The U.S. Food & Drug Administration (FDA) has exercised its power to suspend the registration of a food manufacturing facility due to a link between an outbreak of Salmonella Bredeney and the facility’s peanut butter products. Approximately 41 people across 20 states have fallen ill thus far as a result of this salmonella outbreak. This is the first time the FDA has taken such an action since the January 4, 2011, enactment of the Food Safety Modernization Act (FSMA), which essentially modified the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq.
Actions Culminating in Suspension
While the subject company, Sunland, Inc. (Sunland), had already engaged in voluntary recalls, the FDA’s investigative findings led up to its suspension on November 26, 2012. More specifically, Sunland’s nut butter products and facility tested positive for the presence of salmonella on a number of occasions between June 2009 and September 2012. Not only did the company’s own testing records show the presence of salmonella in 11 product lots over the course of this three-year period, but the company also distributed 8 product lots to the public between March 2010 and September 2012 that it knew tested positive for salmonella. Additionally, during its investigation of the Sunland peanut butter recall, the FDA found the specific strain of the pathogen at issue in a container of Sunland’s product found in one victim’s home. The FDA also cited a number of “good manufacturing practice” violations at Sunland’s facility in its suspension order.
Impact of Suspension
A food manufacturing facility such as Sunland must be registered under the FSMA for it to manufacture, process, pack or hold food for consumption in the United States. See 21 U.S.C. § 350d(a). Accordingly, a suspension of such registration creates a profound effect by effectively shutting down a facility. Here, the FDA’s suspension of Sunland prohibits any person from (1) importing or exporting food into the United States from Sunland, (2) offering to import or export food into the United States from Sunland or (3) otherwise introducing food from Sunland into interstate or intrastate commerce in the United States.
This facility suspension order (FSO) includes all food produced prior to the suspension order that is currently in Sunland’s control. It does not, however, affect Sunland’s prior recalls. Nevertheless, Sunland may not reintroduce recalled products into the stream of commerce once those products are returned. Introduction of Sunland products into interstate commerce in violation of the FDA’s directives can result in injunction proceedings (over which the U.S. district courts have jurisdiction pursuant to the FSMA) and penalties of up to one year’s imprisonment and/or a $1,000 fine. See 21 U.S.C. §§ 331-333.
The standard for suspending a facility’s registration is whether food manufactured, processed, packed, received or held by the facility has a reasonable probability of causing serious adverse health consequences or death to humans. See 21 U.S.C. § 350d(b)(1). While Sunland had already voluntarily recalled hundreds of its products beginning on September 23, 2012, and supplied a written response to the FDA’s investigation that outlined the corrective actions it intended to take, the FDA still found the threshold for suspension had been met. Indeed, the FDA cited (1) the inspections revealing the presence of salmonella both at Sunland’s facility and in its products and (2) the salmonella illnesses that were definitively traced back to Sunland as grounds for the suspension.
FSO Requires Immediate Action
This first FSO provides food companies and insurers with critical information as to how the process will unfold.
Sunland does have one rather anemic mechanism with which to combat the suspension – it can request an informal hearing. See 21 U.S.C. § 350d(b)(2). The hearing must be held “as soon as possible” but no later than two business days after the suspension order, unless the FDA and Sunland agree to a longer time frame. If, however, Sunland wishes to have the hearing within two days, the FDA suspension order directs Sunland to make such request within one business day of the date of the order. The order also provides that if Sunland does not request a hearing within three business days, its right to a hearing will be deemed to have been waived.
The hearing request is made to a “presiding officer” as designated by the FDA and must include written information that Sunland believes shows there is a “genuine and substantial issue of fact” that warrants a hearing. Similar to the standard for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, a hearing request may not rest upon mere allegations or denials, but must be supported by specific facts to justify a hearing. The presiding officer may deny the hearing request if it is untimely or if he or she determines that Sunland has not sufficiently raised a genuine or substantial issue of fact relative to the suspension.
The informal hearing is governed by the procedures contained in 21 CFR 16. If Sunland chooses to request a hearing and that request is granted, Sunland will be allowed to address the actions necessary for reinstatement of its registration as well as explain the reasons why it should be reinstated. Such hearings are closed to the public to prevent the disclosure of a trade secret or other confidential commercial or financial information that is not available for public disclosure. If the presiding officer determines that adequate grounds do not exist to continue the suspension, he or she must promptly vacate or modify the suspension order and reinstate registration.
In the more likely event that the presiding officer determines suspension should remain in effect, Sunland will then be required to submit a written corrective plan as to how it intends to remedy the conditions the FDA found to be unsavory. The presiding officer must review this corrective plan within 14 days of receipt, unless he or she determines a longer period is necessary. Presumably, even if the corrective plan is approved, the FDA will wish to inspect the facility to ensure the plan is effective. The procedures to be followed after submission of the corrective plan, however, are not spelled out in the FSMA.
Upon receipt of an FSO that forces a facility to completely cease all operations indefinitely, a company will incur significant losses. While a company may appeal FSO by requesting a hearing, the standards warranting a hearing and reversing the suspension order are difficult to achieve. Accordingly, the FSO may have more bite than originally contemplated, such that its import should not be taken lightly. Companies must be properly prepared to respond to the FSO’s extremely short deadlines and the FDA’s information demands. By acquiring a product contamination policy, which includes crisis management entitlements and consultant costs, companies can be equipped for such a crisis event.