This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.

• White House says order on USDA labeling rules is coming soon. White House press secretary Jen Psaki said July 20 that President Joe Biden will soon sign an executive order that directs the USDA to clarify that meat is eligible to receive a “Product of USA” label only if the animals are raised in the United States and not abroad. Under the current rules, most grass-fed beef labeled “Product of USA” is actually raised and slaughtered abroad, then imported to the US for processing. Psaki said that the President and the USDA “believe that it is unfair for domestic farmers and ranchers to have to compete with foreign companies that are misleading consumers.” USDA Secretary Tom Vilsack said recently that his agency would initiate a “top-to-bottom” review of the “Product of USA” label that will help determine what the label means to consumers.
• FDA sends warning letter on food packaging substances. The FDA, on August 5, sent a letter to manufacturers, distributors and users of fluorinated polyethylene substances that contact food, reminding them that these packaging items must be made under specific conditions to comply with existing regulations. When a packaging item has been improperly manufactured, it is “not lawful,” and under those circumstances, the food that contacted it should not be permitted for sale, the FDA said. The agency also gave three examples of manufacturing processes, used occasionally to create packaging for the food industry, that do not comply with the regulation and would lead to food being disallowed for sale. For example, the agency said it is unlawful to make the fluorinated polyethylene substances by using fluorine gas in combination with other inert substances such as carbon dioxide, helium or argon.
• CSPI official calls for end to the “GRAS loophole.” In a July 28 post on the blog of the Center for Science in the Public Interest, the nonprofit’s regulatory counsel called on the FDA to end the “regulatory loophole” that permits food companies to designate ingredients in their products to be “Generally Recognized as Safe” or GRAS. The counsel, Jensen Jose, wrote, “Experts estimate that there are about 1,000 GRAS substances where safety determinations were made by food companies without notifying the FDA. Essentially, we must trust that food companies will conduct unbiased safety determinations before adding these new GRAS substances to our food. We believe that this role should not be in the hands of the companies that already have a financial investment and interest in using these chemicals.” Jose urged support for the Toxic Free Food Act now pending in Congress, which he said would close the “GRAS loophole.”
• Study proposes generic names for cell-based fish products. An August 1 article in the Journal of Food Science suggests that food companies, government officials, marketers, journalists and others should use the terms “cell-based” or “cell-cultured” in writing about seafood products made from the cells of fish or shellfish. These products are not on the market yet, but major investments have been made in bringing them to market. The FDA and USDA require all food products to have a “common or usual name” on their labels so that consumers can make informed choices. Cell-based fish products are so new that they do not yet have such a common or usual name. William Hallman, a professor at Rutgers University, conducted a study, reported in the journal article, that indicated consumers would accept those two generic names and that they are the types of names that would pass government muster.
• FDA will convene virtual summit on food safety and e-commerce. The FDA announced on July 29 that it plans to host a three-day virtual event on October 19-21, 2021 to discuss and exchange perspectives with industry stakeholders and interested parties about the safety of human and animal foods ordered online and delivered directly to consumers through e-commerce. E-commerce issues in food safety are part of what the agency has called the “New Era of Smarter Food Safety.” When it announced the initiative in 2020, the FDA said the “New Era” will be built on a partnership between government, industry and public health advocates based on a commitment to create a more modern approach to food safety. Although the initiative is not limited to challenges caused by COVID-19, the agency has pointed out that the pandemic was one factor that has accelerated the need for new types of FDA actions.
• New bill introduced to ramp up FDA’s examination of food chemicals. On July 26, US Representative Jan Schakowsky (D-Illinois) announced she had introduced a bill, the Food Chemical Reassessment Act of 2021, which would create a new Office of Food Safety Reassessment in the FDA’s Center for Food Safety and Applied Nutrition. The office would be tasked with studying at least 10 chemicals every three years with the purpose of reevaluating their safety for use in food. In addition, the new legislation would reestablish the Food Advisory Committee, a panel of experts to advise the FDA on emerging food and cosmetic safety, food science, nutrition, and other food-related health issues. The Food Advisory Committee was terminated by the FDA on December 12, 2017, as a cost-saving measure.
• New bill would revamp federal food labeling requirements. On August 3, two US senators and two US representatives introduced the Food Labeling Modernization Act of 2021. The bill outlines what would be a comprehensive overhaul US food labeling rules to align existing laws and regulations with the changing marketplace and the latest findings of nutrition science. One of the chief requirements of the bill is a standard front-of-pack labeling system for all packaged foods regulated by the FDA. The proposed bill would also establish clear FDA guidelines about what can legally be marketed as “healthy.” “This bill will bring much-needed clarity to food labels so Americans can make informed, healthy decisions for themselves and their families,” said Senator Richard Blumenthal (D-CT), one of the bill’s sponsors.
• “Product of the USA.” On August 5, US Senator Mike Rounds (R-SD), along with seven co-sponsors, introduced a bill in the Senate that would limit the permitted use of the label “Product of the USA” for beef only to products of animals that are born, raised and slaughtered in the United States. Current USDA rules allow foreign beef raised in other countries to receive this label if the beef is processed in the United States. “It’s pretty simple – only beef born, raised and slaughtered in the United States should receive the ‘Product of USA’ label,” said Rounds. “As I continue to work with my colleagues on re-establishing mandatory country of origin labeling, we must fix the current labels to protect consumers and producers.”
• Recalls of leafy greens. On July 28, BrightFarms, an indoor farming company, announced a voluntary recall of packaged spinach grown at its hydroponic greenhouse farm in Rochelle, Illinois, due to possible Salmonella contamination. This is an expansion of its July 15 recall of a broad array of salad greens from the same facility. The company said it issued the recalls “out of an abundance of caution” after being notified that 11 consumers had become ill in June. The FDA said that it, along with the CDC and state and local authorities, are investigating the outbreak and that FDA is working with BrightFarms to determine if other products are affected. The implicated BrightFarms products, sold in Illinois, Wisconsin, Indiana and Iowa, are packed in clear plastic clamshells.

  And on July 27, Old Souls Farms of St. Paris, Ohio recalled a number of its greenhouse leafy green products over concerns of Listeria contamination. The implicated products – a range of greens including romaine, basil, bib, and arugula – are packed in clamshells and in plastic bags. Old Souls Farms said it decided to recall the products following a routine facility test of rainwater holding tanks in the greenhouse facility as well as testing from one customer who “received contaminated basil product.” Old Souls is calling that result “an isolated event.”

• No vax, no service. City Winery, a national chain of live music venues, is requiring patrons at all of its venues to prove they have been vaccinated against COVID-19, or, alternatively, to show proof of a negative COVID test. Michael Dorf, City Winery’s CEO, said he recently polled customers via email and that more than 75 percent support the vaccine requirement. Meanwhile, in Atlanta, Argosy Restaurant and Bar became one of the first businesses in Georgia to require its customers to be fully vaccinated. The owner of Argosy and its entire staff are vaccinated; his decision to require proof of vaccination came after he and several of his workers fell ill with breakthrough cases – the restaurant had to close during a busy weekend, resulting in losses off tens of thousands of dollars. And in Oakland, California, two restaurants – small plates-focused Kon-Tiki and steakhouse Palmetto – announced on July 22 that they will soon require all patrons to be vaccinated or to have a negative COVID test. Matt Reagan, co-owner of the restaurants, said he fears he will lose business over the ban, but, he says, “I have to keep my staff healthy and employed” and “I want my patrons to know they can come in and be safe.” Also in Oakland, the dive bar Eli’s Mile-High Club, which was one of the first establishments in the country to institute a no vax, no service rule, has seen its business improve. The San Francisco Bar Owner Alliance is considering recommending that its 500 members require patrons to be vaccinated. Meanwhile, earlier this year the states of Florida and Texas enacted laws that bar private businesses from imposing a vaccine requirement on customers.
• Relief grant funding used to raise restaurant wages. A restaurant owner in Lancaster, Pennsylvania is using his grant from the state’s COVID-19 relief fund to raise his employees’ wages. Sam Guo, owner of Silantra Asian Street Kitchen, said he is now paying his workers $15 an hour plus tips. “That’s something in the food industry that’s not known typically,” he said. This year, Pennsylvania offered grants worth between $5,000 and $50,000 to businesses that had not already received state or federal loans; were subject to closure mandates through disaster declarations; and demonstrated at least 50 percent revenue reduction in the affected time period. On July 26, Pennsylvania Governor Tom Wolf said he had scoured the state’s finances to extend a lifeline to restaurants and bars struggling to survive the pandemic. Tipped workers in Pennsylvania receive a minimum of $2.83 an hour plus tips.
• Appeals court rejects challenge to California’s Proposition 12. On July 29, the US Court of Appeals for the Ninth Circuit upheld a lower court’s ruling turning aside a challenge to California’s Proposition 12, which sets new humane requirements concerning the confinement of farm animals. The court rejected a lawsuit filed by the National Pork Producers Council and the American Farm Bureau Federation that had asked the court to declare the proposition, which was approved by California voters in 2018, to be invalid. In its ruling, the appeals court held that the proposition’s new minimum requirements for animal confinement did not constitute an undue burden on interstate commerce. Under the law, by 2022 all laying hens must be transitioned to cage-free housing, and breeding pigs must have at least 24 square feet of floor space. California will ban the sale of products that fail to meet these standards. Many egg and veal producers have already begun complying with the law, but only 4 percent of hog producers have done so.
• Judge dismisses lawsuit over labeling of potato chips. On July 26, a US district court rejected a lawsuit against Wise Foods by a consumer who alleged that the company’s Cheddar & Sour Cream Flavored potato chips were labeled in a deceptive manner. The plaintiff’s major allegation was that the chips contained artificial diacetyl, a chemical that mimics or bolsters the characteristic flavor of sour cream, and that Wise had violated New York state law because it did not label the chips as “artificially flavored.” The court concluded, however, that “Wise’s packaging would not mislead a reasonable consumer.” The ruling pointed out that “by all indications, the chips do taste like cheddar and sour cream” and that “nothing in the label states or implies that the chips’ flavor is derived entirely from cheddar and sour cream.”

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