ABA Litigation Section: Food & Dietary Supplements Workshop

GMOs & PHOs: Initiatives and Challenges

ABA Litigation Section: Food & Dietary Supplements Workshop

ABA Section of Litigation
Food & Supplements Sixth Annual Workshop
June 14, 2016

GMOs AND PHOs: INITIATIVES AND CHALLENGES

The nature and type of ingredients in human food has always been a primary focus of the U.S. Food and Drug Administration’s (FDA or Agency) regulation of food. In recent years, the labeling of genetically engineered substances (more popularly referred to as genetically modified organisms, or GMOs) and the use of partially hydrogenated oils (PHOs) have been at the forefront of FDA’s regulation of food ingredients, resulting in an ever-changing landscape of regulatory uncertainty and litigation risks for the food industry. Although PHOs are not required to be phased out of foods until 2018, the future non-GRAS status of PHOs is being used to support consumer fraud and product liability claims challenging their current use in foods. In contrast, the lack of any final federal approach for the labeling of GMOs has led to an array of labeling initiatives at the state level. The most significant of these, which has been challenged in federal court by several trade associations representing the food industry, is the mandatory labeling of genetically engineered substances set to take effect in Vermont in July 2016. The following provides a brief summary of these issues, highlighting the rapidly evolving legislative, regulatory, and legal issues for PHOs and GMOs confronting the food industry today.

Partially Hydrogenated Oils: Overview of Regulation and Challenges

Background

PHOs are widely used in foods for their functional properties, including but not limited to improved shelf life, stability, texture, and flavor. They are also the primary dietary source of industrially-produced trans fatty acids (trans fats) in food. On July 11, 2003, FDA published a final rule amending its regulations on food labeling to require that trans fats be declared in the Nutrition Facts Panel (NFP) of conventional foods and dietary supplements.[1] In advance of the January 2006 effective date of this labeling requirement, many food companies began to voluntarily reformulate their food products in an attempt to reduce trans fat levels.

In the meantime, in 2004, due to ongoing concerns about the safety of PHOs, the Center for Science in the Public Interest (CSPI) filed a Citizen Petition requesting that FDA revoke the GRAS status of PHOs.[2] Five years later, in 2009, Dr. Fred Kummerow also filed a Citizen Petition requesting that PHOs be removed from the U.S. diet, citing studies linking PHOs/trans fats to cardiovascular disease.[3] In August 2013, Dr. Kummerow sued the FDA, challenging the Agency’s lack of action on his petition and requesting that FDA set a timeline for the removal of PHOs from foods.[4]

On November 8, 2013, FDA published its Notice of Tentative Determination Regarding Partially Hydrogenated Oils.[5] The Notice explained that, based on current scientific evidence, PHOs are not GRAS for any use in food.

On June 17, 2015, FDA published its final determination that PHOs are no longer considered GRAS, finding there is “no longer a consensus that PHOs, the primary source of industrially-produced trans fat, are generally recognized as safe (GRAS) for use in human food, based on current scientific evidence.”[6] The following lists the key points of FDA’s final determination:

1. As of June 18, 2018, PHOs will no longer be considered GRAS for any use in human food, and food manufacturers will not be permitted to sell PHOs or food products containing PHOs without prior FDA approval for use as a food additive.
2. The effective date provides a three-year phase-out period for reformulating and relabeling of products.
3. Industry is invited to submit food additive petitions for specified uses of PHOs, which will require a compelling scientific showing that the proposed use is reasonably certain not to present a risk of harm to consumers.
4. The Order does not change PHO or trans fat NFP labeling requirements.
5. The Order does not contain any express preemption or safe harbor from civil litigation during the pendency of the three year compliance period.

Consolidated Appropriations Act, 2016 (H.R. 2029)

The FDA’s determination regarding the non-GRAS status of PHOs prompted concerns about the impact of such determination on the current marketing of foods with PHOs. In the Consolidated Appropriations Act, 2016, which was enacted December 18, 2015, lawmakers approved language that gives the food industry some protection from lawsuits by declaring that PHOs may not be considered unsafe until at least June 2018:

SEC. 754. No partially hydrogenated oils as defined in the order published by the Food and Drug Administration in the Federal Register on June 17, 2015 (80 Fed. Reg. 34650 et seq.) shall be deemed unsafe within the meaning of section 409(a) and no food that is introduced or delivered for introduction into interstate commerce that bears or contains a partially hydrogenated oil shall be deemed adulterated under sections 402(a)(1) or 19 402(a)(2)(C)(i) by virtue of bearing or containing a partially hydrogenated oil until the compliance date as specified in such order (June 18, 2018).

Case Example:
Backus v. Nestlé USA, Inc.,No. 3:15-cv-1963-MMC (N.D. Cal.)

Proposed class actions filed in May 2015 against Nestlé and General Mills accusing them of using artificial trans fatty acids in their coffee creamers and baking mixes, respectively, are illustrative of current cases premised on the use and labeling of PHOs.[7]

The putative class action against Nestlé claims that the defendant falsely marketed its creamers, including those sold under the Coffee-mate brand, as having no trans fats when such products contain PHO. Backus took issue with Coffee-mate labels saying “0g trans fat” on the front of the bottle and with the company’s use of PHO as an ingredient in light of the fact that federal regulators have determined PHOs to be unsafe.

In March 2016, Backus’ proposed class action ended in dismissal, after a California federal judge found that the claims were preempted by the Federal Food, Drug, and Cosmetic Act.[8] U.S. District Judge Maxine Chesney explained that although FDA has determined that PHOs are no longer GRAS for use in human foods, the Agency has given manufacturers three years to phase out trans fat sources from their products. Backus’ PHO use claims were found to be preempted because they stand as an obstacle to FDA’s carefully-calibrated policy decisions, including that PHOs may be used until June 18, 2018. The court also favorably cited Section 754 of the Consolidated Appropriations Act of 2016 to support its holding. Likewise, the court explained that federal law allows food makers to claim “0g trans fat” on the front of their product labels if the product contains less than half a gram of trans fat, consistent with current NFP requirements. Judge Chesney reasoned that Backus’ claim that “0g trans fat” is misleading is expressly preempted under 21 U.S.C. § 343-1, because it attempts to impose labeling requirements that are not identical to federal labeling law.

GMO Labeling: Overview of Regulation and Challenges

Background

Despite growing consensus that genetically engineered foods are safe, GMO critics point to purported uncertainty about the long term health environmental, agricultural, and ecological consequences of bioengineering.[9] In addition, many of the same critics demand labeling transparency and the “right to know” what is in their foods.[10] Nevertheless, FDA’s longstanding policy is that bioengineered foods need not be labeled differently from non-bioengineered foods except in the rare instance that the altered food product differs so dramatically from its traditional counterpart that the “common or usual name” no longer applies or if “a safety or usage issue exists to which consumers must be alerted.”[11] In practice, FDA regulates genetically engineered foods under its existing regulatory framework, “utilizing an approach identical in principle to that applied to foods developed by traditional plant breeding.”[12] The Agency has maintained this position over the years, most recently in its 2015 denials of two Citizen Petitions requesting FDA to require labels on GMO food.[13] With increasing use of voluntary “Non GMO” labeling claims by food manufacturers, FDA finalized guidance in 2015 on the use of such claims; however, the guidance does not change the Agency’s fundamental position that there is no material difference between genetically engineered and non-genetically engineered foods.[14]

Over the last few years, Congress has introduced various bills and provisions concerning GMO labeling, none of which have been successful. For example, the Genetically Engineered Food Right-to-Know Act—originally introduced in 2013 and reintroduced in 2015—would amend the Federal Food, Drug, and Cosmetic Act (FD&C Act) to require a food containing GMOs to disclose such fact in its labeling or risk being “misbranded.”[15] Similarly, the Safe and Accurate Food Labeling Act (SAFLA) proposed to establish a federal system of voluntary labeling of genetically modified foods,[16] and the Biotechnology Food Labeling Uniformity Act proposed a uniform federal labeling standard by providing four ways that manufacturers can disclose the presence of GMOs in their food products.[17]

The failure of any uniform federal labeling approach for the disclosure of GMOs has prompted states to take their own actions. Over the past few years, states have proposed legislation requiring, to varying degrees, disclosure of GMOs in food labeling. A series of “right to know” bills have been proposed in at least 30 states: Alaska, Arizona, Colorado, Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Washington, West Virginia, and Wyoming. Such laws have been passed in Alaska, Connecticut, Maine, and Vermont.

Vermont Act 120

On May 8, 2014, Vermont became the first state to require mandatory labels on genetically engineered foods.[18] Act 120 requires food offered for sale by a retailer after July 1, 2016, to be labeled if it is entirely or partially produced with genetic engineering. The law also prohibits the use of the term “natural” on products that contain genetically engineered ingredients. Food manufacturers found to be in violation of the labeling requirement face civil penalties of up to $1,000 per day per product, plus civil liability, which could mean hundreds of thousands of dollars of penalties per day for major food and beverage producers with extensive product lines.

Grocery Manufacturers Association v. Sorrell, No. 5:14-CV-117 (D. Vt.)

One month after Act 120 was signed into law, it was challenged in federal court by the Grocery Manufacturers Association, Snack Food Association, International Dairy Foods Association, and National Association of Manufacturers (collectively, the Food Industry Associations or Plaintiffs). The challenge is based on arguments that the law violates the First Amendment by interfering with free speech, violates the Commerce Clause by regulating interstate commerce, and violates the Supremacy Clause by imposing new food labeling requirements that are preempted by the FD&C Act. In addition, there are significant concerns that the law will set the nation on a path toward a 50-state patchwork of GMO labeling policies that will be costly for manufacturers and confusing for consumers.

On January 7, 2015, U.S. District Judge Christina Reiss heard arguments on several issues, including a motion by the Food Industry Associations for a preliminary injunction to postpone the effective date of the Vermont law until the legal challenge has been resolved. On April 27, 2015, the court denied the Plaintiffs’ motion for a preliminary, pointing to, among other things, a lack of federal preemption as a ground for permitting states to require GMO labeling. The Food Industry Associations appealed the case to the Second Circuit Court of Appeals. Arguments on the appeal were heard in early October 2015, and a ruling is awaited with much anticipation.

While the litigation remains pending, the Vermont Office of Attorney General has continued with its planned implementation of Act 120, including the formal adoption of Consumer Protection Rule CP 121,[19] which implements Act 120, and guidance in the form of an annotated version of CP 121 to clarify how the rule will be implemented.[20]

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[1] FDA, HHS, Final Rule, “Food Labeling: Trans Fatty Acids in Nutrition Labeling, Nutrient Content Claims, and Health Claims,” 68 Fed. Reg. 41434 (July 11, 2003).

[2] CSPI, “Citizen Petition for Rulemaking to Revoke the Authority for Industry to Use Partially Hydrogenated Vegetable Oils in Foods,” Docket No. FDA–2004–P–0279 (May 18, 2004).

[3] Fred A. Kummerow, “Citizen petition to ban partially hydrogenated fat from the American diet,” Docket No. FDA–2009–P–0382 (Aug. 4, 2009).

[4] Complaint, Kummerow v. U.S. Food and Drug Administration, 2:13-cv-02180-HAB-DGB (C.D. Ill. Aug. 9, 2013).

[5] FDA, HHS, Notice; request for comments and for scientific data and information, “Tentative Determination regarding Partially Hydrogenated Oils; Request for Comments and for Scientific Data and Information,” 78 Fed. Reg. 67169 (Nov. 8, 2013).

[6] FDA, HHS, Notice, declaratory order, “Final Determination Regarding Partially Hydrogenated Oils,” 80 Fed. Reg. 34650 (June 17, 2015).

[7] The case against General Mills, Backus v. General Mills Inc., No. 3:15-cv-01964 (N.D. Cal.), was stayed based on the doctrine of primary jurisdiction.

[8]Backus v. Nestlé USA, Inc., No. 15-1963 (N.D. Cal., order entered March 8, 2016).

[9]See, e.g., Megan Westgate, “The Power of Labeling: Preserving & Building a Non-GMO Food Supply,” HuffPost Green Blog (posted Oct. 15, 2013); updated Jan. 13 2014).

[10]See, e.g., Our Mission, Right to Know GMO.

[11]Id.

[12] FDA, HHS, Notice, “Statement of Policy: Foods Derived From New Plant Varieties,” 57 Fed. Reg. 22,984 (May 24, 1992).

[13]See Citizen Petition Denial Response from FDA to Center for Food Safety, Docket No. FDA-2011-)-0725 (Nov. 19, 2015), and Citizen Petition Denial Response from FDA to Truth in Labeling Coalition, Docket No. FDA-2010-P-0081 (Nov. 19 2015).

[14] FDA, HHS, Notice of availability, “Voluntary Labeling Indicating Whether Foods Have or Have Not Been Derived

From Genetically Engineered Plants; Guidance for Industry; Availability,” 80 Fed. Reg. 73194 (Nov. 24, 2015); FDA, “Guidance for Industry: Voluntary Labeling Indicating Whether Foods Have or Have Not Been Derived from Genetically Engineered Plants” (Nov. 2015), available at

[15]See H.R. 913, 114th Cong. (as proposed Feb. 12, 2015); S. 511, 114th Cong. (as proposed Feb. 12, 2015).

[16] Safe and Accurate Food Labeling Act, H.R. 1599, 114th Cong. (as passed by H.R., July 23, 2015).

[17] S. 2621, 114th Cong. (introduced Mar. 2, 2016).

[18]See H.112, 2013-2014 Leg., Reg. Sess. (Vt. 2014).

[19]See Consumer Prot. R. 121 (Vt.).

[20]See Public Prot. Div., Vt. Office of the Attorney Gen., Consumer Protection—Labeling Foods Produced with Genetic Engineering, Annotated Consumer Prot. R. 121, adopted pursuant to 2013, No. 120 (Adj. Sess.) §3 (eff. July 1, 2016).