Food & Beverage Litigation Update | November 2017 #2

by Shook, Hardy & Bacon L.L.P.
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LEGISLATION, REGULATIONS & STANDARDS

Senators Urge USDA to Implement GMO Labeling

Several Democratic senators, with Sen. Bernie Sanders (I-Vt.), have sent a letter to the head of the U.S. Department of Agriculture (USDA) urging Secretary Sonny Perdue to prioritize “consumer-friendly solutions” as the Agricultural Marketing Service undertakes a rulemaking process on the labeling of food made with genetically modified organisms (GMOs). “All Americans have the right to know what is in their food and how their food is produced,” the group argues.

The letter asks Perdue to “consider, and work to address, the obstacles Americans would face while attempting to access GE ingredient information through digital or electronic disclosures,” noting that about one-quarter of American adults do not own a smartphone, which would allow them to scan QR codes on packaging to access ingredient information.

 

USDA Announces Delay for Organic Livestock Rule

The U.S. Department of Agriculture (USDA) has delayed the effective date of the Organic Livestock and Poultry Practices final rule until May 14, 2018. The rule’s original effective date was set for January 19, 2017. According to the announcement, “significant policy and legal issues addressed within the final rule warranted further review by USDA.” In September 2017, the Organic Trade Association sued USDA for delays in the effective date, including a request for an order to enjoin the agency from further postponing the rule’s implementation.

 

FDA Allows Use of Formic Acid, Ammonium Formate in Animal Feed

The U.S. Food and Drug Administration (FDA) has announced an amendment to food additive regulations to provide for the use of formic acid and ammonium formate in animal feed and drinking water. Taking effect November 13, 2017, the amendment limits formic acid and salts to 1.2 percent in complete feeds. FDA will accept comments or requests for a hearing until December 13, 2017.

 

Wine Growers Disagree on Geographical Indicators in Trade Negotiations

Amid trade negotiations among the European Union, Japan and Mexico, American manufacturers and winemakers have urged the United States to exert influence on the issue of geographical indicators. In October 2017, a group of food and beverage producers—including the California Wine Institute—asked the Trump administration to express concerns to Mexico and Japan about limiting the use of common names and terms. While the organizations do not object to the protection of some geographical indicators, such as “Idaho Potatoes” or “Parmigiano Reggiano,” the EU “has been aggressively seeking to confiscate generic terms that derive from part of the protected name or are otherwise in common usage, such as ‘parmesan,’” the letter argued.

In response, a group of U.S. wine growers has urged the Trump administration to encourage Japan and Mexico to allow the protection of wine place names. “While we are fully aware of the controversial nature of place names in the food industry, we hope you understand that the issue is far less controversial in the world of wine,” the letter asserts. “The U.S. government can effectively support increased exports of U.S. wines from U.S. winegrowing regions by allowing for the continued protection of winegrowing place names. That is why we urge you not to intervene with Japan or Mexico to narrow the scope of wine place names protected by their agreements with the European Union.”

 

FDA Releases Supplemental Draft Guidance for Menu Labeling

In accordance with an August 2017 announcement, the U.S. Food and Drug Administration (FDA) has released supplemental draft guidance on menu-labeling requirements to address concerns raised by restaurant franchisees, grocery and convenience stores that sell “grab-and-go” food, and others affected by the rule, which is scheduled to take effect in 2018. The guidance provides details on: (i) criteria for covered establishments; (ii) distinctions between menus and marketing materials; (iii) various methods for calculating and disclosing calorie information; (iv) seasonal or special menu items; (v) compliance; and (vi) enforcement. The labeling requirements apply to restaurants or food retailers that are part of a chain of 20 or more locations doing business under the same name and offering substantially similar menu items.

Among the non-binding recommendations for labeling include placement of signs “adjacent to, and clearly associated with” the food for sale or on signs attached to sneeze guards; establishments can also use a single sign or placard listing multiple food items. Packaged food can carry a “front-of-pack” calorie declaration such as a sticker. The full calorie count must be disclosed for multiple-serving menu items such as whole pizzas or family-style portions, but retailers may also display the number of suggested servings and calorie counts for each serving. In addition, items or menu boards must include calorie information even if calorie counts are disclosed online.

Stating that its goal is “cooperative” compliance, FDA indicated that it will not penalize “minor violations” such an inadvertently omitted calorie declaration, minimal errors in calorie calculations or calorie rounding errors. If establishments fail to comply with violation notices, FDA will use its enforcement tools for misbranding under the Federal Food, Drug and Cosmetic Act.

The requirements have been previously been supplemented with guidance and delayed multiple times, resulting in an advocacy group’s lawsuit that has been stayed.

 

Farm Groups Protest USDA Decision to End FFPR

More than 80 agricultural trade and advocacy groups have sent a letter to the White House requesting immediate action to implement the Farmer Fair Practices Rules, which would allow farmers to take legal action against foreign and multinational corporate entities to challenge anti-competition practices and contracts to produce livestock and poultry. The U.S. Department of Agriculture previously announced it would not implement the rules, which had been in development since 2010 and were scheduled to take effect April 19, 2017. Signatories include farmer and rancher groups, dairy producers and organic producer associations as well as Food & Water Watch, Friends of the Earth, Slow Food USA and the Union of Concerned Scientists.

 

Scotland Opens Diet and Health Proposals to Public Comment

The Scottish Government is seeking public comment on a consultation that proposes actions to improve diet and reduce obesity in Scotland. The government previously announced funding of more than $55 million over five years to limit the marketing of food high in fat, sugar and salt and provide weight-loss support for people with type 2 diabetes. The consultation, which is open through January 31, 2018, asks questions about promotions and marketing, “out of home” or restaurant eating, labeling, product reformulation and taxes on sugar-sweetened beverages or similar products. Scotland is also considering proposals to limit “junk food” advertising and provide support for small and mid-sized food manufacturers to reformulate and develop healthier products.

 

WHO Recommends Ending Use of Antibiotics in Healthy Animals

The World Health Organization (WHO) has announced the availability of guidelines recommending against the routine use of antibiotics in healthy animals. WHO cited a meta-analysis funded by the agency and reported in The Lancet concluding that interventions restricting antibiotic use could be effective in reducing antibiotic resistance.

“Scientific evidence demonstrates that overuse of antibiotics in animals can contribute to the emergence of antibiotic resistance,” a WHO representative said. “The volume of antibiotics used in animals is continuing to increase worldwide, driven by a growing demand for foods of animal origin, often produced through intensive animal husbandry.”

 

LITIGATION

“Granules” In Chicken Salad Caused Illness, Lawsuit Alleges

A consumer has filed a lawsuit alleging that she became ill after eating a chicken salad containing “hard, gray-colored granules” with a “foul odor and taste” at a location of Bojangles Famous Chicken ‘n Biscuits. Green v. Bojangles Restaurants, Inc., No. 17-2936 (D.S.C., removed to federal court October 30, 2017). The plaintiff asserts that she ordered a Roasted Chicken Bites salad that contained the granules, which she ate because she purportedly thought they were pieces of feta cheese. The plaintiff contends that she immediately became ill and vomited at the restaurant, while her husband took the granules to the restaurant owner, who apparently indicated he would have them tested at a laboratory. The plaintiff also argues that after the incident, she developed “nodules or growths” in her throat that remained for about 18 months. Claiming strict liability, breach of implied warranty, negligence, negligence per se and loss of consortium, the plaintiff seeks actual and punitive damages.

 

Coconut Water Maker Faces “Cold-Pressed” Putative Class Action

A consumer has filed a putative class action alleging Pure Brazilian’s “cold-pressed” coconut water undergoes high-pressure processing that “reduces the biological, enzymatic and bacterial activity” of the water, allegedly amounting to false advertising and fraud. Khallili v. Pure Brazilian LLC, No. 17-6425 (E.D.N.Y., filed November 5, 2017). The complaint asserts that high-pressure processing not only changes the nature of the product but increases its shelf life; “highly perishable” warnings on the bottle mislead consumers into believing the coconut water is unprocessed by making it appear similar to competing products that have a shorter shelf life, the plaintiff argues. The complaint also alleges that the product is sold at a premium price compared to coconut waters made with similar high-pressure processing. Claiming violations of New York consumer-protection laws, false advertising, fraud, implied warranty of merchantability and unjust enrichment, the plaintiff seeks class certification, damages, injunctive relief and attorney’s fees.

 

Snyder’s-Lance Appeals TTAB Denial of Pretzel Crisps Trademark

Snyder’s-Lance, Inc. has filed a lawsuit in North Carolina federal court appealing a Trademark Trial and Appeal Board (TTAB) ruling that found the term “Pretzel Crisps” to be generic, arguing that TTAB “failed to consider all the evidence of the public’s perception of the Pretzel Crisps brand, despite clear direction from the Federal Circuit to do so.” Snyder’s-Lance, Inc. v. Frito-Lay N. Am., Inc., No. 17-0652 (W.D.N.C., filed November 6, 2017). TTAB initially deemed “pretzel crisps” generic after Frito-Lay opposed Snyder’s-Lance’s application for a trademark; that decision was vacated by the Federal Circuit and remanded for reconsideration.

Snyder’s-Lance argues that during seven years of litigation, its Pretzel Crisps brand has become a market leader and is now the “number one product in the entire ‘deli cracker’ section in which it principally competes.” The complaint also asserts that “both Frito-Lay and the TTAB panel agreed that ‘pretzel crackers’ generically and appropriately describes the product category.” Snyder’s-Lance alleges that TTAB erred by considering the words “pretzel crisps” as separate parts rather than as a brand name with an established secondary meaning. The company seeks review of the ruling and declaratory judgment.

 

MEDIA COVERAGE

New York Times Editorial Criticizes Fear of Food Ingredients

Aaron Carroll, a professor at the Indiana University School of Medicine, argues in a New York Times editorial that “panic-du-jour” about unhealthy foods encourages people to unnecessarily live “in terror or struggling to avoid certain foods altogether.” Carroll asserts that the repeated condemnation of various food ingredients—including fat, cholesterol, meat, monosodium glutamate, genetically modified organisms and gluten—“shows how susceptible we are to misinterpreting scientific research and how slow we are to update our thinking when better research becomes available.”

For example, fewer than one percent of Americans have a wheat allergy or celiac disease, Carroll states, but at least one in five regularly chooses gluten-free foods. “Gluten-free diets can lead to deficiencies in nutrients such as vitamin B, folate and iron. Compared with regular bagels, gluten-free ones can have a quarter more calories, two and a half times the fat, half the fiber and twice the sugar. They also cost more,” he notes.

Carroll argues that Americans do not appear to consider scientific opinions about food safety, resulting in a fear of food. “[B]eing afraid of food with no real reason is unscientific—part of the dangerous trend of anti-intellectualism that we confront in many places today.”

 

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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