Our colleagues Michael Arnold and Gauri Punjabi recently discussed the U.S. Supreme Court’s rejection of the Federal Rule 68 “pick off” strategy on Mintz Levin’s Employment Matters Blog. We previously blogged about this crafty strategy employed by class-action defense counsel back in November 2014. Following the recent Campbell-Ewald Co. v. Gomez decision, defense counsel may no longer argue that a rejected Rule 68 offer that fully satisfies a named plaintiff’s claims is sufficient by itself to moot an action. Under basic principles of contract law, the Court ruled, an offer of judgment once rejected has no force and parties retain the same stake in litigation as at the outset. However, this decision does not necessarily foreclose defendants from “picking off” named plaintiffs by making an actual payment for the full amount of the claim. To read more about the defeat of the Rule 68 “pick off” strategy and the actual payment option, click here.
Reversing course from the end of 2015, FDA recently announced an import ban on genetically engineered (GE) salmon until such a time as comprehensive labeling guidelines are introduced. Despite FDA’s approval of GE salmon in November 2015, the agency appears to have bowed to congressional pressure and placed a hold on the importation of the AquAdvantage Salmon pending resolution of the labeling guideline controversy. It is worth noting, however, that the GE salmon’s producer, AquaBounty Technologies, is not ready to import or distribute the product so the FDA import ban is not expected to have an effect on the company’s current operations.
Back in September we blogged about the Warning Letter that FDA issued to Hampton Creek Foods, Inc. for its vegan food dressing and sandwich spread, “Just Mayo” and a similar product, “Just Mayo Sriracha.” In addition to several other interesting labeling violations, FDA noted that “Just Mayo” was not mayonnaise as defined by federal regulations because it does not contain eggs, the essential ingredient in traditional mayonnaise. Citing other ingredients not found in traditional mayonnaise and a label containing an image of an egg with a bean sprout growing inside, the Agency warned that “Just Mayo” was misleading to consumers and misbranded in violation of federal law. Among other things, the Agency argued that the word “Just” suggested that the products contained “nothing but” mayonnaise as it is traditionally defined. It gave Hampton Creek time to voluntarily come into compliance with the regulations before the Agency would take further action.
After reportedly negotiating with FDA, Hampton Creek has announced that it is implementing significant changes on the label for these flagship products (see, for example, this NY Times story). “Just Mayo” and “Just Mayo Sriracha” will keep their names and their ingredients, but the new labels will have a smaller image of the egg along with larger text for the words “egg-free.” In addition, the word “Just” will be defined on the labels as an adjective with the meaning, “guided by reason, justice, and fairness.” The definition comports with the company’s focus on supporting a food system aligned with values that promote good food for all people. In other words, the new labels shrink the emphasis on eggs and increase the context of the company’s values.
These changes and others satisfied the FDA, which issued a Close-Out Letter to Hampton Creek in mid-December, ending the enforcement risks to stemming from the Agency’s earlier warnings. In our experience, this type of agreement – in which a specific definition is added in response to FDA’s concerns about the potential misleading nature of a label to consumers – is not typical and should be scored as a “win” for food companies, especially smaller, innovative brands. It can also be considered another chapter in wider efforts by regulated industry as a whole to push back on the limits of FDA’s (and FTC’s) long-standing interpretations regarding what consumers view as “false or misleading,” a story that will undoubtedly continue to evolve in 2016 and beyond.
On Tuesday, the Senate Health, Education, Labor, and Pensions (HELP) Committee unanimously approved the President’s nomination of Dr. Robert Califf as the next commissioner of food and drugs. (Senator Bernie Sanders, I-VT, who would have voted against the nomination, was not present at the January 12th committee session.) Dr. Califf appeared in front of the HELP Committee in mid-November; if readers are interested, they can watch that hearing here and read his written testimony here.
Dr. Califf’s nomination has bipartisan support in the Senate and also from most stakeholders in regulated industry, who cite the cardiologist’s extensive expertise in clinical trials as a plus in a period where FDA is grappling with how to modernize the clinical trial system, handle vast amounts of digital data, and be more flexible in its requirements for cutting-edge products.
Despite his qualifications and overall support, however, an ongoing controversial regulatory issue could put a damper on how quickly Dr. Califf is able to start his new job. Continue Reading
Last year, we wrote about a growing trend of local jurisdictions regulating children’s products, primarily toys and apparel. One such jurisdiction, Albany County, NY, enacted a far-reaching ordinance, “Local Law J of 2014,” that prohibited the sale of children’s products containing seven chemicals of “high concern” (see previous blog post here). At the time, we questioned the usefulness of this type of local legislation given the existing federal (and often state) product safety regulatory framework. Now, in the face of vocal opposition to the law from industry, which included the filing of a lawsuit in federal court, the Albany County Legislature has amended the law in an attempt to address industry concerns (see Local Law P of 2015). While the amendments are a step in the right direction, many concerns over potential adverse and unintended consequences remain.
Has your business experienced difficulty identifying on the CPSC’s website which product safety regulations are potentially applicable to your products? In an effort to better guide industry, particularly new product makers and small businesses, through the maze of CPSC regulatory requirements and guidance, the CPSC rolled out earlier today a new self-help compliance tool—the Regulatory Robot (“Robot”)—intended to do just that. Neal Cohen (no relation), the CPSC’s Small Business Ombudsman, and the Small Business Education team, spearheaded the development and launch of the Robot with the support of the Commission. Continue Reading
The first round goes to the industry: on December 9, 2015, the Central District of California dismissed the complaint in Barber v. Nestle USA, a key bellwether case in a new wave of class action litigation related to California’s Transparency in Supply Chains Act. The Barber plaintiffs’ theory was that Nestle had violated California’s panoply of consumer protection statutes by failing to disclose that “some proportion of its cat food products may include seafood [that] was sourced from forced labor.”
Judge Cormac McCarthy disagreed, finding instead that Nestle’s disclosures under the Supply Chains Act were protected under California’s “safe harbor” doctrine. And as the details of the decision make clear, this is no one-off victory: the court’s reasoning sets the blueprint for companies defending against similar suits going forward.
The $1.1 trillion 2016 omnibus spending bill passed by Congress and signed into law by President Obama last week includes many legislative provisions, often called policy “riders,” that will affect a wide array of issues ranging from repealing food labeling laws to allowing children to sled on Capitol Hill. The major policy rider included in the omnibus bill relating to CPSC activities essentially throws a monkey wrench into the agency’s ongoing rulemaking process for Recreational Off-Highway Vehicles (ROVs).
The CPSC planned to issue a final rule for ROVs in 2016 that would address vehicle stability, handling, occupant protection, and other safety concerns. The ROV industry opposed the CPSC’s rulemaking effort based on data gaps it believed belied the proposed rule and the desire for the safety concerns to be addressed through the voluntary standards process.
After lobbying from the ROV industry, Congress included a policy rider (a modification of previously introduced legislation called the RIDE Act) as a part of the 2016 omnibus bill. The statutory language included in the rider prohibits CPSC from finalizing its ROVs rulemaking until the National Academy of Sciences, the National Highway Traffic Safety Administration (NHTSA), and the Department of Defense complete a study to determine: Continue Reading
The 2016 Omnibus Spending Bill recently passed by both houses of Congress ushers in important developments in the food safety, labeling, and nutrition spaces. Following House and Senate votes December 18, it now goes to President Obama for his signature.
The bill includes important provisions for the Food and Drug Administration (FDA) and Department of Agriculture (USDA), as well as for supplemental nutrition programs. Notably, the bill allocates $104.5 million to FDA for implementation of the Food Safety Modernization Act (FSMA), the most sweeping food safety reform in 70 years. For an in-depth discussion of the various food-related funds and other provisions in the bill, as well as our end-of-year food litigation and regulatory outlook, please click here for the most recent ML Strategies/Mintz Levin Food Safety, Labeling, and Nutrition Update.
Over recent weeks, national media outlets have reported extensively on multiple claims from consumers that hoverboards—self-balancing scooters growing immensely in popularity, particularly over the holiday period—have caught fire. Much of the focus of these claims has been related to the overheating of the hoverboards’ lithium ion batteries. In the wake of these reports, major airlines are now starting to prohibit hoverboards from being transported on flights and some retailers, such as Amazon, have stopped selling certain models of the product online.
In response to the ever-increasing publicity and concern expressed over the product, U.S. Consumer Product Safety Commission (CPSC) Chairman Elliot Kaye released a statement about hoverboards, in which he stated, in part, the following: Continue Reading