Food and Beverage News and Trends

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

• USDA is sued over its rules for bioengineered foods. On October 2, the nonprofit Center for Food Safety filed a lawsuit against the USDA challenging the department’s new rule on the labeling of bioengineered foods. The lawsuit focuses on the fact that the department regards its rule as preempting all efforts by states to mandate disclosures by food makers and sellers of the presence of bioengineered ingredients. "Consumers have a right to know what’s in their food, including whether it is genetically engineered or not. That’s what this case is fundamentally about: meaningful labeling," said George Kimbrell, the legal director of the center. "The same goes for seeds. The decision takes away states’ rights to label seeds, while offering absolutely nothing in return."

• FDA seeks information from public on alternative sweeteners. On October 16, the FDA announced it is accepting comments from the public about the best way to handle the labeling on food and beverage packaging of certain sweeteners that are metabolized differently than sugar. These sugars, which include allulose, D-tagatose and isomaltulose, are lower in calories than regular sugar. They are used frequently in foods and beverages but are not always indicated as sweeteners under the current designs of Nutrition Facts and of ingredient lists. Therefore, consumers may not always know what sweeteners are in products and in what quantities. In June, the Sugar Association filed a petition with the FDA asking for a review of the labeling rules that apply to these alternative sweeteners. "The FDA is committed to providing information to manufacturers regarding the new Nutrition Facts Label, which is why today we are also seeking information on certain sugars and sweeteners that are metabolized differently than other traditional sugars," said the FDA’s Susan Mayne.

• Meat organizations urge USDA to require labeling for cell-based meat products. On October 19, the Alliance for Meat, Poultry and Seafood Innovation and the North American Meat Institute sent a letter to USDA Under Secretary Mindy Brashears, calling for mandatory labeling of meat and poultry grown from cells. The letter pointed out that, historically, when a new product’s characteristics are "substantially different" from a conventional product, the USDA and the FDA have required that the new product be labeled properly in order "to inform consumers of such material finished product differences." The letter went on to urge that, after an appropriate public comment process, the department should require such labeling.

• COVID-19 in the news.  The coronavirus disease 2019 (COVID-19) pandemic continues to affect the food and beverage sector.  Here are a few recent developments.
  
  On October 6, Washington Governor Jay Inslee announced that, as the nation continues to fight the COVID-19 pandemic, restaurants in the state will be allowed to seat up to six guests per table in counties that are in Phase 2 of the state’s recovery plan and up to eight guests for counties that are in Phase 3. In addition, restaurants will now be permitted to serve alcohol until 11 pm. The decision was viewed as a compromise between a food and alcohol industry that needs economic relief and a state that continues to fight COVID-19, at a time when indoor dining and hanging out in bars have been identified as among most high-risk activities.   "We’re hopeful this is going to allow restaurants to boost business in a safe way," Inslee said. "We’re doing this because we want to recognize the progress we’ve made, we want to celebrate it, and we hope that this will show an incentive for our increasing desire to do the things that work, which includes wearing masks."
  
  On October 16 in Miami, the Miami-Dade Circuit Court issued an injunction allowing Tootsies Cabaret, a strip club, to stay open until 6 am, its typical closing time.  An order issued by Mayor Carlos A. Giménez has mandated that bars and restaurants close at midnight to help minimize the spread of COVID-19.  The injunction went on to, in essence, strike down the entire curfew by barring its enforcement.  On October 19, the Third District Court of Appeals issued a temporary stay against the injunction.  Mayor Giménez said, "This means that, pending the appeals court deciding on the matter, the curfew remains in effect and is enforceable."
  
  On October 20, San Francisco became the first California city to move into the yellow tier on the state’s reopening scale.  Starting November 3, restaurants, including those within hotels, museums, and shopping centers, may increase their indoor capacity to 50 percent, with up to 200 people and a maximum time limit per table seating of three hours.
  
  Also on October 20, Illinois Governor JB Pritzker pointed to a “new wave” of surging COVID-19 cases, hospitalizations and deaths as he announced fresh restrictions for businesses, to begin October 23, in 4 of the state’s 11 healthcare regions – the Chicago collar counties Will, Kankakee, Kane and Dupage, where dining and drinking in indoor venues will once again be off limits, possibly for weeks. Then, on October 23, he announced that, due to the dramatic rise in caseload, all non-essential Chicago businesses will close from 10 pm to 6 am; all liquor sales must end at 9 pm; and bars that don’t have a food license can no longer serve patrons indoors. Governor Pritzker, Chicago Mayor Lori Lightfoot and Cook County chief health officer Dr. Allison Arwady said large gatherings are the principal source of the newest wave. Dr. Arwady stated that in Chicago now, there is "a 30 percent chance that someone in a group of 25 people has COVID-19. There is a 50 percent change that someone in a group of 50 has COVID-19. Even in a group of 10, there’s a 14 percent chance someone has COVID-19.” Restaurant delivery and takeout businesses and groceries are among those exempt from the Chicago restrictions.
  
  Again on October 20, New Mexico Governor Michelle Lujan Grisham announced further restrictions on businesses, including restaurants, beginning October 23, in response to the state’s climbing caseload. Grisham did not put a stop to indoor dining, but restaurants that wish to offer indoor dining must complete the state’s COVID-safe certification program. Upon completion of the program, they will be allowed to serve indoor patrons at 25 percent capacity, along with offering outdoor service.
  
  And in New York City, on October 21 Governor Andrew Cuomo announced that, following a two-week-long shutdown on indoor and outdoor dining, restaurants in some parts of Queens will be allowed to resume service – the first businesses to emerge from the zoned shutdown order that still affects other parts of Queens and some sections of Brooklyn. Meanwhile, restaurants and bars may now add a "COVID surcharge" of up to 10 percent to patrons’ tabs.  The voluntary measure was put in place to help establishments struggling to stay in business. Some businesses say an extra charge will drive away customers, while others welcome the new surcharge, saying it will help offset the extra costs of cleaning and providing personal protective equipment for staff and patrons.

• Tofurky sues to invalidate new Louisiana law on plant-based foods. On October 7, Tofurky, a company that makes plant-based sausages, roasts and similar products, sued the state of Louisiana to try to overturn a new state law that bans grocery stores from calling veggie burgers "veggie burgers" and bars other similar terms for plant-based meat. The Louisiana law is the latest of a set of state laws backed by meat companies that seek to restrict what plant-based companies can say about their products. In its First Amendment-based lawsuit, which was filed in the US District Court for the Middle District of Louisiana, Tofurky contends that the law suppresses its right to engage in truthful speech about its products. In the lawsuit, Tofurky is backed by the Animal Legal Defense Fund and the Good Food Institute. "It’s absurd that Louisiana’s elected officials are spending their time on the imaginary crisis of people confusing veggie burgers for beef burgers," said an institute spokeswoman.  See some of our earlier coverage of this legislative trend here and here.

• Case over "natural" claims for apple juice and applesauce is dismissed. On October 6, the US District Court for the Northern District of California dismissed a class-action complaint that had been filed against Dr. Pepper Snapple Group, Inc. and Mott’s LLP, concerning the labeling of Mott’s applesauce and apple juices. The lawsuit alleged that the defendants misled consumers by labeling the products as composed of "All Natural Ingredients" when they actually contained trace amounts of the pesticide acetamiprid. Last year, the court dismissed an earlier version of the lawsuit and this time, the court found that the amended suit was substantially similar to the previous version. Even as amended, the court said, the complaint does not plausibly allege that a reasonable consumer would interpret the terms "Natural" and "All Natural Ingredients" to imply that the products were utterly without any trace of residual pesticides. She added that the plaintiffs’ addition of two generic surveys about consumer attitudes to the word "Natural" did not change the outcome.

• Court rejects preemption claim, permits class action against Campbell’s to continue. The US District Court for the Southern District of Illinois on October 5 rejected a bid by Campbell’s Soup Co. to dismiss, on the grounds of federal preemption, a putative class action. Two consumers had claimed that Campbell’s misleadingly advertises that certain soups contains no preservatives. The company had sought the dismissal, asserting that the allegations were preempted by two federal laws, the Meat Inspection Act and the Poultry Products Inspection Act. These laws allow the USDA to impose labeling standards for meat and poultry products. Campbell’s contended that this principle applied to its soup products as well. The court, however, rejected this contention, noting that none of the soups in question even contained any meat or poultry ingredients.

• Haagen-Dazs is sued over content of the chocolate in its ice cream bars. In a class action complaint filed on October 13, a New York City resident is alleging that Haagen-Dazs ice cream bars are falsely advertised because the chocolate in the bars contains some quantity of vegetable oils rather than pure cacao. The lead plaintiff alleges that "the unqualified, prominent and conspicuous representation" by the company that the bars are dipped in milk chocolate is misleading because the chocolate contains vegetable oils, which consumers do not expect to find in chocolate. The complaint alleges that had the plaintiff known about the actual composition of the ice cream bars, she would have paid less than the "premium price" of $5.99 for three bars. The case was filed in the US District Court for the Southern District of New York.

• Hard-cider company settles lawsuit about its use of malic acid. On October 11, 2 Towns Ciderhouse agreed to settle a lawsuit that had alleged it manufactured, marketed, advertised and sold hard apple cider products as containing "Nothing Artificial: No concentrates or refined sugars; No essences or artificial flavors; No velcorin or sorbate," when in fact some of the company’s hard apple cider products use DL-malic acid, a synthetic version of the malic acid found in fruit,  commonly used to adjust acidity. The company denied all the claims in the lawsuit and denied all wrongdoing. It established a fund of just under $1 million for the purpose of satisfying consumer claims in the settlement. The case was filed in the US District Court for the Southern District of California. 

• Food industry expert looks at possible federal food policy under a Biden Administration. Former food-industry executive Sean McBride, in an October 19 column in Food Dive magazine, looked ahead to possible changes in federal food regulatory policy should Joseph Biden be elected the 46th US president. McBride, former executive vice president of communications at the Grocery Manufacturers Association, now known as the Consumer Brands Association, noted that the food policy landscape could look considerably different under a Biden Administration. He said that there might be attempts to impose new restraints on food advertising and food labeling that were previously under consideration during the Obama Administration. He noted that Beverage taxes, McBride said, were at one time considered for use as funding mechanisms for Affordable Care Act programs, but were rejected after complaints from industry and consumers; but, he continued, that the concept may return at the federal level. In general, McBride emphasized that the Trump Administration has been more free market oriented but that this trend may end if Biden wins. 

For more information

Please visit our Coronavirus Resource Center and subscribe to our mailing list to receive alerts, webinar invitations and other publications to help you navigate this challenging time.

This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.