Food Labeling Enforcement and Compliance Priorities in the Current Environment
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1 Food Labeling Enforcement and Compliance Priorities in the Current Environment Veronica Colas, Senior Associate April 12, 2018
2 Role of FDA Regulations and Guidance in Class Action Litigation
3 Why Class Action Lawsuits FFDCA does not have a private right of action FDA is not always actively enforcing Many states have strong consumer protection laws Allow individuals to sue to enforce Individual consumer represents a class of like consumers that could make a similar claim 3
4 Federal Preemption When there is no applicable FDA regulation defining a labeling claim, courts have held that lawsuits challenging such claims under state consumer protection laws are not preempted For example, courts consistently hold that challenges of natural claims are not expressly preempted by FDA s informal policy on natural Courts have also allowed cases to go forward that allege violation of an FDA labeling regulation is deceptive or misleading under state consumer protection laws Hogan Lovells 4
5 Primary Jurisdiction Primary jurisdiction is a discretionary doctrine that allows a court to conclude that a claim would better be addressed first by an administrative agency Particularly applicable where the agency has specialized or technical knowledge, is in a better position to determine the issues, and/or has already undertaken to address the issue Court can dismiss or stay an action Some, but not all, courts have issued stays pending resolution of certain issues by FDA Evaporated cane juice Natural Yogurt standard of identity Whether plant-based milk should be deemed an imitation Hogan Lovells 5
6 Class Action Litigation New Trends
7 Responses to Natural Litigation Remove natural claims Reformulate to avoid use of targeted ingredients Tailor claims to specific ingredients ( made with natural ) Continue to make natural claims consistent with FDA policy 7
8 If we can t say natural, can we say no artificial ingredients nothing artificial pure real raw simple no artificial (preservatives, colors, flavors, etc.) free from no chemical additives no GMOs Hogan Lovells 8
9 No artificial claims No artificial ingredients has been challenged as an implied all natural claim No artificial flavors FDA has defined artificial flavor (21 CFR (a)(1)) Lawsuits challenging Salt & Vinegar flavored chips flavored with sodium diacetate and/or malic acid No preservatives FDA has defined chemical preservative (21 CFR (a)(5)) Lawsuits challenging this claim where a product contains citric acid as an ingredient Hogan Lovells 9
10 No artificial No artificial colors FDA takes the view that all colors, regardless of source, are not natural FDA regulations define artificial color as any color additive (21 CFR (a)(4)) Many companies make a qualified claim: No artificial colors added colors from natural sources Hogan Lovells 10
11 non-gmo or GMO free No regulatory definition of these claims New federal legislation says certified organic products may bear a non-gmo claim Free could be viewed as meaning no detectable levels Wide variety of interpretations Is cheese non-gmo if it is made from milk from a cow that consumed GE feed? Chipotle sued in multiple jurisdictions for non-gmo and GMOfree claims Company acknowledges on its website it sells soda made with GE corn syrup and uses meat and dairy derived from animals that consumed GE feed Has had mixed results in defending claims Florida district judge held claims lack merit (but did not elaborate); California district judge held consumers could be confused about what terms mean 11
12 USDA Will Be Establishing Disclosure Requirements Passed in July 2016 The bill: Preempts state and local GE labeling laws Provides a mandatory national disclosure standard for bioengineered foods, to be implemented by USDA USDA must establish the mandatory disclosure standard within 2 years of the bill s enactment Small businesses get an additional year after the implementation date for larger companies USDA must identify GE foods and the disclosure; USDA is not instructed to define NonGMO, NonGE, GE Free or other terms 12
13 non-gmo - Kao v. Abbott Laboratories Similac Advance Non-GMO Infant Formula Lab tests performed on the product show the product contains DNA from GMO soy Abbott represented that Similac Non-GMO was free of GMOs Hogan Lovells 13
14 made with No bright line rule Need a material amount, consistent with consumer expectations Depends on specific ingredient and food product Lawsuits over made with real fruit claims In assessing claim, consider: Graphics Type/form of the ingredient Other ingredients in the product Nutrient profile Hogan Lovells 14
15 Slack Fill Lawsuits brought alleging nonfunctional slack fill Slack fill only allowed if it is functional, as defined in FDA regulation (21 CFR ) Lawsuits particularly common where companies reduce the amount of food but maintain the same package size Spices Bottled iced coffee Beef jerky Packaged nuts 15
16 Real or Pure No regulatory definition Must be truthful and non-misleading Context matters what will consumers think the claim means? Standard of identity compliance? Single ingredient? No fillers? Natural 16
17 Added Sugars Cases FDA established a DRV of 50 g for added sugars (~10% of daily calories) Lawsuits claim products with high amounts of added sugar are deceptively labeled with claims that are inconsistent with dangers of excessive added sugar consumption Healthy Whole grain Fiber Wholesome Nutritious No high fructose corn syrup Target foods with more than 5% of calories from added sugars Allege violations of additional regulations (e.g., health claim and nutrient content claim regulations) 17
18 Truxel v. General Mills Alleges General Mills has a policy of marketing high-sugar cereals, bars, and other foods with health and wellness claims that are incompatible with the significant dangers of excessive added sugar consumption Claims cited as evidence of the policy include label statements such as whole grain, fiber, nourish, goodness, protein, no high fructose corn syrup, long-lasting energy, and healthy among others Alleges that consuming excessive added sugar any amount greater than 5% of daily caloric intake increases risk of heart disease, diabetes, liver disease, and other chronic morbidity Also asserts that eating sugar produces characteristics of craving and withdrawal, similar to addiction to drugs or alcohol Asserts that General Mills knows or reasonably should know of evidence that its highsugar products are unhealthy but fails to warn consumers of the known dangers Alleges General Mills designed deceptive opposition research to justify high amounts of sugar in its cereals 18
19 FDA Draft Guidance on Sodium Reductions Asks the food industry to voluntary reduce sodium content of foods by about 1/3 over 10 years Goal is to reduce population sodium intake to 2,300 mg/day Draft guidance sets short term (2-year) and long-term (10-year) sodium reduction targets (from the date a final guidance document is issued) Covers ~150 subcategories of packaged and restaurant foods Draft guidance states it is voluntary and does not create binding requirements 19
20 What does voluntary mean? Hogan Lovells 20
21 PHOs and 0 g Trans Fat In June 2015, FDA issued Declaratory Order revoking generally recognized as safe (GRAS) status of partially hydrogenated oils (PHOs) Since then, numerous cases have been filed challenging 0 g trans fat claims on products containing PHOs Typically allege that such a claim is misleading because PHOs contain trans fat and are not safe In a case over the labeling of Nestlé s Coffee-mate, the court found the allegations were preempted Complaint alleged sale of products containing trans fat is unlawful Court held the plaintiff would impose an immediate prohibition on the use of PHOs, which would conflict with FDA s Declaratory Order allowing a three-year compliance period for removal of PHOs and Congressional appropriations law stating PHOs should not be deemed unsafe prior to compliance date Similarly found challenge to 0 g trans fat claim (when product contained < 0.5 g trans fat) preempted by federal regulation Other cases have been stayed pending FDA s consideration of any food additive petitions submitted to FDA 21
22 What Can You Do about the Class Action Risk? Short term: Compliance with technical requirements matters more now than ever Audit your labels Closely evaluate claims similar to those being challenged in litigation Are you 100% compliant with technical labeling requirements? Can you substantiate all of your claims? Long term Remain engaged in new FDA initiatives 22
23 Regulatory Initiatives Worth Engagement Draft guidance on voluntary sodium reduction Potential FDA rulemakings on healthy and natural claims USDA Rulemaking on GMO Disclosures Hogan Lovells 23
24 "Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses. The word partner is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing.. Certain individuals, who are designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members. For more information about Hogan Lovells, the partners and their qualifications, see Where case studies are included, results achieved do not guarantee similar outcomes for other clients. Attorney advertising. Images of people may feature current or former lawyers and employees at Hogan Lovells or models not connected with the firm. Hogan Lovells All rights reserved
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