This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.
- Lawsuit against energy bar manufacturer will proceed. On August 19, the US District Court for the Northern District of California rejected Clif Bar’s motion to dismiss a lawsuit that asserts the company deceived consumers about the nutritional value of its products. The lawsuit claims Clif Bar has been duping consumers by selling its bars as wholesome and nutritious, while they are actually “loaded with sugar.” The lawsuit is one of many that have been filed recently that make similar assertions – that a product that contains a great deal of sugar is being marketed as healthful. The court called the plaintiffs’ claims “plausible” and said it was not persuaded by Clif Bar’s argument that the sugar levels in its bars are below the daily value recently defined by the FDA for added sugar.
- Tillamook is target of lawsuit over the source of its milk. A lawsuit filed August 19 by four Oregon consumers, backed by the Animal Legal Defense Fund, accuses the Tillamook County Creamery Association of misleading consumers about the source of its milk. The association's dairy products are “made from milk from the largest industrial dairy in the country that confines tens of thousands of cows on concrete in the desert of eastern Oregon,” the complaint, filed in Oregon state court, stated. The lawsuit said that the association, which is owned by about 80 Oregon families, presents to the consumer a bucolic image of a dairy brand that gets its milk from cows that graze on small local farms, while in fact most of the milk comes from industrial-scale factory farms. The association said in a statement that it “adamantly disagrees with the allegations made in the lawsuit” and “will aggressively defend ourselves.”
- Feature article examines the burgeoning legal battles over plant-based meats. A lengthy article in The Washington Post on August 25 examined the recent dramatic growth of the vegetable-derived meat-substitute industry, with new products such as Impossible Burger and Beyond Meat causing consternation for makers of traditional meat products. The article pointed out that this year, officials in nearly 30 states have proposed bills to prohibit companies from using words such as meat, burger, sausage, jerky or hot dog unless the product came from an animal that was born, raised and slaughtered in the traditional way. It noted that Arkansas, Louisiana, Mississippi, North Dakota, South Dakota, Oklahoma and Wyoming have already enacted such laws. One major difference that the article pointed out between traditional veggie burgers and the current wave of products: today’s products are not intended as a niche offering for vegans and vegetarians but rather as an effort to imitate meat as closely as possible and ultimately to supplant it.
- Cell-based meat companies form new trade group. As the federal government continues to decide how to regulate meat products that are grown from animal cells, five companies that plan to market such products have formed a coalition to represent the new industry’s interests before Congress and the regulatory agencies. The new group, which got started on August 29, is called the Alliance for Meat, Poultry & Seafood Innovation. None of these products is yet on the market. The companies use a technology that takes animal cells and multiplies them in a high-tech factory setting to form chicken nuggets, burgers or seafood products. The preferred term for the products is "cell-based meat" or "cultured meat." The coalition said that its members “understand that cell-based/cultured meat, poultry and seafood is one solution that will help fulfill the increased demand for meat as the global population grows to 10 billion people.”
- FDA warning letter puts papaya industry, and food sector, on notice. An FDA warning letter issued August 26 is also serving as a warning to the food industry that the agency is stepping up its enforcement of food safety laws. The warning letter to Mr. and Mrs. Andres Lopez, owners of food importer Agrosons LLC of the Bronx, New York, “summarizes evidence that your firm engaged in a pattern of importing or offering for import adulterated food that presented a threat of serious adverse health consequences or death to humans or animals.” Cavi brand whole fresh papayas imported by Agrosons are linked to a current outbreak of Salmonella, as well as earlier multistate outbreaks of Salmonella in 2011, 2017 and 2019. Agrosons is the sole US distributor of Cavi brand papayas. Agrosons’ long-term actions, the FDA stated in the warning letter, may lead to serious regulatory action, including “debarring you for a period of up to five years from importing articles of food or offering such articles for import into the United States.” See the FDA warning letter.
Also on August 26, Acting FDA Commissioner Ned Sharpless and Deputy Commissioner for Food Policy and Response Frank Yiannas announced the agency is ramping up its enforcement of food safety laws, and this new level of oversight is beginning with the entire papaya industry. Sharpless and Yiannis pointed to eight outbreaks since 2011 “caused by Salmonella serotypes linked to imported, fresh papaya.” Their statement said, “While the 2019 outbreak is ongoing, the first seven outbreaks accounted for almost 500 reported cases of illness, more than 100 hospitalizations, and two deaths." And, they continued, “This trend has to stop.” The announcement from Sharpless and Yianna outlined preventive food safety steps for every part of the papaya supply chain, “growers, packers, shippers and retailers.”
And on August 27, Agrosons again denied any wrongdoing and asserted it is contemplating vigorous legal action in response to the FDA’s moves. In July, when FDA asked the importer to issue a voluntary recall, the company refused, instead contacting its distributors directly and posting messages on its website and social media calling the FDA conclusions erroneous. On Facebook, Agrosons said, “the FDA’s continued assertion that our papayas are the source of recent Salmonella illnesses is patently false” and the FDA has “no evidence” to substantiate its claims. The company did remove the implicated fruit from commerce, however.
- US and Canada act against contaminated diced chicken. On August 21 and later, on August 24, the Centers for Disease Control and Prevention and the Canadian Food Inspection Agency issued recall notices for diced chicken distributed in both nations by Ontario-based Rosemount Sales and Marketing. The chicken is contaminated with Listeria monocytogenes and is linked to an outbreak that to date has sickened 24 people in the US and 7 people in Canada. Canadian public health officials reported that the collaborative international outbreak investigation tracked down the implicated foods through whole genome sequencing. The Rosemount chicken products were sold primarily to hotels, restaurants and institutional entities, such as nursing homes and hospitals.
- Study reports on states with highest and lowest excise taxes on wine. On August 26, an article in The Center Square, a new publication that covers state governments, reported on a study from the Tax Foundation which found that the states imposing the highest excise taxes on wine are Kentucky, Alaska and Florida. In contrast, Mississippi, Pennsylvania, Wyoming and Utah do not impose any excise taxes on wine at all. These four states, The Center Square noted, are among the five in the nation that have set up government-run monopolies on certain alcoholic beverages, including wine. The Tax Foundation is a nonprofit that is generally critical of high taxation and conducts studies of taxation at both the federal and the state levels.
- Florida legislature may consider reforms of the state’s alcohol laws. The Daytona Beach News-Journal reported on August 26 that a Florida legislator has introduced a bill to abolish several quirky and burdensome provisions of the state’s alcohol laws. Among the provisions targeted were a law that permits restaurant patrons to take home an unfinished bottle of wine only if it had accompanied a full meal, a provision that limits craft distilleries to the production of only 75,000 gallons per year, and a statute that prohibits the sale of wine in bottles that are larger than one gallon but smaller than 5.12 gallons. The newspaper editorialized that if these changes were adopted, Florida would have “some of the most entrepreneur-friendly liquor laws in the nation — with little perceivable threat to health or public safety.”
- Appeals court holds that Walmart may not sell liquor in Texas. On August 15, the US Court of Appeals for the Fifth Circuit reversed a lower-court ruling and upheld a Texas law that prohibits publicly held corporations from obtaining liquor store permits. Texas is the only state that imposes such a prohibition. Walmart, which wants to sell liquor in Texas and is publicly held, had challenged the law, calling it unconstitutional because it allegedly discriminates against out-of-state companies. The appeals court rejected this contention, saying the law treats in-state and out-of-state companies the same. Lance Lively, executive director of the Texas Package Stores Association, said the industry group will continue to fight for “the preservation of thoughtful regulation to keep Texans safe, keep sensible restrictions on the retail sale of liquor, and support family-owned liquor store owners against the world's largest corporate entities that seek to inflate their profits by upending sensible state laws that protect consumers.”
- Alaska alcohol board seeks to limit social activities sponsored by breweries and distilleries. On August 26, the Alaska Alcohol and Marijuana Control Board proposed a new regulation that would prohibit breweries and distilleries from hosting social gatherings that are advertised to the public. Brewers and distillers expressed concern about what the proposal could mean for their businesses. The board's attempt to crack down on such activities is nothing new. In 2018, the board ruled that while bars in Alaska can legally serve cocktails, distilleries cannot. The state legislature, however, soon passed legislation to allow distilleries to serve mixed drinks.
- Hep A in the news.On August 20, the CDC issued a report looking at the three-year outbreak of Hepatitis A that has swept across the United States. Since 2016, the CDC says, 29 states have reported 24,280 cases of the implicated strain of Hep A, and 60 percent of those required hospitalization. Only two states have declared an end to the outbreak inside their borders – California and Utah. Most at risk are drug users, those experiencing homelessness, men who have sex with men, people who are or recently were incarcerated, and people with chronic liver disease; many observers are noting that patrons of restaurants that happen to employ an infected food service worker may be affected as well – for instance, in Florida, workers at all types of restaurants have been found to be infected, and health officials estimate that around 5 percent of all reported cases in that state have been among food service workers. The nation’s reported death toll in the outbreak is 236, but CDC suggests that the actual death toll may be higher, due to variations in the ways states surveil death certificates.
- Did the Administration select topics for the Dietary Guidelines based on what industry would think? The Washington Post wrote on August 30 that the USDA and HHS have decided to restrict the issues to be considered by the federal panel charged with writing the 2020 Dietary Guidelines in response to 80 specific questions. The influential federal guidelines are revised every five years. The article quoted some leading health experts as saying that among the issues to be excluded are key questions concerning Americans’ consumption of red and processed meat, the proliferation of ultraprocessed foods, and the appropriate sodium levels for different population groups. These critics said the new approach came about because the current Administration wants to omit issues that large food companies would find objectionable. However, an Administration spokesperson denied this contention and said the topics were selected in order to avoid duplication of federal efforts and to focus on issues of the highest importance to public health and federal nutrition programs.
- CSPI asks USDA for revision of required nitrite labeling. On August 28, the nonprofit Center for Science in the Public Interest submitted a petition to the USDA asking the department to stop requiring the terms “Uncured” and “No Nitrate or Nitrite Added” on labels for meat processed with nitrates or nitrites from non-synthetic sources, such as celery powder. The current labels, the group said, may mislead consumers giving them the false impression that these meat products are more healthful than products with nitrites from synthetic sources. In fact, the group said, meat products made with nitrites from non-synthetic sources are just as unsafe as those with nitrites from synthetic sources.
- No more plastic water bottles at SFO. Rules banning the sale of plastic water bottles at San Francisco International Airport (SFO) are now in effect. In 2018, nearly four million plastic water bottles were sold or given out at the airport, and most were not recycled. The ban complies with a 2014 San Francisco ordinance banning the sale of plastic water bottles on city-owned property and is part of SFO’s 2019 Zero Waste Concessions Program, which the airport describes as “a forward thinking and aggressive plan to reduce single-use disposable plastics by transitioning to reusable, compostable, and recyclable alternatives at SFO restaurants, cafes, newsstands, airline lounges, and vending machines.” Those passing through the airport are encouraged to bring their own bottles, which may be refilled at 100 hydration stations. Going forward, the Zero Waste Concessions Program will place additional requirements on vendors. For instance, food will need to be sold in compostable food service ware – many vendors have already transitioned to the foodware requirements. Bottled water will still be available at the airport – once existing stock of plastic bottles is depleted, then shops, vending machines, restaurants and lounges will be allowed to offer water in containers made of recyclable packaging, such as aluminum or glass.