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Food Law Archive

FDA’s Voluntary Qualified Importer Program

November 10, 2016

imgres-2The FDA Food Safety Modernization Act (FSMA) (Pub. L. 111-353) enables the Food and Drug Administration (FDA or the Agency) to better protect public health by helping to ensure the safety and security of the food supply.

This guidance document describes FDA’s policy regarding participation in FDA’s Voluntary Qualified Importer Program (VQIP) by importers of food for humans or animals. This document provides guidance on:

  • The benefits VQIP importers can expect to receive;
  • The eligibility criteria for VQIP participation;
  • Instructions for completing a VQIP application;
  • Conditions that may result in revocation of participation in VQIP; and
  • Criteria for VQIP reinstatement following revocation.

Important reading for anyone in the food industry.

What We Are Reading This Week

January 8, 2015

 

  • NewsboyIt’s a busy week for food law in the courts. A federal judge heard arguments in the lawsuit challenging Vermont’s GMO labeling law. And a judge in California overturned that state’s ban on foie gras.
  •  National Law Review has a summary of the FDA’s four Proposed Supplemental Rules that revise the agency’s prior proposed rules that implement the Food Safety and Modernization Act (FSMA). The supplemental rules were proposed in September, but an article like this is always timely.
  • Baylen Linnekin’s latest Reason article on the 2014 year-end review of important food law and policy issues.
  • Food Safety News FDA Warning Letter Roundup, with a couple of fish businesses leading the pack.
  • The New York Times had an article last week about loopholes in the regulation of GMOs.
  • The Atlantic’s article on the decriminalization of marijuana and the resulting conflicts between federal and state law.
  • A majority of American’s want more restaurant menu labeling.
  • Craft brewers are running out of trademark-able names for their beers.
  • Texas company recalls 35,000 pounds of Australian lamb because it was not presented to USDA FSIS for inspection at the port of entry.
  • Food producer voluntarily recalls chili mix because the label did not disclose an allergenic ingredient. The allergen was inadvertently included in the product because an ingredient supplier did not disclose the use of a peanut protein in its spice mix. It’s indemnification time.
  • Via the New York Times, ambitious start-ups are filling gaps in the local food economy for functions like logistics, web brokers, and food hubs.
  • Oregon is beginning to draft its hemp farming regulations.
  • A lengthy one for the weekend, a story of a San Joaquin Valley farm that is running out of water, via the California Sunday Magazine.
  • A re-reading of Food Law & Policy: The Fertile Field’s Origins and First Decade because it’s awesome.

Legal Tools for Food Hubs, Part 2: Contracts Are Not Evil

April 10, 2014

by Lauren Handel

Earlier this week, I wrote about intellectual property as a valuable legal tool for food hubs and all food businesses.  This second installment on legal tools for food hubs is about contracts. In particular, supply and sales agreements can be important tools for risk management and to take advantage of special protections afforded to produce sellers.

First, I feel the need to dispel some misconceptions about contracts. Contracts are critically important legal tools for food businesses. Yet, so many values-based businesses seem to feel that contracting is a hostile act. But legal contracts are not inherently antagonistic, unfair, or devoid of values. To the contrary, a contract should be the foundation for a cooperative, mutually beneficial relationship. And a contract can be instilled with the parties’ values — for example, by requiring that suppliers use sustainable practices, raise animals humanely, and pay workers fairly. Parties to a contract have enormous flexibility to define the terms of their relationship and transactions. However, if parties do not spell out their agreement in a contract, the law will apply default rules, which may not be consistent with the parties’ intent. 

Contracts are an essential part of an overall risk management strategy. Food can be a risky business. And every seller in the supply chain — from the farmer or manufacturer to the distributor to the retailer — is potentially on the hook if a consumer gets sick from tainted food. Therefore, food hubs, or anyone selling food produced by someone else, should use their supply contracts to ensure that producers and processors use safe practices, that the buyer will be indemnified for harms it did not cause, and that the suppliers have sufficient insurance coverage. With regard to insurance, buyers should require that their suppliers name them as additionally insured on the suppliers’ general liability policy which must include product liability coverage. Contracts also can address what will happen in the event of a product recall by defining the parties’ roles and their responsibilities for the costs of the recall.

In addition, food hubs should use their sales contracts and invoices to take advantage of the special protections afforded to produce sellers under the Perishable Agricultural Commodities Act (PACA). PACA applies to dealers, brokers and commission merchants of fresh or frozen produce who, on any given day, buy/sell/broker the sale of at least 2,000 pounds of produce. The law does not apply to retailers until they sell at least $230,000 worth of produce in a calendar year. In general, food hubs are subject to PACA and, therefore, required to be licensed by the US Department of Agriculture.

PACA provides some extraordinary protections for produce sellers, including food hubs, provided that they take steps to preserve their rights. PACA requires produce sellers to be paid promptly, which means within 10 days unless the parties agree in writing to a longer term, not exceeding 30 days, before the transaction takes place. The law also creates a trust for the benefit of unpaid produce sellers, by which the buyer must hold in trust all produce in the buyer’s possession, all of the buyer’s inventory of goods derived from produce, and any proceeds the buyer receives from the sale of produce until full payment is made to the seller. These rights can be lost, however, if the seller does not notify the buyer of its intent to preserve its rights under PACA. If the seller is a PACA licensee, such notice may be given in the invoice using particular language specified in USDA regulations.

It is not possible to discuss here all of the contract tools available to food hubs and other food businesses. Feel free to contact us at (888) 908-4959 or info@foodlawfirm.com to discuss your business’s contracting concerns.

Proposed FDA Rule Will Revamp Nutrition Labels

April 4, 2014

by Gabriella Agostinelli

For the first time in two decades, the FDA has proposed significant changes to nutrition labeling. The agency’s proposed nutrition labels will affect all packaged foods except meat, poultry and processed egg products, which are regulated by the Department of Agriculture rather than the FDA.

 

Proposed Label

Proposed Label

The proposed changes include:

  • Serving sizes will be updated.

Serving sizes would more accurately reflect the amounts people actually eat, rather than what they should eat. The proposal modifies the serving size in about 17 percent of the 150 categories of packaged food. For example, a 20 oz. bottle of soda would constitute one serving, rather than the 2.5 servings currently listed. Ice cream servings would increase from half-cup to a more realistic one-cup serving.

  •  “Added sugars” will be incorporated into the labels.

After the 2010 Dietary Guidelines for Americans stated that intake of added sugar is too high in the U.S. population and should be reduced, the FDA has included a separate line on the label to alert consumers of any added sugars.

  • Calories from fat will be removed.

Studies now show that the type of fat matters more to our health than the number of calories from fat. Labels for unsaturated, saturated, trans and total fat will remain.

  •  Daily values for nutrients will be revised.

To better reflect current nutrition knowledge, several daily value estimates will change, including sodium and fiber.  For example, the agency may reduce the daily recommendation on sodium from 2,400 mgs to 2,300. 

  • Vitamin emphasis will shift.

Vitamins A and C will be replaced by Vitamin D and potassium, as many Americans are not getting enough of these important nutrients.

  • Key nutrition data will be highlighted.

The proposed label format emphasizes elements such as calories, serving sizes and Percent Daily Value, as they are vital in addressing current public health problems like obesity and heart disease.

  • For larger packages, a new dual column format would be required.

The agency has proposed “dual column” labels to indicate both “per serving” and “per package” calorie and nutrition information for larger packages that could be consumed in one sitting or multiple sittings.

 So far, reviews have been mixed regarding the value of these changes. Critics suggest that only a small portion of Americans actually pay attention to the proposed labels, which would cost the food industry an estimated $2 billion. Supporters of the proposed rule maintain that the changes will improve consumer awareness, incentivize producers to make their food products more healthful, and lead to smarter food purchasing decisions by consumers.

The proposal is open to public comment until June 2, 2014, and months will pass before the final rule is announced. Once a rule is finalized, food companies will have two years to put the changes into effect.

California’s Prop 37, GMO Labeling, Part 3

September 27, 2012

Lauren Handel is back today with further insight into the possible legal objections to California’s Proposition 37, the popular referendum on mandatory GMO labeling of food products. Once again, she puts policy and science debates to the side and examines just how challenging it will be for Prop 37 to successfully navigate our constellation of existing food laws. 

In addition to the First Amendment challenges Prop 37 that we covered yesterday, the opponents of the measure will seek to invalidate the law on the grounds that it is preempted by federal food labeling requirements.  Preemption is the constitutional principle that federal law trumps state law.  State laws may not conflict with federal laws.  Specifically with regard to food labeling, the Food, Drug, and Cosmetic Act (“FDCA”), Federal Meat Inspection Act (“FMIA”) and the Poultry Products Inspection Act (“PPIA”) all contain provisions expressly stating that they preempt conflicting state laws.

Opponents of Prop 37 have a strong argument that the law would be preempted by FMIA and PPIA to the extent it would regulate the labeling of meat and poultry products.  That is because FMIA and PPIA prohibit state labeling requirements for meat and poultry products  “in addition to, or different than” federal requirements.  Prop 37 would impose requirements “in addition to [and] different” from federal requirements because it would require labeling of genetically-engineered meat or poultry products whereas no such requirement exists in federal law.  In addition, Prop 37 would impose different requirements in direct conflict with federal law in that it would prohibit “natural” claims on minimally-processed meat and poultry products that would be permitted—and could even be pre-approved by USDA—under federal law.

In contrast, Prop 37’s requirements for labeling foods within the ambit of FDCA (nearly everything other than meat and poultry) probably are not preempted.  FDCA’s preemption language prohibits state labeling requirements that are “not identical to” federal requirements.  In interpreting this provision, courts have held that states may impose labeling requirements addressing issues not regulated by FDA.  Because FDA has not regulated the use of “natural” claims, many courts have held that states are free to do so.  The same analysis should apply to regulation of genetically-engineered food labels.  Because FDA policy does not require nor prohibit disclosures that foods are genetically engineered, Prop 37’s disclosure requirement (with respect to foods other than meat and poultry) should not be preempted.

Nevertheless, challengers may argue that Prop 37 is preempted because it would conflict with FDA ingredient labeling requirements.  A  recent decision of a federal court in California held that state requirements to disclose of genetically-engineered ingredients are preempted by FDA’s exhaustive regulation of ingredient listings.  That decision, however, does not apply to Prop 37 because Prop 37 would not require manufacturers to identify ingredients that were genetically engineered.  Rather, Prop 37 would require only a statement on the front or back of a package stating that a food is genetically engineered or has been produced with genetic engineering.

A somewhat better argument for preemption might be that, in requiring manufacturers to identify products as genetically engineered, Prop 37 would cause them to violate FDCA’s prohibition against making misleading claims.  The argument would be that a “genetically-engineered” label would mislead consumers into believing that the food is materially different than (and inferior to) a comparable product containing traditional ingredients.  While this argument may have some appeal in light of FDA’s position that genetically-engineered foods are no different than their traditional counterparts, FDA has stated (albeit in a draft guidance document) that simple, factual statements of the type Prop 37 would require—that a food is genetically engineered or contains genetically-engineered ingredients—are not likely to be misleading.  Although FDA’s guidance on this issue would not be binding on a court, it is some evidence that the agency would not consider the disclosure claims required by Prop 37 to run afoul of FDCA’s prohibitions against misleading claims.

–by Lauren Handel

Food Law Advice for Restaurants That Source Their Own Ingedients

September 12, 2012

My restaurant clients always tell me how maddening and insufferable it is to be asked repeatedly “Is it local?” by their patrons. Though they appreciate the curiosity and the enthusiasm of their customers, owners are already very, very aware of the pressure to do their own sourcing. The Nation’s Restaurant News has some excellent guidance for restaurants looking to make a connection with a local source in “Five Steps to Local Sourcing For Restaurants”.

A few suggestions of my own from the Food Law toolkit:

1. Risk management. If a restaurant plans to do its own purveying, it has to assume the food safety management role of a broad line distributor like Sysco or Chef’s Warehouse. The food safety geeks at the big distributors always have a thermometer handy, they periodically inspect their producers’ facilities, and they will not do business with a producer who does not agree to assume most of the food safety risks inherent in the production process. Any restauranteur who wants to source locally has to be equally scrupulous. The food safety on some farms is superb, but it is not always the case. It is possible to screw up something like spinach and grievously injure a bunch of people without regard to farm size. Strict liability, a food product liability doctrine I rhapsodize about often, places liability for the injured customer on the entire food chain. That means everybody in the supply chain has the obligation, both moral and legal, to police each other.

A restauranteur might want to read a few good books on food production safety, or contact a local agricultural extension office for guidance on good agricultural practices. That should arm the restauranteur with enough information to ask the farmer the tough questions (Do the chickens have free reign of the area where the snap peas are grown? Do farm laborers have access to field sanitation? Why is there a cat running around the creamery where the artisanal cheese is made?) Conduct a site visit of the place where you source. If you see puddles of motor oil underneath the old tractor adjacent to the melons, move on to another source. Do not deal with amateurs – they are more likely than professionals to cause harm somewhere in the food chain. If you don’t get the impression that safety is a priority, or if they give you some mumbo jumbo that food safety is only a problem on “conventional” farms, the person is deluded and you should move on.

2. Contracts. If you truly want to support local producers, offer to pay for the crop before it is put in the ground. The truly professional farmers hate economic risk and will commit their time and dirt to grow for you if you make a legally enforceable promise to buy before the season begins. This is done all the time in the agricultural industry, and this practice is starting to trickle down to the small, local farms. Of course, a contract can and should include criteria for quality control, condition of goods upon delivery, and time of delivery. If the farmer fails to deliver, the restaurant can always go right back to the broad-line distributor, so the risk to the menu and the restaurant is minimal in the event of default.

 

Food Law and Why Practice Area Is Destined to Grow

August 22, 2012

As I proudly relayed earlier today, some colleagues of mine are putting together a Continuing Legal Education Course at Pace University School of Law in October. That is a good sign that the practice area we happy few call “Food Law” is growing and gaining legitimacy. Via Baylen Linnekin of Keep Food Legal and Reason, we have some firm indication that if the public has its way, more food laws and regulations will be headed to a specialized law office near you. Apparently, the public loves regulation in the food industry. I say “public” as in “general public”, regardless of political affiliation.

In his latest piece for reason, Baylen conducts an interview with Jayson Lusk, agricultural economist at Oklahoma State University and recent author of a recent  study, The Political Ideology of Food. Respondents to Lusk’s survey were most in favor of additional government action related to food safety, but quality, public health, and agricultural policies such as subsidies were other predominant concerns. Lusk found that this was true even among groups ideologically predisposed to disfavor regulation, such as libertarians. Key quote from Baylen’s  interview:

…libertarians, in fact, prefers less regulation on farm policy issues and less regulation on what I call “food quality and quality” issues. It is only “food safety” issues where the libertarians prefer more regulation. When I look specifically at what most of them said they preferred, it tended to relate to a desire to have more mandatory labeling of foods according to origin of production and use of genetic modification, cloning, irradiation, or nanotechnology. I can only speculate about why such preferences were expressed among libertarians, but perhaps it relates to a belief that labels promote “truth in advertising” or provide information needed to avoid deception in trade among food sellers and buyers.

We have a contentious political culture – no doubt –  but I find it interesting that despite the divisions the one thing everyone can agree on is more food regulation. I applaud the efforts of groups like Keep Food Legal, which strives for a regulatory climate more favorable to entrepreneurs and smaller scale producers. But if this study is accurate, or if the public’s inclination is indicative of a future trend, we could see more laws and regulations in the food industry that will occupy us Food Lawyers.

Food Law Has A CLE

August 22, 2012

I’m as pleased as artisanal punch to announce that I will be a panelist on an upcoming CLE hosted by Pace University School of Law entitled “A Survey of Local Food Law”. I’ll be appearing alongside fellow food law professionals Cari Rincker and Judith LaBelle discussing raw milk, labeling regulations, food product liability, cottage food laws, environmental regulations, and direct farm marketing. Continuing Legal Education Courses are usually attorney-only, but this one is open to the public – we are designing the course to educate our legal peers, but also to inform the general public about a field of law that affects them every day in innumerable ways. So if you are an attorney looking for guidance on how to service a new breed of food entrepreneur, you should attend. If you are a concerned or conscientious eater, you too will learn about the laws that govern the production of the foods you eat.

The details you need to get yourself some education:

Location:  Pace Law School

78 North Broadway

White Plains, NY 10603

(914) 422-4205

Date/Time: October 29, 2012, 6:00 to 8:30pm

CLE Credits: 3.0 (50 min. states), 2.5 (60 min. states)

Price: Pace Law School Alumni- $100

Non-Alumni- $125

Government Lawyers – $50

General Public (non attorneys) – $15

Pace Law School Students – Free

Food Labeling Compliance: Why Due Diligence Matters

July 30, 2012

Food manufacturers need to be vert careful about the words they use on their products. Last week the New York Times ran a story on a class action lawsuit initiated by a pair of California consumers against General Mills, who are seeking to force the manufacturer to justify some of its marketing and labeling claims. The civil complaint, underwritten by consumer advocacy group Center For Science in the Public Interest, takes issue with General Mills’ repetitive use of the phrase “natural” when marketing a product with ingredients like high fructose corn syrup, maltodextrin, and high maltose corn syrup.

On the company’s website, Nature Valley’s publicity stills are indeed full of affluent, healthy looking people hiking and mountain-biking through Thomas Cole paintings. I doubt hikers go to such extremes to eat a sugary bar of dried oatmeal. The disingenuous use of pastoral imagery in food marketing is a seemingly ancient and pervasive practice. So how much BS like this can a food producer get away with? It is actually a much finer line than one would think.

A vast amount of language is regulated in food marketing. Just to name a few examples, breed-specific claims regulate the meat industry, health claims such as “milk reduces the risk of osteoporosis” are regulated by the FDA, and the National Organic Program regulates the use of not just the organic seal of the USDA, but also of the use of the word “organic” standing alone. Almost any special distinguishing characteristics of a food label require some level of compliance review.

Third party lawsuits by public interest groups are not the only thing food producers need to worry about, either. Under the new Food Safety Modernization Act, the FDA has the power to mandate product recalls for mislabeling and misbranding, not just for food safety concerns. Any institutional buyer, like a grocery chain or major distributor, will as a condition of purchase require the manufacturer to indemnify and hold it harmless in the event of a product recall for reason of mislabeling or misbranding.

There are thus a multitude of reasons why a label should be designed to be beyond reproach. Any errors, or even any unjustifiable “puffery” (term of art for slick marketing) can be a source of serious financial loss. The label is how producers interface with their buyers, and distinguishing themselves from competitors begins there. By all means, they are free to pile on the characteristics that make their product unique, they just need to be aware that there are limits to what terms can be used in product marketing – unanticipated compliance costs can come from a variety of directions.

 

Food Law Blog, Now With More Blogging!

December 5, 2011

If you liked me before, now there is twice as much of me to go around. Beginning this Friday, I will be the designated Food Law Geek at Farm Dreams, a new social networking site for small-scale farmers and alternative agriculturalists. The site launched last Friday, but it already has close to 1000 members. My first post appears this Friday, which will be my recurring slot. I do not plan on re-using posts from the LLC, so my Farm Dreams stuff will be fresh. Sign up so you don’t miss a beat.