Industry Insights: Proposition 65 Labeling Responsibilities Finalized for Intermediary Parties and Retail Sellers

California’s Office of Environmental Health Hazard Assessment (OEHHA) issued finalized amendments on January 14, 2020, to its regulations that will become effective on April 1, 2020. Per OEHHA in its Final Statement of Reasons, the amendments “clarify how intermediate parties in the chain of distribution can satisfy their obligation to provide a warning” under Proposition 65. OEHHA also revised the level of knowledge required to trigger warning obligations for retail sellers.

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Notable Ruling: Reasonable Consumers Not Misled by “Diet” Soft Drinks

The Ninth Circuit delivered a win for food and beverage companies just in time for the new year in a published opinion in Becerra v. Dr Pepper/Seven Up, Inc., — F.3d —, 2019 WL 7287554 (9th Cir. Dec. 30, 2019).

Plaintiff in Becerra alleged that use of the word “diet” to describe Diet Dr Pepper is misleading because it suggests the product will help consumers lose weight. She relied on several scientific studies to allege that aspartame, the artificial sweetener in many diet sodas, “is likely to cause weight gain,” and “poses no benefit for weight loss.” She also relied on the results of a survey that, according to Plaintiff, showed the majority of soft-drink consumers believe “diet” soft drinks will help them lose or maintain their weight. After several rounds of motion to dismiss briefing, the district court dismissed plaintiff’s complaint with prejudice, and plaintiff appealed.

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Industry Insights: Multiple CBD Class Actions Filed With More Expected

On the heels of the U.S. Food and Drug Administration’s (FDA) recent declarations regarding the safety of products containing cannabidiol (CBD), several companies have been hit with class action lawsuits alleging that that the company’s CBD-containing products are mislabeled and falsely advertised in violation of state law. Further class action litigation is expected given the language of the FDA’s recent pronouncements and the widespread availability of CBD-containing products. Companies should prepare for the possibility of litigation and actively seek to mitigate the risks of unwanted attention by FDA or putative class action plaintiffs.  

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California Chamber of Commerce Challenges Proposition 65 Acrylamide Warning for Foods

On October 7, 2019, the California Chamber of Commerce (“CalChamber”) filed a lawsuit against California Attorney General Xavier Becerra in the U.S. District Court for the Eastern District of California. The lawsuit seeks to enjoin the Attorney General and private bounty hunter plaintiffs from enforcing Proposition 65 regulations relating to acrylamide in food.

Acrylamide is a chemical that forms in nearly all starchy plant-based foods that have undergone high-temperature cooking, including French fries, coffee, cereals, crackers, breads, tortilla chips, dried fruits and many other foods. Acrylamide has been present in food as long as humans have been cooking. The chemical forms from sugars and an amino acid that are naturally present in food—it is not intentionally added to foods, nor does it come from food packaging or the environment. Continue Reading

Industry Insights: SAFE Banking Act Passes House, Aims to Increase Access of Cannabis-Related Businesses to Banking Services

Late last month, the U.S. House of Representatives passed H.R. 595, the Secure and Fair Enforcement Banking Act of 2019 (the “SAFE Banking Act”). The stated purpose of the SAFE Banking Act is to “increase public safety by ensuring access to financial services to cannabis-related legitimate businesses and service providers and reducing the amount of cash at such businesses.”

In particular, the bill would provide safe harbor and other protections under federal law to financial institutions and insurers that provide services to cannabis-related legitimate businesses. Under the proposed bill, such insurers and financial service providers would not be subject to liability under federal law solely for providing such services to, or investing the income derived from, cannabis-related legitimate businesses.

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Notable Ruling: D.C. Superior Court Issues Ruling on Standing Under DCCPPA

In an Order issued earlier this week, the D.C. Superior Court entered an important ruling on the District’s Consumer Protection Procedures Act (DCCPPA). While the ruling ultimately found that the plaintiffs in the suit had standing, it substantially trimmed the theories upon which that standing was grounded.

In Praxis Project et al. v. The Coca-Cola Company, two individuals and a non-profit organization lodged suit against the beverage manufacturer alleging that the manufacturer had made false, deceptive, and misleading representations about its sugar-sweetened beverages in violation of the DCCPPA. Among other things, the Plaintiffs alleged they had standing to lodge the suit based on the DCCPPA’s unique standing provisions.

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PC Food Litigation Index: August 2019

As of August 2019, overall food litigation filings are on pace with those of last year. California and New York remain the two most popular jurisdictions for food litigation matters.  While California filings in 2019 are approximately the same as this time last year, we note that about 40% of total California filings occurred between September and December 2018.  So far this year, we have also noticed an uptick in filings in the District of Columbia.  While filings in the District were a small part of the overall total in 2018, food-related filings in this jurisdiction are currently exceeding those of larger jurisdictions, including Florida, Illinois, and Missouri.

Regarding types of matters, false labeling cases have far outstripped those of other categories.  Compared with August 2018, food-related false advertising claims have increased nearly 60%.  Filings for “all natural” and slack-fill claims have fallen compared to August 2018, with fewer than 20 new cases filed in 2019 from both categories combined.  Even so, we are tracking a number of important trends regarding “all natural” claims, including several cases alleging that the presence of malic acid or other materials render product labeling regarding “naturally flavored” false or misleading.  Continue Reading

Industry Insight: Mississippi Reverses Course on Plant-Based Meat Alternative Labeling

As we reported in July 2019, many states have enacted laws related to the labeling of meat alternative products and limiting their use of meat-like descriptors like burgers or hot dogs. One such law recently took effect in Mississippi.

Mississippi’s law, S.B. 2922, provided that a plant-based, insect-based, or cell-cultured food product “shall not be labeled as meat or a meat food product” and even imposed potential criminal sanctions for doing so. Just a few weeks after it went into effect, the state has promulgated draft regulations that appear to create a substantial carve-out for plant-based foods. The draft regulations are notable for what is included and omitted from this significant carve out. Continue Reading

Industry Insights: Putting “Pure” Claims in Context

In recent years, we have tracked numerous cases that claimed food products marketed as “pure” did not have the marketed levels of purity. From water to cheese to honey products, “pure” claims have led to challenges in federal and state courts around the country.

Many suits alleged that trace amounts of synthetic chemicals or pesticides render products impure or otherwise not 100% “natural.” Recently, a consumers’ association sued a tea manufacturer, alleging that the tea showed trace amounts of synthetic molecules, including glyphosate, even though it was marketed as “100% Natural” and “Pure.” Honey manufacturers have faced several similar suits, which alleged that honey containing trace amounts of pesticides, particularly glyphosate, is not “100% Pure.” Continue Reading

Industry Insights: FDA Sends First Warning Letter Under Recent Rule Regarding Imported Food

The Food Safety Modernization Act (“FSMA”) ushered in a sea change in the government’s regulation of food safety. Pursuant to FSMA, the FDA has promulgated a series of rules, including a 2015 rule related to the Foreign Supplier Verification Programs (the “FSVP Rule”). These programs set forth certain requirements to ensure food safety and appropriate labeling for food imported into the United States. The FSVP Rule requires that importers verify that the food they import into the United States has been produced in a manner that meets applicable U.S. food safety standards.

Just this week, the FDA announced the issuance of its first warning letter under the FSVP Rule. The warning letter was sent to an importer of tahini, which was implicated in a Salmonella outbreak earlier this year. The tahini was recalled after four illnesses were reported. Per a statement attributed to Acting Commissioner Ned Sharpless, “The warning letter follows an FDA inspection conducted in response to a recent Salmonella outbreak, which revealed that the importer was not in compliance with the FSVP.” Continue Reading

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