Recently, the Office of Environmental Health Hazard Assessment (OEHHA) proposed to amend the Proposition 65 regulations related to short form warnings. Proposition 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, requires businesses to provide “clear and reasonable” warnings before knowingly and intentionally exposing Californians to listed chemicals. These warnings are required to appear on a wide range of products, including foods. Continue Reading OEHHA Proposes Changes to Prop 65 Short Form Warnings
On January 21, 2021 at 3:00 PM in Eastern Time, the Centers for Disease Control and Prevention (CDC) will host a joint webinar to provide updates on COVID-19 vaccine implementation for food and agriculture essential workers. The webinar will also cover vaccine safety and confidence as well as recommendations for vaccine prioritization.
The panelists for the webinar include:
- Janell Routh—Medical Officer, COVID-19 Vaccine Task Force, CDC
- Michelle Colby—Co-Chair Government Coordinating Council, Food and Agriculture Sector, U.S. Department of Agriculture (USDA)
- LeeAnne Jackson—Co-Chair Government Coordinating Council, Food and Agriculture Sector, Food and Drug Administration (FDA)
- Caitlin Boon—Associate Commissioner for Food Policy and Response, FDA
- Kis Robertson Hale—Deputy Assistant Administrator, Office of Public Health Science, USDA Food Safety and Inspection Service
If you are interested in attending the webinar, you can pre-register here. Pre-registration is required to attend the webinar. Please submit questions in advance by emailing email@example.com. Additional resources and information on COVID-19 prevention and vaccination in the food and agricultural industry can be found here.
We will continue to monitor developments related to the COVID-19 outbreak and its impact on the food and agricultural sector. Should you have any questions regarding this alert, contact your Husch Blackwell attorney Seth Mailhot, Ryan Glenn, or Emily Lyons.
In December 2020, the US Congress voted to pass, and the President signed, the long-awaited Craft Beverage Modernization and Tax Reform Act (“CMBTRA”), making permanent the reduction in the federal excise tax (“FET”) rate paid by distillers.
The CMBTRA was originally signed into law on January 1, 2018 as a two-year tax break for producers, lowering the FET rate from $13.50 to $2.70 per proof gallon on the first 100,000 proof gallons. This tax break meant that many of the smaller and family-run producers could start investing in their businesses, buying equipment they previously couldn’t afford, taking a paycheck, and hiring additional staff.
Many distillers thought the bill was to be made permanent in 2019. Instead, Congress passed a one-year extension, maintaining the reduced FET rate, but leaving many distillers uncertain about the long-term permanence of the law. Without a permanent passage, the tax rate on spirits producers would increase by 400%.
Distilleries have lost almost 40% of their workforce due to pandemic. A significant tax hike in the current economic conditions could have been disastrous for the industry. The now permanent reduction in the FET rate will help producers survive the pandemic, and continue to create jobs and fast track their growth in the future.
On December 29, 2020, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) published a final rule in the Federal register that amends TTB’s regulations that govern wine and distilled spirits. Specially, the final rule adds seven new standards of fill for wine and distilled spirits. The additional container sizes are:
|355 mL||1.8 L|
|250 mL||900 mL|
|200 mL||720 mL|
The final rule comes after TTB published Notices 182 and 183 on July 1, 2019, which proposed to eliminate all but a minimum standard of fill for wine containers and eliminate all but minimum and maximum standards of fill for distilled spirits, respectively. Both notices also sought comments on alternatives to eliminating standards of fill, included authorizing some or all of the petitioned-for sizes discussed in the notices.
After reviewing the almost 2,000 comments, TTB decided not to eliminate the standard of fill for wine and distilled spirits. Rather, TTB is adding the most petitioned-for sizes. These additions, TTB believes, will result in many of the same benefits intended with eliminating the standard of fill, including providing bottlers with more flexibility, facilitating the movement of goods in domestic and international commerce, and providing additional purchasing option to consumers without causing disruption or confusion.
On December 16, 2020, the U.S. Food and Drug Administration (“FDA”) issued a corporate Warning Letter to Whole Foods Market (“Whole Foods”) following 32 recalls Whole Foods conducted over an approximate one year period for undeclared allergen(s). FDA reported that investigators found similar patterns of recalls in previous years. According to a Constituent Update accompanying the Warning Letter, FDA has sent eight Warning Letters to companies that have manufactured and distributed foods with undeclared allergens in 2020.
This Warning Letter is significant because it is the first time that FDA has issued a Warning Letter to a retailer for the labeling of allergens. According to FDA, its action was warranted because the company allegedly “engaged in a pattern of receiving and offering for sale misbranded food products” that contained undeclared allergens over multiple years. While retail establishments are excluded from certain requirements under the Federal Food Drug and Cosmetic Act, retailers have a responsibility to ensure that food labeled within a store contain accurate allergen declarations as well as have a responsibility to ensure packaged foods under the retailer’s brand also have accurate allergen declarations. The Warning Letter highlights that a retailer is “responsible for investigating and determining the causes of the violations . . . and for preventing their recurrence or the occurrence of other violations. It is [a retailer’s] responsibility to ensure [the] firm complies with all requirements of federal law and implementing regulations” including when products are relabeled in store.
Over half of the FDA’s 338 recalls in 2020 were associated with allergen labeling issues, according to an analysis by the Food Industry Association. The FDA considers foods that contain undisclosed allergens as adulterated, and has the authority to take enforcement actions with respect to such products – unless the offending company voluntarily recalls those products first. With this Warning Letter, FDA is suggesting that food retailers have the responsibility to take proactive steps to ensure food is appropriately labeled for allergens when consumer labeling occurs in store. Continue Reading FDA Reiterates Importance of Allergen Labeling by Issuing Warning Letter Following Repeated Recalls
For the past 45 years, California’s Agricultural Labor Relations Board (ALRB) has promulgated a regulation requiring producers of agricultural products to give union organizers access to their property. Access is limited to four 30-day periods per calendar year. Organizers can access the property one hour before start of work, one hour after end of work, and one hour over the lunch break. In 1976, the California Supreme Court held that the regulation did not constitute a taking of producers’ property.
The United States Supreme Court recently granted a petition for certiorari in a case challenging the ALRB’s regulation. In 2016, two producers sued the ALRB, primarily on the theory that the regulation established an easement over their property for the benefit of union organizers and hence constituted a per se physical taking, requiring compensation. The District Court dismissed the complaint and a divided panel of the Ninth Circuit affirmed. Over a strong dissent by eight judges, the Ninth Circuit denied rehearing en banc.
The growers argued that the regulation was a per se taking because it allowed a permanent physical invasion of their property. The panel opinion rejected that theory, because the alleged invasion was not “permanent and continuous.” Rather, it was limited to three hours a day for not more than 120 days per year. The opinion also held that the right to exclude others was merely one strand in the bundle of property rights. Continue Reading Ag Producers Challenge Union Access To Property
On December 29, 2020, the U.S. Food and Drug Administration (FDA) announced in a Federal Register notice the 2021 fee schedule for its Over-the-Counter Monograph Drug User Fee Program. That user fee program was an addition made in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and authorized FDA to assess and collect user fees from qualifying manufacturers of OTC monograph drugs and submitters of OTC monograph order requests.
These user fees concern over-the-counter (OTC) monograph drugs, which are nonprescription drugs without an approved new drug application which are governed by the provisions of section 505G of the Federal Food Drug and Cosmetic Act (21 U.S.C. 355h). Under the new fee schedule, FDA will assess a fee for certain facilities registered with FDA and for the submission of an OTC monograph order request (OMOR). An OMOR is an industry request for an administrative order to add, remove, or change an OTC drug monograph, which is submitted under section 505G(b)(5) of the Federal Food Drug and Cosmetic Act (21 U.S.C. § 355h(b)(5)).
The announcement took some by surprise, particularly those in the craft distilling industry that shifted production to FDA regulated hand sanitizers, a type of OTC monograph drug, during the COVID-19 public health emergency. By December 31, 2020, the Department of Health and Human Services (HHS) took action over FDA’s fee schedule. In a post on Twitter, the HHS Chief of Staff, citing the small businesses who stepped up to provide hand sanitizer in the face of the pandemic, announced that HHS had “directed FDA to cease enforcement of these arbitrary, surprise user fees.” HHS Office of Public Affairs (Dec. 31, 2020), at https://twitter.com/SpoxHHS/status/1344782160084037639. Continue Reading Holiday Confusion for the Over-the-Counter Drug Industry: FDA Announces OTC Fee Schedule That HHS Quickly Withdraws
A recent decision of the Trademark Trial and Appeal Board (“TTAB”) highlights the overlap between trademark law and food regulatory law as well as the United States’ and Europe’s different approaches to Geographic Indications (“GIs”). GIs identify the particular location where an agricultural product (such as cheese, wine, or spirits) originates.
Interprofession du Gruyère, a Swiss association, and Syndicat Interprofessionnel du Gruyère, a French association, jointly filed a U.S. trademark application at the U.S. Patent and Trademark Office (“USPTO”) on September 17, 2015 to register the term GRUYERE as a certification mark for cheese. The Swiss association already owned Registration Number 4,398,395 for the certification mark LE GRUYERE SWITZERLAND AOC and Design. In the new application, the French and Swiss associations sought to register the term GRUYERE as a word mark, meaning that they made no claim to a particular stylization or design. In effect, if the USPTO granted registration of the French and Swiss associations’ application, the associations could prevent others in the U.S. from using the term “gruyere” on cheese made outside of the Gruyere region of Switzerland and France.
The U.S. Dairy Export Council and several other entities filed to oppose the associations’ application on the basis that the term “gruyere” is generic for a style of cheese in the U.S. (In full disclosure, Emily was employed during part of this proceeding at the International Dairy Foods Association, another opposer in the case, and assisted it in this proceeding before joining Husch Blackwell.) Most of the other entities ultimately withdrew their oppositions or the TTAB dismissed their claims. Continue Reading The Trademark Trial and Appeal Board Rules U.S. Cheesemakers Can “Say, Gruyere!”
On November 11, 2020, we blogged about Oklahoma’s meatless meat statute. Like similar statutes in other states, the primary purpose of the Oklahoma law was to protect traditional producer of meat and poultry from competition from plant- and cell-based producers of meatless meat. Unlike other states, however, Oklahoma did not attempt to ban the use of the word “meat,” or other descriptors such as “bacon” or “burger.” Oklahoma merely required producers of meatless meat to proclaim its origins in labeling of the same size and font as the product’s name.
On November 19, 2020, the District Court denied plaintiffs’ motion for a preliminary injunction. The Court held that the governing case was Zauderer v. Office of Disciplinary Counsel, which allows the government to require disclosure of purely factual and uncontroversial information, so long as it is reasonably related to a substantial government interest and not unduly burdensome. Continue Reading Meatless Meat Update
On October 19, 2019, and December 4, 2019, we blogged about the North American Meat Institute’s challenge to California Proposition 12. Proposition 12 prohibits the sale in California of pork or veal derived from animals confined in conditions that do not comply with the strict California standards. It builds on the previous ban on the sale of eggs discussed in Association des Eleveurs de Canards et d’Oies du Quebec v. Harris, 870 F.3d 1140 (9th Cir. 2017) (the foie gras case), about which we blogged on May 29, 2018.
As we reported on December 4, 2019, the District Court denied NAMI’s motion for preliminary injunction. On October 15, 2020, the Ninth Circuit affirmed in a short, per curiam opinion.
The Ninth Circuit panel held that NAMI had presented no evidence that the purpose of the statute was to discriminate against out-of-state businesses. It also held that Proposition 12 does not have a discriminatory effect because “it treats in-state meat producers the same as out-of-state producers.” Continue Reading Update on California Proposition 12