Posts By Shook, Hardy & Bacon L.L.P.

By Shook Associate Matt Williams California often serves as an incubator for litigation that thereafter sweeps across the country. This phenomenon may hold true for newly minted COVID-19-based price-gouging lawsuits. Indeed, California has quickly become the epicenter of price-gouging enforcement and class action litigation. Food producers, distributors, retailers and online marketplaces such as Amazon have become the targets of price-gouging actions. Importantly, there is currently no federal price-gouging law, meaning that companies must navigate 50 different state laws. California’s price-gouging statute provides that “consumer food items or goods” cannot be sold for 10% more than the price advertised immediately before a declared state of emergency. The statute provides an exception for price increases if the seller can prove it was “directly attributable” to costs imposed by up-chain suppliers or increases in labor and material costs during the emergency. Violations are prosecuted by the California Attorney General and local district attorneys,…

The European Commission has announced the adoption of strategies to support biodiversity and “transition to a sustainable EU food system that safeguards food security and ensures access to healthy diets sourced from a healthy planet.” “The coronavirus crisis has underlined the importance of a robust and resilient food system that functions in all circumstances, and is capable of ensuring access to a sufficient supply of affordable food for citizens,” a question-and-answer resource on the program stated. “It has also made us acutely aware of the interrelations between our health, ecosystems, supply chains, consumption patterns and planetary boundaries.” The program’s goals include reduction of chemical pesticides, preservation of soil nutrients, reduction in sales of antimicrobials for farmed animals and aquaculture, and an increase in organic farming by 2030. The program will also include the proposal of mandatory front-of-packaging nutrition labeling and efforts to reduce food waste.

U.S. Rep. Earl Blumenauer (D-Ore.) has introduced The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020 (RESTAURANTS Act). The proposed bill would create a $120 billion “restaurant stabilization grant program designed to help independent restaurants deal with the long-term structural challenges facing the industry due to COVID-19 and ensure they can reemploy 11 million workers,” according to Blumenauer’s May 20, 2020, press release. The program, which would be administered by the Department of the Treasury, would provide grants sufficient "to cover the difference between revenues from 2019 and projected revenues through 2020, with a maximum grant of $10 million.”

The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has released a final rule updating regulations on genetically modified organisms (GMOs). The rule adjusts the regulatory process for specific GMOs created to combat plant pests that pose no increased plant pest risk than conventionally bred plants.

The U.S. Department of Agriculture (USDA) has issued a rule implementing the Coronavirus Food Assistance Program (CFAP), which was allocated $9.5 billion in the Coronavirus Aid, Relief, and Economic Stability Act. CFAP provides financial support for agricultural producers affected by COVID-19 to help offset sales losses. The Farm Service Agency and Agricultural Marketing Service will implement the program, which is generally available to producers that “suffered a 5-percent-or-greater price loss over a specified time resulting from the COVID-19 outbreak” or “face additional significant marketing costs for inventories.”

The U.S. Food and Drug Administration (FDA) has published the results of its investigation into an outbreak of E. coli in November and December 2019 caused by romaine lettuce and other leafy greens from the Salinas Valley area of California. FDA found that nearby land used for cattle grazing was the most likely contributing factor associated with three outbreaks that stemmed from three distinctly different strains of E. coli.

A group of consumers has filed a putative class action asserting that Nestle USA Inc. and Ferrara Candy Co.’s opaque candy boxes contain too much slack fill. Iglesia v. Nestle USA Inc., No. 20-5971 (D.N.J., filed May 15, 2020). The complaint alleges that Ferrara and Nestle “pioneered a scheme to deceptively sell candy in oversized, opaque boxes that do not reasonably inform consumers that they are half empty. Defendants’ ‘slack-fill’ scam dupes unsuspecting consumers across America to pay for empty space at premium prices.” The complaint also features several photos of boxes with portions cut away, purportedly showing the amount of empty space in an unopened package. For alleged violations of New York, New Jersey, Michigan, Illinois, North Carolina, Texas and Florida consumer-protection statutes, the plaintiffs seek an injunction, restitution, damages and attorney’s fees.

The U.S. Food and Drug Administration (FDA) has published a food-safety checklist for retail food establishments that have been closed or operating in a limited capacity during shelter-in-place orders. The list covers issues that may arise if a facility has been closed, such as ensuring water and sewage lines or coolers and freezers are working, and approaches to slowing the spread of COVID-19, such as social distancing measures and increased outdoor air circulation. Checklist sections include facility operations; water, plumbing and ice; cleaning, disinfecting and sanitizing for food contact and non-food contact surfaces; food temperature control; product inspection and rotation; warewashing equipment; handwashing stations; employee health; and social distancing.

Following an executive order directing the U.S. Department of Agriculture to ensure the continued supply of meat and poultry, twenty state attorneys general have submitted a letter urging President Trump to strengthen guidance for meatpacking facilities by requiring increased access to testing and personal protective equipment, implementation of physical distancing where possible, suspension of line speed waivers, and paid leave for workers in isolation or quarantine following exposure to COVID-19. “The industry’s failure to act earlier to protect its labor force, and the Administration’s lack of leadership and support for testing, procurement of personal protective equipment (PPE), and enforcement of federal worker safety standards, will be among the many regrettable lapses contributing to the tragic story of America’s experience with this pandemic,” the letter asserts. The letter calls for voluntary guidance provided to meatpacking facilities to become mandatory. “Even if these recommendations were sufficient to maintain worker safety, however, they…

The Texas Department of State Health Services has published a proposed rule that would regulate “the manufacture, distribution, and retail sale of consumable hemp and consumable hemp products in the State of Texas.” The rule details licensure for consumable hemp manufacturers or distributors; required testing to determine the presence or concentration of cannabinoids, THC, pathogens, pesticides and heavy metals; packaging and labeling requirements; and enforcement measures. The earliest possible date of adoption for the rule is June 7, 2020.