent and respond to food contamination issues; these include the Agency’s inspection power and various enforcement authorities (e.g., warning letters, mandatory recall orders in class I situations, administrative detention, seizure, suspension of facility registration).  In addition to its formal authorities, the Agency also has at its disposal the power of publicity.
  • Over the past two months, Blue Bell Creameries conducted a series of high-profile recalls after its ice cream products were linked to listeriosis outbreaks in multiple states, resulting in hospitalizations and deaths.  As of April 20, 2015, Blue Bell voluntarily expanded its recall to include all products currently on the market due to potential contamination with Listeria monocytogenes.  On May 7, 2015, FDA published an update on its website alerting consumers to the scope and nature of the problem and releasing a series of inspectional observations from Blue Bell production facilities in three states.  The inspectional observations indicate that one processing facility was aware of positive tests for Listeria monocytogenes in the plant as far back as 2013.
  • Media outlets quickly began publicizing FDA’s findings, focusing on Blue Bell’s alleged longstanding awareness of a potential problem.  It will not be surprising if a host of class action lawsuits are filed in the wake of this negative publicity.  Situations such as this should serve as a reminder to the food industry that above and beyond FDA’s traditional enforcement tools, the Agency’s power of publicity should not be underestimated.

FDA publishes draft guidance on mandatory food recalls.

  • Among other things, the FDA Food Safety Modernization Act (FSMA) granted the Agency the authority to order a responsible party to recall food if there is a reasonable probability that the food is adulterated or misbranded and that use of or exposure to the food will cause serious adverse health consequences or death to humans or animals (i.e., a “Class I recall”).
  • On May 6, 2015, FDA published draft guidance for industry, in the form of questions and answers, on how FDA will use its mandatory food recall authority.  The draft guidance includes a description of the process FDA will follow when the Agency decides to move forward with a mandatory food recall; on making this determination, the Agency “must first provide . . . an opportunity to voluntarily cease distribution and recall the article of food.”  User fees and civil penalties may be imposed not only for failure to initiate a recall as ordered by FDA, but also for failure to conduct the recall “in the manner specified by FDA” or for not providing FDA with requested information related to the recall.  The guidance identifies evidence the agency “might” consider when making the decision to proceed with a mandatory recall, including:
    • Observations made during inspections of the responsible party or other parties;
    • Results from sample analyses;
    • Epidemiological data;
    • Reportable Food Registry data; and
    • Consumer and trade complaints.
  • The draft guidance highlights that FDA’s mandatory food recall authority gives the Agency greater leverage than ever over the industry in a potential recall situation.  FDA has invoked its mandatory recall authority twice so far; although in both cases the companies ultimately voluntarily recalled affected product, FDA’s actions show the Agency is not afraid to flex its mandatory recall muscle.