This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.
- Appeals court rejects lawsuit calling for mandatory “cage-free” egg labeling. On February 27, the US Court of Appeals for the Ninth Circuit rejected a lawsuit filed by two animal advocacy groups and six egg consumers who had sought to require the federal government to impose mandatory labeling requirements on eggs. A three-judge panel of the court ruled that several federal agencies had acted reasonably in rejecting such labeling requirements. The plaintiffs had wanted egg cartons to carry the terms “Free-Range Eggs,” “Cage-Free Eggs,” or “Eggs from Caged Hens.” They contended that eggs from cage-free hens are nutritionally superior and are less susceptible to Salmonella contamination. In 2015, after an outbreak of avian flu forced reductions in traditional egg production, more customers turned to cage-free eggs, and several major manufacturers switched all or part of their egg usage to cage-free.
- Will the US Supreme Court accept ConAgra’s request and hear its class action appeal? On February 21, ConAgra petitioned the US Supreme Court to hear its appeal of a lower-court ruling related to the company’s use of the term “100 percent natural” on its Wesson brand cooking oils. ConAgra based its appeal not on the accuracy of the Wesson labels, but rather on the “ascertainability” or “administrative feasibility” for class actions. The Ninth Circuit previously granted class certification, but ConAgra contends that certification requires plaintiffs to provide a way of identifying all class members with certainty, such as through receipts of purchase. Circuit courts are split on ascertainability in the context of class actions. Strict ascertainability requirements for class certification could impact the use of class actions in food cases, since many consumers do not keep receipts for low-value items like food.
- Philadelphia’s soda tax brings in $5.7 million in first month. One month in on the new tax on sugary beverages, Philadelphia’s public health department announced that the 1.5 cent per ounce tax has brought in $5.7 million, more than twice the $2.3 million that had been expected. The city also saw a decrease in per capita consumption of sugary beverages of more than 40 percent. The American Beverage Association is continuing to challenge the tax in the Philadelphia County Court of Common Pleas, on the grounds that it is unconstitutional and adds to a sales tax already imposed on these beverages.
- What do consumers think about the term “milk”? DairyReporter magazine recently conducted a non-scientific survey to assess what consumers think about milks and use of the term “milk” with plant-based beverages, such as almond milk or soy milk. The survey indicated that while the market for plant-based beverages is growing, cow’s milk still factors into most people’s diets. The so-called “milk wars” of late involve dairy milk manufacturers urging federal government action to prohibit manufacturers of soy milk and similar products from using the term “milk” to describe their products. One notable conclusion from the DairyReporter survey was that everyone surveyed said they would be less likely to buy almond milk if it was called “almond beverage.”
- US Chamber official blasts increasing number of cases against food companies. In an op-ed published February 28 in Food Dive magazine, Lisa Rickard, resident of the US Chamber Institute for Legal Reform, took aim at what she sees as the ever-increasing number of cases against food manufacturers and sellers filed by plaintiffs lawyers. “Lawsuits over food labeling can bring big paydays for attorneys, but leave consumers with nothing more than higher prices in the checkout line,” Rickard wrote. She reported on a study her institute had completed that showed there are now 425 food cases in federal courts, up from only 19 back in 2008. Among the points she made: “Most consumers know that eating doughnuts won’t help increase their intake of potassium and vitamins A and K, but a lawsuit against Krispy Kreme claims the plaintiffs were deprived of the nutritional value of real berries from the doughnut maker’s raspberry filling.” She also criticized “slack fill” cases, which challenge the extra space in food packaging. She suggested that Congress pass the Fairness in Class Action Litigation Act and that courts should reject attorney fee awards that are disproportionate to the actual benefit for consumers.
- Food company CEO launches new advocacy group. Daniel Lubetzky, CEO of snack manufacturer KIND, announced February 15 that he is launching a new public advocacy group, Feed the Truth, to promote scientifically accurate policy about food and food labeling and to oppose what Lubetzky sees as excessive influence by the food industry on federal regulators. Lubetzky is giving $25 million to fund the organization – $5 million now and $20 million more over the next decade. He says he will not have any role in deciding the organization’s approach beyond choosing the three nutrition experts who will select the group’s board. The experts are Debra Eschmeyer, executive director of Let’s Move! and senior advisor for nutrition policy in the Obama Administration; Michael Jacobson, cofounder and president of the Center for Science in the Public Interest; and Marion Nestle, professor of nutrition, food studies and public health at New York University. Lubetzky says he was motivated by such rules as an FDA labeling regulation, dating back to the height of the anti-fat craze, which prevents even makers of “good” fats from calling their products healthy, while allowing the “healthy” label on some high-sugar products. Lubetzky said the new group will probably end up opposing many anti-regulatory initiatives undertaken by the food industry. Forbes magazine asked: “What, exactly, will Feed the Truth do? Well, that will depend on the board of directors and how the organization evolves.”
- Pea-based “milk” company strikes out against dairy and against other “milks” as well. Ripple Foods, which makes a pea protein-based drink, has weighed in on the plant-based “milk” debate with a provocative new media campaign that challenges the nutritional and environmental credentials of dairy milk – but also brands almond milk a “sham” and says that when it comes to protein content, coconut and cashew milk are “even worse.” The dairy milk industry and makers of plant-based beverages are now locked in a public relations and legal battle over whether products like almond milk should legally be entitled to be called “milk.” Ripple CEO Adam Lowry was quoted in Fortune magazine February 16 as saying: “Lacteal secretions of hooved animals? Ew. What better way to highlight that humans are the only species on the planet that drinks another lactating species’ milk. The dairy industry is playing defense. People are drinking a lot less milk, and their business is declining.”
- Quorn settles lawsuit on its labeling of its mold-based product. On February 6, Quorn Foods, which makes vegetarian and vegan meat substitutes, settled a lawsuit filed by a consumer who claimed that Quorn’s label did not adequately indicate the product is grown from mold. Its mold-based mycoprotein ingredient can be found on the FDA’s list of products that are “generally recognized as safe,” but many consumer groups say it has the potential to be harmful to human health. Quorn said it was settling the lawsuit, which was filed in the US District Court for the Central District of California, without admitting any wrongdoing. The company agreed to modify the wording on its packaging and to pay refunds to anyone who could prove that he or she had purchased the product at any point in a period of nearly five years. The plaintiff in the case did not allege that she had suffered harm to her health but only that Quorn’s labeling gave her the incorrect impression that the food came from palatable foods like mushrooms, truffles and morels – not from mold.
- Seattle mayor proposes new tax on sugary drinks. On February 21, Seattle Mayor Ed Murray proposed a local tax of two cents per ounce on all sugary drinks, such as regular sodas, bottled teas, and energy drinks. The tax would be paid by distributors and would fund education programs and “eliminate the opportunity gap between white students and African American/black students and other historically underrepresented students of color,” Murray said. Several localities around the US, among them Berkeley, California; Philadelphia; and Cook County, Illinois, home to Chicago, have put in such taxes in place recently, with stated goals of improving public health while raising revenue. In his statement, Murray said the tax in Berkeley has already reduced consumption of sugary drinks there by 20 percent. The beverage industry has strongly opposed similar taxes in other locations over the years. The Seattle tax, if passed, is expected to raise $16 million in its first year.