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

  • Former food executive faces possible life sentence for salmonella outbreak. The possible fate of Stewart Parnell, a former president of the Peanut Corporation of America, is being discussed in media worldwide. Federal prosecutors have proposed a life sentence for Parnell, based on federal sentencing guidelines, for his role in a lethal salmonella outbreak that began in 2008. Nine people died in the massive outbreak, and more than 700 became ill, according to the Centers for Disease Prevention; some sources set the figure in excess of 20,000. The Wall Street Journal observed that such a sentence “would be by far the most severe in a US criminal case involving food-safety violations.” The Washington Post noted that court evidence revealed “one of the most blatant coverups of lethal food production practices.” The New Yorker observed that the evidence in the case “left little room for debate over how much [the company’s officials] knew about the contamination, when they knew it, and what they did to stop it – or didn’t.” Stewart Parnell’s sentencing will take place September 21, as will the sentencings of his brother, peanut broker Michael Parnell, and Mary Wilkerson, former quality manager at PCA’s peanut processing plant.
  • FDA issues warning regarding the use of whole stevia leaf. The FDA issued a warning letter on July 31 to a San Francisco-based tea company, noting that whole stevia leaf, which is used in some of the company’s products, is not on the Generally Recognized as Safe (GRAS) list that the agency maintains and is thus not acceptable for use in products such as teas. “While FDA has received inquiries and petitions for the use of whole-leaf stevia or its crude extracts in food, data and information necessary to support the safe use have been lacking,” the agency wrote. “In fact, literature reports have raised safety concerns about the use of such forms of stevia, including concerns about control of blood sugar, and effects on the reproductive, cardiovascular and renal systems.” Accordingly, the agency told the tea company that the use of stevia leaf does not satisfy the GRAS criteria and is not acceptable. In the past, the agency has not objected to the use of refined stevia preparations in foods.
  • Kellogg’s plans to remove artificial colors and flavors from its cereals. Kellogg’s has decided to remove all artificial colors and flavors from its cereals, some of its snack bars and its Eggo frozen foods by 2018. The cereal maker’s decision comes less than two months after the announcement by General Mills that it will do the same thing by 2017. Paul Norman, president of Kellogg North America, announced the no-artificial decision on August 4, saying it was part of the company’s broader push to revitalize the US cereal industry. He said 75 percent of the company’s cereals are already manufactured without artificial colors and that more than half are already made without artificial flavors. “We will continue to renovate our core offerings to give consumers more of what they want in the way of nutritional benefits, such as protein, gluten-free choices and simpler ingredients,” Norman said.
  • Food industry leader cautions about rapid increase in class actions. According to an August 6 article in Supermarket News by Brian Todd, president and CEO of the Food Institute, the litigation landscape has changed dramatically, and not for the better, for food companies in the last several years. Todd wrote that the number of class actions filed against food companies has risen dramatically over the past decade and that more than 200 such cases have been filed. These cases often allege that a promotional claim made in labeling or advertising violates federal or state consumer protection laws. Health benefit claims, “natural” claims, “made in the USA” claims and many others are now increasingly targeted by class action lawsuits, Todd concludes, and companies need to be aware of this when making labeling or advertising claims.
  • General Mills will remove artificial flavors and colors from Fruit Snacks. General Mills, which announced two months ago that it will remove artificial flavors and artificial colors from its cereals, announced on August 12 that it is removing them from its Fruit Snacks as well. Jacquie Klein, a senior marketing manager at the company, said, “We believe in the products that we have today and see this as an opportunity to make them even better. This is all about continuing to deliver what families want and meet the changing needs of consumers over time.” Artificial flavors and colors will be gone from the company’s Fruit Snacks “shapes” by early 2016 and from the company’s other snacks, including Fruit Roll-Ups, by the end of 2017. The company will replace artificial dyes with ingredients derived from fruit and vegetable juices.
  • Berkeley soda tax may not have had desired effect, according to study. The first-ever tax by a US locality on sugary soda may not be going the way that its proponents expected, according to a study by economists at the University of Iowa. Starting on January 1, 2015, Berkeley, California imposed a penny-per-ounce tax on sweetened soft drinks, expecting that the tax would raise consumers prices for consumers and thus discourage the purchase of these drinks. But the study found little evidence that prices actually went up. The study appeared August 17 as a National Bureau of Economic Research working paper entitled “The Incidence of Taxes on Sugar-Sweetened Beverages: The Case of Berkeley, California.”
  • Addressing the ongoing cyclospora outbreak(s). At least 600 people in 30 US states and 4 Canadian provinces have fallen ill with cyclospora in recent weeks. Although the scientific causes of the outbreak are not yet fully known, early this summer the FDA issued an import alert that detains at the border all cilantro from the State of Puebla through August 31. The FDA is also generally forbidding agricultural products from Puebla from entering the US without inspections and certification. The bans were instituted when inspectors found disturbing conditions, such as human waste, in growing fields across Puebla. But while the agency says that although cilantro from Puebla is a suspected cause of the outbreak, the investigation “is ongoing and a conclusive vehicle for any of the 2015 cases or clusters of illness has not been identified.” Citing a possible link in some cases to bagged salad greens from Mexico, Centers for Disease Control officials are starting to suspect that the outbreak is actually two outbreaks.

Some leading US epidemiologists say FDA should have acted more quickly. “This is a day late and a dollar short,” Michael Osterholm, director of the Center for Infectious Disease Research at the University of Minnesota, said to Politico Morning Agriculture on August 19. Cyclospora outbreaks linked to Pueblan agriculture date back to at least 2013, Osterholm observed.

Other food safety experts are calling on the food industry itself to build on its self-policing work. Writing in Food Safety News on August 17, sanitarian Roy Costa noted the industry’s major achievements in reducing E.coli and salmonella outbreaks. Today, he said, the serious outbreaks tend to arise from pathogens like listeria and cyclospora, which possess “unique abilities to survive the typical steps that show promise in controlling other produce-borne infectious agents.” He continued, “After all the industry has done to improve sanitation, it is disheartening and frustrating to all of us trying to make a difference to see a complete breakdown of basic sanitation in a major foreign supplier.” Costa went on to affirm that industry cannot solve the problem alone. This outbreak, he said, “raises some very serious questions about the competency and capacity of our current supplier control and food safety auditing efforts.”

In a Politico story dated August 29, journalist Helene Bottemiller Evich reported, “Some officials are ready to finger one culprit that has hindered their investigation: the sequester,” which has forced the CDC to slash US$285 million from its budget “at a time when food and health experts say disease detection needs more funding as these types of food outbreak cases become more complex and widespread.”

Meanwhile in Canada, the Public Health Agency is collaborating with provincial public health partners, the Canadian Food Inspection Agency and Health Canada to investigate its cyclospora outbreak, and early in August issued a warning – widely reported in Canada – to consumers to take extra care when cleaning and storing fresh produce.

  • Is fructose next? Will fructose be the next food ingredient, long been regarded as innocuous, that will end up facing a ban for health reasons? The FDA’s recent decision that trans fats cannot be regarded as Generally Recognized as Safe (GRAS) essentially removes trans fat from the American diet. Simone Baroke of business intelligence provider Euromonitor International made a possible case against fructose in an August 12 Analyst Insight article. She noted that while there is no longer any doubt about the harmful effects of trans fats on health, “the scientific evidence that could bring down fructose is only just starting to gather force.“ Baroke concluded that “legal requirements aimed at reducing fructose in the food supply are probably at least a decade off, but the day when fructose will have to disappear from ‘clean labels’ is coming into view already.” Manufacturers, she warned, should think about reformulating their products to eliminate fructose as soon as possible.
  • Blue Bell is on the way to putting its products back in stores. On August 17, Blue Bell Creameries announced that it would return its ice cream products to stores on August 31, several months after they were removed because of a Listeria outbreak. The Texas-based company said it would roll out its products in five phases but that its plan to sell ice cream in parts of 15 states will “take some time” to implement as it brings its production facilities on line. The company is also working to rebuild consumer trust and recently affirmed that it has “been working to make our facilities even better and to ensure everything produced is safe, wholesome and the highest quality for you to enjoy.” The FDA linked the company’s products to 10 illnesses in four states, including three deaths; the Dallas News reported that illnesses linked to Blue Bell products date back to 2010. The April 2015 recall led the company to eliminate about one-third of its work force, and it is gradually re-hiring.
  • Hampton Creek says it has no plans to change the name of its “Just Mayo” product. The CEO of Hampton Creek told Inc. magazine on August 25 that the company is not planning to change the name of its “Just Mayo” product despite allegations from the FDA in a warning letter that the product’s name is misleading. “There’s no reason for us to rename the product,” Josh Tetrick told the magazine. The FDA had warned the company that since its “Mayo” products don’t contain any eggs, they run afoul of the federal definition of “mayonnaise.” But Tetrick said that he has been in touch with the FDA and that he hopes that the agency will agree with his arguments about the name. According to the FDA’s August 12 warning letter, the company has 15 business days to respond with a plan for how it will correct the violation. Unilever, which makes Hellmann’s mayonnaise, had sued Hampton Creek over the same allegations, but dropped that suit last December.
  • FTC says FDA should reevaluate its regulatory framework for homeopathic products.The FTC is recommending that the FDA reconsider the framework it uses to regulate homeopathic medications. The FDA’s policy “may appear to conflict with the FTC’s advertising substantiation doctrine in ways that could harm consumers and cause confusion for advertisers,” the FTC said in a comment submitted to the FDA on August 21. Dating back to a 1988 Compliance Policy Guide, the current FDA regulatory framework does not require over-the-counter homeopathics to be FDA approved as safe and effective if they satisfy certain conditions. The label must contain an indication for use, but sellers are not required to substantiate that indication with reliable supporting scientific evidence. The FTC’s long-standing advertising substantiation policy, in contrast, holds that health claims must be supported by scientific evidence.
  • Powdered alcohol may soon face a ban in the District of Columbia. Even though powdered alcohol was approved for sale by a federal agency in March, 25 states have already prohibited it, and the District of Columbia may be the next jurisdiction to follow. DC Councilmember Mary Cheh toldWashingtonian magazine in an August 25 online article that she is inclined to support a ban proposed by DC Mayor Muriel Bowser. “For me, it’s the costs versus the benefits, with the one benefit being it makes it more convenient for adults to drink liquor wherever they want,” she said. “The costs seem more severe, especially in enabling the underaged population. It just creates a potential for mischief.” Mark Phillips, president of the Lipsmark Company, which manufactures powdered alcohol, has denied that the substance will increase underage drinking or make it easier to spike a drink.