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“What Do Food Lawyers Do?”

April 7, 2015

If you have ever wondered what food lawyers do, you get to find out tomorrow at New York University. Jason and Michele will discuss the usefulness of food law on a panel discussion on Wednesday, April 8, 6:30-8:30, New York University, Department of Nutrition, Food Studies and Public Health, 411 Lafayette Street, Room 510 – Large Conference Room.

Please RSVPs to Steven Ho at sh93@nyu.edu.

Upcoming Speaking Engagements

March 20, 2015

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  • March 24: Michele will participate in a food law panel, “Legalize Your Food Biz” at the Food Craft Institute in Oakland, California. She’ll be discussing food labeling and marketing laws, alongside of her fellow food law attorneys who take on some of the other aspects of the practice. Tickets available here.
  • April 8: Jason and Michele will both appear on a panel “What Do Food Lawyers Do?” The event will be held at the Department of Nutrition, Food Studies and Public Health, 411 LaFayette Street, Room 510. RSVP to Steven Ho if you would like to attend.

Food Law and Policy Weekly Review, February 23 -27

February 27, 2015

 

  • news-boy1There is a fantastic article in Inc.com on the rise of GT’s Kombucha, the company credited with creating the kombucha product category we know today. They hit a few legal snags along the way, which we will discuss in a blog post next week, but otherwise it’s an inspiring story of a bootstrapped, profitable,  privately and closely held company with a dominant market share.
  • Farmanddairy.com describes the regulatory challenges faced by  nonprofit seed libraries, where farmers, gardeners, and growers can exchange self-pollinating seeds rather than buy them from the catalogue or the hardware store. Laws in several states make no distinction between these small, informal groups and larger commercial seed companies – both are regulated as seed distributors and must comply with inspection and labeling requirements.
  • A California lawmaker is considering a law to include warning labels on soft drinks. The label will state: “contributes to obesity, diabetes, and tooth decay.”
  • KVNO News does a really good job of explaining why Country of Origin Labeling (COOL) is so important for farmers and ranchers. As you might know, in October the World Trade Organization determined that US COOL labeling constituted an unfair restrain on world trade. COOL is important to US farmers, who understand that that consumers will have a natural bias for meat raised domestically. COOL is less important to meat packers, who prefer to fill their orders with meat produced as cheaply and efficiently as possible, no matter where it is raised. Read the whole thing.
  • Fun fact: AMTRAK’s food and beverage service lost an average of $87 Million in the years between 2006 and 2012. A bill before the House will require AMTRAK to eliminate the operating loss within 5 years.
  • Agriview covers the story of a farmer who fled falling prices for commodity milk and started producing artisanal cheeses for the direct market.
  • NPR delves once again into immigration status and farm labor. One farmer interviewed for the piece tacitly admits that he prefers to have the immigration status of his workers remain indeterminate. Farming, he says, is an industry where illegal immigrants can work and remain off of the radar. If they were to become legal, “that pressure is off. Now they can go to the cities and look for construction jobs, or manufacturing jobs” and thus create acute employment problem for him. That’s admirably candid of him, but unfortunate for the laborer.
  • Michele writes about our declining appetite for red meat and the factors leading to our decreasing consumption in Al Jazeera America.
  • Finally, an extended read for the weekend fireside. Washingtonian writes about the spectacular implosion of Serendipity 3 in 2014. It all started with a bad partnership agreement, then some stuff got broken and everybody got mad and someone almost went to jail but then no one ate ice cream anymore and it was sad.

Lessons Learned From Massive Recalls Due To Peanut-Tainted Cumin

February 20, 2015

by Lauren Handel

FDA recently issued a consumer advisory warning people who are highly allergic to peanuts to avoid products containing ground cumin because peanut protein has been detected in some cumin shipments. Since last December, I have noticed many recalls due to undeclared peanuts in products containing cumin, and I have been wondering what’s going on. How could so many companies be affected by peanut protein in cumin? I have been surprised that, until now, FDA has been silent about the issue, and it has not attracted media attention. Thankfully, Allergic Living magazine has investigated and found some answers, although many questions remain.

cuminAccording to Allergic Living’s investigation, there have been two waves of recalls, which have been traced back to two Turkish suppliers of cumin — although the peanut contamination may have originated farther back in the supply chain and the cause of the contamination is unknown. Allergic Living’s investigation found that the largest set of recalls began in December 2014 when it was discovered that an American company, which had been supplied by one of the Turkish companies, sold a peanut-tainted batch of cumin powder to at least 38 other companies. Those 38 companies, in turn, have supplied cumin products to other companies, further expanding the recalls. According to Allergic Living, 580,000 pounds of beef, pork and chicken have been recalled to date. Whole Foods alone has recalled more than 100 products. Allergic Living has a list of the recalls, which is broader than the one included in FDA’s consumer advisory.

This wave of recalls demonstrates how a problem triggered by one ingredient supplier can cause a ripple effect throughout the supply chain. It also reinforces the importance of supplier verification. Few, if any, food companies have control over the production of every ingredient or raw material they use. Rather, manufacturers must rely on their suppliers to provide unadulterated, accurately labeled products that meet the manufacturer’s required specifications. Supplier verification ensures that such reliance is well placed. It should include review of a supplier’s food safety and production practices, periodic audits, and product testing and/or certificates of analysis.

The growing number of cumin-related recalls also shows that companies down the supply chain are likely to bear the costs of a supplier’s problem. Recalls can be very expensive and devastating for smaller companies that can’t afford recall insurance. Recalls also can harm a company’s reputation and cause it to lose customers and, therefore, revenues. This is why companies should have contracts with their ingredient suppliers requiring the supplier to indemnify the buyer for its costs and losses in the event that the supplier’s problem causes a recall. Such contracts also should explain what each party’s roles and responsibilities will be in the event of a recall.

We will continue to follow the news on the cumin-related recalls.

Food Law and Policy Weekly Review, February 9 -13

February 12, 2015
  • Salon.com ran a candid and insightful piece on the financial challenges of starting and operating a small farm. You should read the whole thing – you don’t get too many chances to hear a young farmer talk about how tough it actually is to run these small scale diverse farms everyone seems so excited about. The article provoked some of our thoughts on farm leasing, which we posted to the Food Law Firm Blog yesterday.
  • SrirachaWe were surprised to learn that Sriracha – the original Sriracha – never sought trademark protection for their brand. The owner of the company explains the logic behind this in the LA Times this week, which makes some kind of perverse sense actually: “He believes all the exposure will lead more consumers to taste the original spicy, sweet concoction — which was inspired by flavors from across Southeast Asia and named after a coastal city in Thailand.” Though he seems to be doing quite well, we respectfully disagree considering how relatively cheap it is to seek trademark protection.
  • Chicagomag.com profiles outgoing CEO of McDonald’s, Don Thompson. Thompson will step down as CEO on March 1 after a serious of poor quarterly earnings reports. He seems a decent fellow.
  • QSR.com discusses Chipotle’s recent challenges supplying its restaurants with humanely raised pork. On several occasions during the Carnitas Crisis, we’ve been put-out during our (frequent) visits to Chipotle, having to substitute our first choice of pork with the still delightful chicken or beef alternatives. We therefore remain interested in future stories on Chipotle’s experience with the complexities of hog contracting.
  • A Philadelphia CBS affiliate reports on an FDA study which claims to have found milk in several brands of dark chocolate. Milk is an allergen under the Food Allergen Labeling and Consumer Protection Act, and few of the dark chocolate manufacturers seem to be in compliance with the allergen declarations required by the law.
  • The Environmental Working Group reports on a study indicating that consumers are not “scared away” by a GMO label: “…there was no consistent statistically significant difference in the average level of concern for GMOs expressed by people shown different labels.  That is, the mere presence of the GMO label did not lead to a greater level of concern about GMOs.” Also quoted in the Environmental Working Group Article were two economists with the USDA who hold the opinion that “labels are generally a weak policy tool for changing consumer consumption behavior.” So is labeling an effective way to communicate with consumers or not? In last week’s Review, we linked to a study indicating that affluent consumers are more likely to heed warning labels.
  • Reason.com reports that the U.S. Dietary Guidelines Advisory Committee will no longer list cholesterol among its “nutrients of concern.”

Smart Leases for New and Beginning Farmers

February 12, 2015

by Jason Foscolo

Everyone interested in becoming a farmer should read this piece from Salon entitled “What nobody Told Me About Small Farming: I Can’t Make a Living.” The author, Jaclyn Moyer of South Fork Farm in Placerville, California, shares some important insights into the financial hardships that are a fundamental part of being a new farmer. As you can tell from the title of the article, she is open and honest about the financial difficulties she and her partner face. This kind of honesty is too rare within the new and beginning farmer movement, and Ms. Moyer should be commended for sharing her insight with such candor.

This bit go us thinking about the importance of good negotiating during the agricultural leasing process:

I didn’t say that despite the improvements we made to the land— the hundreds of yards of compost we spread, the thousand dollars we spent annually on cover crop seed to increase soil fertility, every weed pulled — we gained no equity because we didn’t own the land.

The loss of equity is an astute observation that not many tenant farmers realize, and it’s particularly true for South Fork, which is organic certified according to its website. It is more challenging and expensive to increase soil fertility when working within the restrictions imposed by organic certification. These additional costs do indeed amount to a transfer of equity from the tenant to the landholder. When farm tenants assume costs in order to improve soil quality, we generally recommend negotiating either for:

  • A rebate that returns all or some of the cost of those agricultural practices to the tenant; or
  • A long term lease that enables the farmer to recoup the expenses over several seasons.

Soil fertility is not some switch that can be turned on. Often it takes several seasons for farmers to achieve their desired profile. It is, therefore, important that the farmer gets a lease that allows them to stay on the land long enough to reap the benefits of their efforts. For farms that are converted from conventional to organic production, a year-to-year lease is not advisable.

It sounds like an easy case to make for a farmer, but sustainable lease agreements require sustainable landlords. Private landowners may not always appreciate the additional effort and expense incurred by farmers like South Fork. Land trusts, however, have the nonprofit motive to promote conservation and soil-enhancing agriculture, and are ideally placed to execute terms that recognize the capital contribution some farmers make to their soil.

Food Law and Policy Weekly Review, February 2 – 6, 2015

February 9, 2015

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  • Cornell announced a $712,000 in USDA grant for its Northeast Beginning Farmer Program. Part of the the funding will be dedicated to creating training programs and farmer-to-farmer networks for military veterans transitioning into agriculture. Services to be provided by the Farmer Veteran Coalition.
  • For our New York clients and friends, in the farming community, Farm Bureau of New York is pressing the state legislature for an investment tax credit that would reimburse farmers for their expenses on items that are considered an investment in their business, such as construction supplies, machinery and new technology. The credits are intended to support the efforts of young farmers in particular.
  • If you are a food business subject to regulation by the FDA, you might notice an increase in FDA inspections in 2016. That is because the FDA issued a press release outlining its $4.9 billion budget request for FY 2016. The rationale for the request is to implement the Food Safety Modernization Act. According to the press release, a portion of this budget will be earmarked for the hiring and training of new inspectors.
  • In 2015, certain restaurants will have to comply with FDA guidelines on nutrition labeling. A recent study has indicated that affluent customers are more likely to utilize the kind of information required by the regulations.
  • Natural Products Insider advises supplement manufacturers to have a robust game plan to defend against class-action lawsuits. They recommend manufacturers perform label review by an experienced attorney as part of the risk mitigation strategy. Good advice for food manufacturers as well, and label review is one of our core services.
  • Breyer Ice Cream announced it will no longer be using milk from cows given rBST, recombinant Bovine Growth hormone.
  • D.C. Circuit Court of Appeals agreed with a previous finding of the Federal Trade Commission that POM Wonderful made deceptive claims in its advertising.

Circle Up: Top 4 Legal Issues for Food Businesses

February 5, 2015

Lauren and Michele put on a great show with the help of our new friends at CircleUp.com. Our team covered the following topics relevant to those seeking to invest in the food industry:

  1. Unlawful or risky marketing claims
  2. Marketing opportunities, such as key product certifications
  3. Managing product liability risks
  4. Unique regulatory compliance and liability concerns for innovative foods

View the full webinar here.

Food Law Bits and Pieces, January 26 – 29, 2015

January 29, 2015

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  • The New Yorker has an excellent article highlighting gaps in food safety regulation and enforcement powers — gaps that continue to create cases for attorney (and adjunct professor in the University of Arkansas School of Law’s LLM Program in Agricultural and Food Law) Bill Marler who represents victims of foodborne illnesses.
  • Possibly addressing the gaps discussed in The New Yorker article, new legislation has been introduced in Congress to create a single federal food safety agency, as Food Safety News reports.
  • Food Safety News also reports on Wyoming’s Food Freedom Bill, which would exempt transactions directly between food producers and “informed end consumers” from state regulation and provides that such consumers assume the risk of injury from consuming the food.
  • The American Academy of Pediatrics released a study on Physical Activity Calorie Equivalent (PACE) labeling on menu items to encourage parents to make smarter choices when choosing food for their children at restaurants, which prompted a quick blog post from us.
  • The Columbia Missourian has a great story on Cody Waters, an Iraq War veteran now making the transition into farming.
  • The Wall Street Journal reports on rising egg prices in California, attributing the rise to changes to the new welfare standards for egg laying hens that took effect this year.
  • Don Thompson, CEO of McDonald’s, well step down from his post effective March 1. Recall that last November, Fortune Magazine ran a fantastic piece on the company’s recent decline and described a couple of Thompson’s key initiatives intended to get McDonald’s back on its feet. Those initiatives included the ability to use an in-store kiosk to build your own burger, or hiring Mythbusters guy Grant Imahara to tour a meat processing facility with a camera crew. We noted at the time that it seemed as though some of the better criticisms in the Fortune piece came from “former employees” of the company, who said things like  “The problem is the truth. They are a mass feeder” and “McDonald’s has forgotten over the past decade that the consumer makes emotional decisions.”
  • A federal bill introduced to create a single federal food safety agency, sponsored by Senator Richard Durbin and Congresswoman Rose DeLauro. The bill is called the Safe Food Act of 2015.
  • Jdsupra.com reports on the difficulties plaintiffs are having in pursuit of their “all natural” claims litigation. Read the whole thing, but if the details are a bit too geeky for you, the short of it is, “all natural” claims cases are not easy money for plaintiff’s law firms.

Physical Activity Calorie Equivalent Labeling

January 28, 2015

by Jason Foscolo

Bike RideThe American Academy of Pediatrics published a study of physical activity calorie equivalent labeling (PACE) as a possible strategy to encourage parents to order meals with fewer calories and promote physical activity. PACE labeling would show for example that 1 burger equals so many minutes on a treadmill. Parents surveyed reported that they were more likely to encourage their kids to exercise if menus had PACE labeling for each item.  They were also likely to order fewer calories, too.

I’d propose that in addition, the label also calculate how long it would take to burn-off the food if the kid were to remain absolutely motionless, which seems to be the natural state of kids these days. I’m not being cynical – the comparison between active and passive calorie expenditure would make poor menu choices even more stark when compounded by other lifestyle choices.