Citing increased demand for food and beverage products that do not contain genetically modified organisms (GMOs) as ingredients, the March 2015 issue of Consumer Reports magazine features an article intended to help consumers “sift through the facts” about the purported health and environmental effects of GMOs. The column describes recent attempts by individual states to require GMO labeling, as well as voluntary “Non-GMO Project Verified” certification programs. It claims that “the vast majority of corn, soy, canola, and sugar beets grown in the U.S. are now genetically engineered” even though the Food and Drug Administration does not follow the joint safety assessment guidelines established by the World Health Organization and Food and Agriculture Organization. “In an interesting twist, some food companies that expressed strong opposition to such mandatory labeling are the same ones turning out new non-GMO products,” opines Consumer Reports. “Those in favor of mandatory labels—including Consumers Union, the…
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Steven Neil, the former CFO of Diamond Foods Inc., has agreed to pay $125,000 to settle a U.S. Securities and Exchange Commission (SEC) lawsuit alleging that he directed his employees to underreport the amount of money paid to walnut growers to ensure that the company hit quarterly targets for earnings per share. SEC v. Diamond Foods, Inc., No. 14-122 (N.D. Cal., order entered February 2, 2015). According to SEC, Diamond falsely reported some of its payments to walnut growers as advances for crops not yet delivered to exclude the amounts from year-end financial statements, and after an investigation into the company’s accounting practices began, Neil allegedly gave independent auditors false and incomplete information about the payment scheme. Diamond and its former CEO, Michael Mendes, reached a deal with SEC in January 2014 to pay a $125,000 penalty along with returning more than $4 million that Mendes had received in bonuses…
A California federal court has dismissed two claims and allowed four to continue in a putative class action alleging that (i) Salov North America Corp. mislabeled its Filippo Berio olive oils as “Imported from Italy” despite using olives grown and pressed in other countries and (ii) its extra virgin olive oils do not meet the high standards required to qualify as “extra virgin,” partly due to inefficient bottling and transportation. Kumar v. Salov North Am. Corp., No. 14-2411 (N.D. Cal., order entered February 3, 2015). The court first assessed Salov’s challenge to the plaintiff’s standing and found that it could not, as a matter of law, determine that a reasonable consumer would not interpret “Imported from Italy” to mean that the product was made exclusively of Italian olives. Salov also asserted that the plaintiff must have seen the statement on the label that informed consumers that the product was “Packed…
A California federal court has granted plaintiffs’ motion to vacate the judgment and reopened a proposed class action against Attune Foods Inc., finding that the delay in guidance from the U.S. Food and Drug Administration (FDA) on whether “sugar” is the “common or usual name” for “evaporated cane juice” (ECJ), an ingredient that appears on Attune’s labels, could unfairly disadvantage the plaintiffs’ case. Swearingen v. Attune Foods Inc., No. 13-4541 (U.S. Dist. Ct., N.D. Cal., Oakland Div., order entered January 28, 2015). Citing the primary jurisdiction doctrine, the court had dismissed the case without prejudice in May 2014 to await FDA guidance after the agency reopened the comment period in March of that year to determine whether sugar and ECJ are materially different substances. After the plaintiffs sought relief from the judgment, the court has now determined that FDA’s delay could unfairly disadvantage the plaintiffs if the statute of limitations prohibits…
An Arkansas federal court has dismissed with prejudice a putative class action alleging that Twinings North America, Inc. mislabeled its tea by including the statement that the product is a “natural source of antioxidants” on its packaging. Craig v. Twinings North Am., Inc., No. 14-5214 (W.D. Ark., order entered February 5, 2015). The plaintiff had argued that under the Arkansas Food, Drug, and Cosmetic Act (AFDCA), an act identical to the food labeling regulations of the U.S. Food and Drug Administration (FDA), Twinings’ tea failed to meet the nutrient level threshold—10 percent or more of the recommended daily intake—required for a claim about the nutrient content of a product. Twinings argued that the Arkansas law claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) and could impose liability inconsistent with federal law. To assess the preemption argument, the court considered whether the statement “natural source of antioxidants” is…
The office of California Attorney General Kamala Harris will appeal the January 2015 decision overturning the state’s ban on foie gras, according to a notice of appeal filed in California federal court. Association des Éleveurs de Canards et d’Oies du Québec v. Harris, No. 12 5735 (U.S. Dist. Ct., C.D. Cal., notice of appeal filed February 4, 2015). The prohibition was found to impose “[m]arking, labeling, packaging, or ingredient requirements” that interfered with the free flow of poultry products in violation of the federal Poultry Products Inspection Act. The AG’s 1-page notice of appeal cited no arguments supporting its challenge. Additional details about the district court decision appear in Issue 550 of this Update. Issue 554
The European Ombudsman has issued a January 28, 2015, decision directing the European Food Safety Authority (EFSA) to revise its conflict-of-interest rules after the agency “failed to ensure that those experts who work in academia declare all relevant information to EFSA.” Stemming from a complaint filed by GeneWatch, the decision focused on an EFSA working group on genetically modified (GM) insects that included an academic expert whose employer has financial ties to a biotechnology company that “promotes genetically modified insects.” In particular, the European Ombudsman dismissed the agency’s reasoning that “employment by a university has never been considered a conflict of interest at EFSA,” as such a prohibition would disqualify the most qualified individuals from working groups. The decision instead places the onus on EFSA to gather additional information about the nature of the university’s financial relationships and the mechanisms in place “to prevent communication and instructions from the investment arm…
U.S. Immigration and Customs Enforcement (ICE) and Homeland Security Investigations and Customs and Border Protection (CBP) officers have reportedly confiscated since October 2014 about 450,000 pounds of honey produced in China but falsely declared to be from Latvia on import documents. Chinese honey has been subject to a high import tax—currently 221 percent—since 2001, when the U.S. Department of Commerce found that Chinese producers were dumping honey on the market by selling it for lower than production costs. An assistant special agent in charge of Homeland Security Investigations in Houston reportedly identified the city as a “key point of entry” into the United States; in November 2013, agents there seized Chinese honey worth $4.2 million that was falsely labeled as Malaysian and Indian. Chinese honey was also the subject of a 2002 U.S. Food and Drug Administration warning after concerns that it was adulterated with the antibiotic chloramphenicol, which is…
The U.S. Food and Drug Administration (FDA) has extended the deadline for public comments about whether to expand the products included in its guidance titled “Toxicological Principles for the Safety Assessment of Food Ingredients”—also known as the “Redbook.” The agency is apparently considering this expansion “to include chemical safety assessments for all products over which FDA’s Center for Food Safety and Applied Nutrition (CFSAN) has statutory authority including regulatory contexts such as food additives, food contact substances, dietary supplement ingredients, food contaminants, and cosmetics.” According to FDA, “The Redbook would describe toxicological principles which apply across regulatory categories while still providing specific guidance for applying these principles within each particular context. The safety of foods containing microbial contaminants will continue to remain outside of the scope of the Redbook.” Comments may now be submitted until May 11, 2015. See Federal Register, February 2, 2015.
The Food and Drug Administration (FDA) has extended until February 27, 2015, the deadline for submitting materials related to (i) nominations for a non-voting industry representative to serve on the Food Advisory Committee and (ii) statements from organizations interested in participating in the selection process for the non-voting committee member. The Food Advisory Committee evaluates data and makes recommendations on such matters as food ingredient safety, food and cosmetic labeling, nutritional issues, and exposure limits for food contaminants. See Federal Register, February 2, 2015. Issue 554
