This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.
- USDA issues new rules for egg inspection.On September 9, the USDA announced it is putting into place new rules for the inspection of eggs. This marks the first change in federal egg-inspection rules since the program was established in 1970. The eggs at issue are not those that are sold to supermarkets and purchased as such by consumers, but so-called “breaker” eggs that are eventually used in a variety of egg-related products or sold in liquid form. Under the new rules, the department will no longer require a full-time inspector at plants that make egg products. Instead, an inspector will visit each facility at least once per shift. The new rules also transfer the inspection of egg substitutes and freeze-dried eggs from the FDA to the USDA. The USDA said that it intends to create “a performance standard requiring that official plants process egg products to be edible without additional preparation to achieve food safety.”
- FDA weighs in on gluten-free claims for distilled products. A rule issued by the FDA that took effect September 14 now permits companies that make distilled spirits and foods from gluten-containing grains to still refer to their products as gluten-free. The FDA pointed out that the process of distillation removes all gluten, since gluten does not vaporize, and thus that a manufacturer can make a “gluten-free” claim for a distilled product. This would be a very important statement for people with celiac disease and others on gluten-free diets. The ruling changes a previous FDA policy that said distilled products labeled “gluten-free” must contain no gluten ingredients at any point in the distillation process from start to finish. The ruling was issued August 19.
- Federal agency approves new grape variety names for US-made wines. On September 4, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) approved five new wine appellations that can now be used by US winemakers to identify the wines they produce. The new names are Camminare Noir, Paseante Noir, Errante Noir, Ambulo Blanc and Caminante Blanc. Under TTB rules, it is not mandatory for a winemaker to use a grape variety name of this sort, but if a varietal name is to be used, it must have been approved by the agency. Furthermore, if a winemaker chooses to use a grape variety name, at least 75 percent of the wine must be made of the named grape variety.
- For legal reasons, many Florida bars are becoming restaurants. All over Florida, bar owners have begun to sell food in addition to alcoholic drinks, in an effort to circumvent the state’s rules concerning mandatory closings of bars because of the coronavirus disease 2019 (COVID-19) pandemic. Some bars in the state are putting in full kitchens, while others have simply bought a Crock Pot. State officials have informally endorsed this stratagem as consistent with Florida law, and at a September 3 meeting with brewery owners in St. Petersburg, Governor Ron DeSantis assured the audience that he wants to reopen the state’s bars and breweries soon and allow them to resume serving alcohol, as long as the state’s coronavirus numbers continue to decline. “We really want to get to ’yes’ on this,” DeSantis said.
- Salmonella onion outbreak not over yet. The patient count in the international outbreak of Salmonella linked to onions from Bakersfield, California-based Thomson International continues to climb. At this writing, nearly 1,500 people have fallen ill with the implicated strain of the bacterium in the US and Canada. Investigators point to red onions from Thomson’s as the source of the infection. On August 1, Thomson issued a voluntary recall of all its onions – red, white and yellow – which were being sold bagged and loose in major groceries across the US and in several Canadian provinces. Since then, recalls have expanded to encompass many ready-to-eat dishes made with onions, such as salsas and salads, sold to consumers via stores, restaurants, food delivery services and institutions. See our earlier coverage of this outbreak.
- Kellogg’s hit with class action over the content of its Strawberry Pop-Tarts. On September 5, a consumer filed a proposed class action against Kellogg’s in the US District Court for the Southern District of New York, alleging that the company’s Frosted Strawberry Pop-Tarts are not flavored solely with strawberries. The lawsuit says that the company gives the misleading impression that strawberries are the tarts’ only fruit filling, while in fact they are made with dried strawberry, dried pear and dried apple and flavored in part with red dye #40. According to the complaint, consumers were deceived into paying more for the products than they would have paid had they known the truth. The complaint says that the tarts were priced at $7.19 for a box of 16 tarts, significantly higher than comparable products that were marketed in a way that was not misleading.
- First consent decree under FSMA. On September 15, the District Court for the Northern District of Illinois issued a consent decree of permanent injunction against Fortune Food Products, Inc., a Chicago-based processor of soy products and sprouts, for violating public safety standards. The FDA press release on the consent decree states, “The action marks the first consent decree of permanent injunction against a firm or grower for violating public safety standards under the Produce Safety Rule enacted under the Food Safety Modernization Act of 2011.” Under the decree, Fortune Foods agrees to stop growing, harvesting, packing, or holding sprouts and soy products at or from their facility, or any other facility, until certain requirements are met. The Department of Justice noted that repeated FDA inspections of Fortune Food facilities found the company failed to comply with Produce Safety and Current Good Manufacturing Practice regulations; in 2018, the FDA sent the company a warning letter outlining remedial steps. FDA Chief Counsel Stacy Amin commented, “This action demonstrates the agency’s commitment to pursuing and taking swift action against those who repeatedly disregard these food safety standards and distribute adulterated foods.”
- Carrot cake without carrots? On August 9, Hostess Brands LLC was sued in a proposed class action in the US District Court for the Southern District of New York over the ingredients and labeling of its carrot cake flavored Donettes. According to the complaint, the mini-donuts do not “contain any carrots in a form expected by consumers where the label identifies it as ‘Carrot Cake.’ Instead, the carrot taste of the Product is provided by ‘Natural and Artificial Flavor,’ indicated in the small print on the ingredient list.” The complaint says that consumers do not expect to have the carrot flavor in carrot cake provided by artificial flavorings. It alleges that had consumers known the truth, they would have bought fewer of the mini-donuts or paid lower prices for them.
- Smoked almonds without smoking? On August 25, a group of consumers filed a class action complaint in the US District Court for the Southern District of New York against Family Dollar Stores, Inc., which makes and sells the Eatz brand of smoked almonds. The complaint says that although the product is advertised and labeled as “smoked almonds,” that claim is misleading because the almonds do not actually undergo a smoking process but have smoke flavor added to them as a flavoring. The complaint notes that unlike a competing product, Eatz packages contain no front label disclosure of the flavoring, “causing reasonable consumers to purchase them instead of similar products, at premium prices.” The complaint notes that “had the plaintiff and other class members known the truth, they would not have bought the Product or would have paid less for it.”
- Court refuses to dismiss effort to remove coffee chemical from Prop 65 list. On August 27, a federal court in California declined to dismiss a lawsuit filed by the California Chamber of Commerce challenging the state’s decision to place acrylamide, a substance found in coffee, on its list of chemicals regulated under Proposition 65. That state law requires the use of warning labels on or near products that may cause cancer. Acrylamide, which has some cancer-causing properties, is formed in a natural process when coffee is brewed. The US District Court for the Eastern District of Columbia rejected a motion filed by state Attorney General Xavier Becerra to dismiss the chamber’s case. A public interest group had filed an earlier case against acrylamide in California state court and obtained a ruling that the substance should be placed on the list. The state’s Office of Environmental Health Hazard Assessment then issued a ruling against that state court decision, and the state attorney general took up the anti-acrylamide cause. Judge Mueller, in declining to dismiss the chamber’s case, said there was a credible threat of enforcement of the labeling rule from the attorney general’s office.
- Lawsuit against Tyson Foods concerning beef labeling is dismissed. On August 27, a lawsuit against Tyson Foods Inc. and three other meat producers concerning the origin of their beef was dismissed by the US District Court for the District of New Mexico. The lawsuit had alleged that the companies engaged in deceptive practices when they labeled beef from foreign-raised cattle as a “Product of USA,” but the judge ruled that state law consumer-protection claims were preempted by federal meat-inspection laws. A class of consumers had alleged that they had overpaid for beef products made from cows that were imported from foreign countries and then slaughtered and processed in the United States.
- Wise Foods sued over labeling of potato chips. Wise Foods, Inc., became the target August 24 of a proposed class action concerning its labeling of its Cheddar & Sour Cream Flavored Ridgies potato chips. The lawsuit claims that Wise Foods misled consumers by failing to disclose on the front of the package that its cheddar flavor is derived partly from artificial ingredients. The lawsuit asserts that Wise Foods wanted to give the impression that the chips’ flavor is entirely from natural sources in order to charge a premium price over its competitors, which use the terms “Artificially Flavored” or “Naturally and Artificially Flavored” on their packages. The lawsuit says the packaging was intended to “deceive, mislead, and defraud” consumers. The case was filed in the US District Court for the Southern District of New York.
- What’s in a rita? A margarita is a tequila drink; what about a Lime-A-Rita? On September 11, Anheuser-Busch, which makes and sells various “rita” drinks based on the “margarita” concept, became the target of a class action filed in the US District Court for the Southern District of New York. The lawsuit is based on the fact that these “rita” drinks, while they are alcoholic drinks and have the word “margarita” on their labels, don’t contain any tequila. Instead, they are flavored beers, and their packaging states in small print that they are “malt beverages.” The complaint says it is “common knowledge, and indeed definitional, that a margarita contains tequila” and that when consumers order a margarita in a bar, they expect to receive a cocktail that contains tequila. Thus, the complaint says, when consumers buy a product that has the word “margarita” on the package, they expect it to contain tequila. The image of a salted margarita glass on the Rita product’s packaging reinforces that expectation for consumers, the complaint adds.
This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.
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