Food and Beverage Law Update: December 2018
Regulation
FDA-USDA Propose Joint Regulatory Framework for Cell-Grown Meat
By Joel E. Roberson, Sara M. Klock and Jennifer M. Nowak
On Nov. 16, 2018, the U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) issued a joint statement announcing the agencies' joint regulatory framework for cell-cultured food products derived from livestock and poultry. The need for collaboration between the two agencies with regard to animal cell-cultured food technology – which the agencies have described as "the controlled growth of animal cells from livestock, poultry, fish or other animals, their subsequent differentiation into various cell types, and their collection and processing into food" – arises from the overlap of USDA's statutory mandate to regulate meat and poultry products and FDA's statutory responsibility for the safety of the national food supply, as well as FDA's experience in regulating cell-based technology.
This announcement follows a Federal Register Notice issued on Sept. 13, 2018 and a joint public meeting held on Oct. 23-24, 2018, by the two agencies, where FDA and USDA discussed the "potential hazards, oversight considerations, and labeling of cell cultured food products derived from livestock and poultry tissue" with stakeholders and the public. Under the framework, FDA will be primarily responsible for overseeing cell collection, cell banks, and cell growth and differentiation," while USDA will be primarily responsible for regulating the production and labeling of food products derived from these cells. The agencies anticipate that the transition of oversight from FDA to USDA will occur "during the cell harvest stage."
FDA and USDA are actively reviewing the details of the framework, including collaboration and information sharing. FDA and USDA do not anticipate enacting legislation to conduct their respective roles, as the agencies believe they "have the statutory authority necessary to appropriately regulate cell-cultured food products derived from livestock and poultry." In order to allow for consideration of the joint statement issued on Nov. 16, 2018 and stakeholder feedback from the public meeting held on Oct. 23-24, 2018, the agencies have extended the original public comment period associated with the public meeting by one month, until Dec. 26, 2018.
ADA
Restaurant Websites Under ADA Scrutiny
By Philip J. Catanzano
In Haynes v. Dunkin' Donuts LLC, No. 18-10373, 2018 WL 3634720 (11th Cir. July 31, 2018), a blind plaintiff sued Dunkin' Donuts, alleging that its public-facing website, www.dunkindonuts.com, was not compatible with "his, or any, screen reading software." The parties agreed that Dunkin' Donuts is a "public accommodation," subject to Title III of the Americans with Disabilities Act (ADA), 42 U.S.C. §1218 et. seq. The plaintiff's legal theory was that, as a public accommodation, Dunkin' Donuts failed to maintain an accessible website. The district court dismissed the claim because the plaintiff had "failed to allege a nexus between the barriers to access that he faced on the website and his inability to access goods and services" in the physical stores. On appeal, the Eleventh Circuit reversed the district court and remanded for further proceedings, holding that the ADA's prohibition on discrimination was not limited to "tangible barriers" and "can extend to intangible barriers" like public-facing websites, too. While the district court focused on the plaintiff's ability to access the brick-and-mortar storefront for his coffee-drinking needs, the Eleventh Circuit highlighted the plaintiff's allegations that the website also helps people find store locations and purchase gift cards online, benefits that would seemingly be denied to blind people unable to navigate the inaccessible website. As restaurants move more of their services online, e.g., mobile ordering, online menus and store finder navigation tools, increased scrutiny can be expected from litigants and potentially the federal government.
ADA Class Action Premises Case Remanded
By Nathan A. Adams IV
In Mielo v. Steak 'N Shake Operations, Inc., 897 F. 3d 467 (3d Cir. 2018), the court of appeals ruled that disability rights advocates who brought a putative class action against an operator of a restaurant chain under the ADA satisfied the injury in fact, traceability and redressability test for Article III standing, but not the numerosity or commonality test for class certification. The plaintiffs alleged that they personally experienced difficulty ambulating in their wheelchairs through two steeply graded parking facilities at two restaurant locations. For numerosity, the plaintiffs pointed to the large number of handicapped persons in the U.S. but failed to present evidence on how many handicapped persons patronized the restaurant locations, let alone experienced ADA violations. The court was also not impressed that a single executive of the defendant speculated that thousands of disabled persons use Steak 'n Shake parking lots annually. Likewise, the wide variety of potential ADA violations captured in the broad class definition certified by the district court did not satisfy commonality because there were various types of ADA violations that could have occurred at the restaurants and even in their parking lots, from slope to signage, which could have harmed class members in materially different ways. Consequently, the appeals court reversed the district court's class certification and remanded the case for additional proceedings to determine if the plaintiffs could satisfy these requirements, e.g., by focusing on one type of ADA violation in a parking lot.
Copyright and Trademark
Apparel Company's Rogue Trademark Claim Determined to Be Junior Claim to Brewery
By Patrick Scott O'Bryant
In Excelled Sheepskin & Leather Coat Corp. v. Oregon Brewing Co., 897 F. 3d 413 (2d Cir. 2018), the court of appeals vacated in part and reversed in part a district court's grant of summary judgment in favor of the plaintiff apparel company in a trademark dispute. Both parties had applied to trademark the disputed brand "Rogue," and later entered into a Settlement and Trademark Consent Agreement with one another. The defendant registered the trademark for the brand for goods sold primarily in the defendant's brewpubs and website, while the plaintiff registered the trademark for clothing, namely coats, jackets, vests, shirts and pants. The plaintiff had been selling clothing using the disputed brand on items first in 2000, but in clothing-only stores since 2009. The defendant had been using the brand on clothing since 1989, but began selling items in clothing-only stores in 2011, which was after the trademarks had been registered. The district court found that the defendant's rights to the disputed trademark were inferior, as it had not begun selling clothing with the disputed brand in clothing-only or department stores until 2011. The court of appeals reasoned that the defendant had deliberately and continuously sold clothing with the disputed brand since 1989, and although they were intended to support a trademark for beer, these sales were sufficient to establish a protectable priority in use of the mark for the sale of such goods. An owner's rights are not limited to the types of stores in which the owner has previously exploited the trademark. The fact that the defendant had not sold in department or clothing-only stores did not mean that the plaintiff, a junior user, was "free to usurp" the defendant in those stores.
Taste Cannot Be Copyrighted in European Union
By Nathan A. Adams IV
In Levola Hengelo BV v. Smilde Foods BV, Case C-310/17 (Nov. 13, 2018), the court of justice of the European Union ruled that the taste of a food product cannot be copyrighted or classified as a "work." Levola Hengelo argued that the production and sale of Witte Wievenkaas infringed its copyright in the "taste" of Heksenkaas and brought proceedings against Smilde before the Rechtbank Gelderland (Gelderland District Court, Netherlands). That court ruled that it was not necessary to rule on whether the taste of Heksenkaas was protectable under copyright law, because Levola Hengelo's claims had to be rejected anyway because it had not indicated which elements, or combination of elements, of the taste of Heksenkaas gave it its unique, original character and personal stamp. On appeal, the court of justice determined that it is not currently possible to achieve by technical means a precise and objective identification of the taste of a food product that enables it to be distinguished from the taste of other productions of the same kind, meaning that a food product cannot be classified as a "work" within the meaning of Directive 2001/29.
Labeling
"0g Trans Fat" Misrepresentation Claim Reinstated
By Nathan A. Adams IV
In Hawkins v. Kroger Co., 906 F. 3d 763 (9th Cir. 2018), the court of appeals reversed the district court's dismissal of a putative consumer class action against a bread crumb manufacturer for an alleged misrepresentation on a label indicating that the crumbs contained "0g Trans Fat per serving." The consumer claimed that, but for the label, she would not have purchased the product. The court of appeals determined that the consumer adequately alleged standing under California's Unfair Competition Law, False Advertising Law and the Consumer Legal Remedies Act by alleging that she would not have bought the product but for the misrepresentation. Furthermore, the court of appeals determined that the consumer's labeling claims were not expressly pre-empted by the Nutritional Labeling and Education Act (NLEA). FDA regulations do not authorize bread crumb manufacturers to make statements on a packaging label that bread crumbs contain zero trans fats; therefore, the consumer's labeling claims were not expressly pre-empted by NLEA. The requirement for a manufacturer to state that the product had "0g trans fat per serving" within the nutrition facts panel due to the so-called "rounding rule," which instructs manufacturers to round down to zero, did not give the manufacturer license to make the claim elsewhere on the package. The court of appeals remanded the question whether the consumer's so-called "use" claims were pre-empted. These are claims that it is illegal under California law to include trans fat in products because it is not fit for human consumption and is an unlawful food additive.
Constitution
Butter-Grading Statute Upheld Against Constitutional Challenge
By Nathan A. Adams IV
In Minerva-Dairy, Inc. v. Harsdorf, 905 F. 3d 1047 (7th Cir. 2018), the court of appeals affirmed summary judgment against the plaintiffs' claims that Wisconsin's butter-grading statute violated the Due Process Clause, Equal Protection Clause and dormant Commerce Clause. The court determined that the statute was rationally related to the state's legitimate interests in consumer protection and promoting commerce and, thus, did not violate substantive due process. The state had a legitimate interest in ensuring that consumers had relevant product information that could influence their purchasing decisions. Furthermore, the state did not violate the Equal Protection Clause simply because it made grading for other commodities such as cheese, honey and maple syrup voluntary based on evidence that butter preferences were less diverse and idiosyncratic. Last, Wisconsin's butter-grading statute did not expressly discriminate against interstate commerce in violation of the dormant Commerce Clause because the statute's labeling requirement applied to all producers, whether they resided in-state or out-of-state, and the statute allowed any individual to apply for a butter-grading license. Although out-of-state applicants seeking a Wisconsin butter-grader license would have to travel to Wisconsin to take the required examination, some in-state applicants would have to travel farther.
Legislation and Ordinances
The Farm Animal Confinement Initiative (Proposition 12) passed, requiring all eggs sold in California to come from cage-free hens by 2022 and setting new minimum case size requirements for breeding pigs and calves raised for veal and sold in California.
Oregon's Measure 103 – which would have amended the state constitution to prohibit state and local government from passing taxes on groceries (such as soda) – was defeated, whereas Washington Initiative 1634, which prohibits local governments from passing new taxes or fees on groceries, was approved.
Two states voted to increase the minimum wage. Missouri voters passed Proposition B to increase the state's minimum wage from $7.85 to $12 per hour by 2023, and Arkansas passed Issue 5 to increase wages from $8.50 to $11 per hour by 2021.
Chicago voters approved a nonbinding referendum in favor of banning plastic straws.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.