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California Proposition 65 Actions Expected to Target Furfuryl Alcohol in Food and Beverages

The next wave of lawsuits involving California Proposition 65 and food products may allege exposure to furfuryl alcohol, a chemical commonly found in a wide variety of thermally processed foods and listed as a carcinogen under Proposition 65. The warning requirement for furfuryl alcohol took effect on September 30, 2017.  As of the date of this post, there have been no 60-day notices alleging exposure without a warning. Given the prevalence of this chemical, however, future enforcement actions seem likely.

Furfuryl alcohol forms when amino acids react with sugar in a process known as the “Maillard reaction” that gives many foods a golden brown color.  Much like acrylamide, which has been the subject of numerous 60-day notices and lawsuits, furfuryl alcohol can be found in a wide variety of foods, including:

  • baked goods
  • coffee
  • pasteurized milk
  • alcoholic beverages such as wine and beer
  • ice cream
  • juice beverages
  • toasted nuts

It remains to be seen whether furfuryl alcohol is created in other foods commonly associated with acrylamide, such as French fries and vegetable chips.

No safe harbor level: Proposition 65 requires businesses to provide a warning before exposing consumers to a chemical known to California to cause cancer or reproductive harm. For some of the listed chemicals, California’s Office of Health Hazard Assessment (OEHHA) has established safe harbor levels, in the form of No Significant Risk Levels (NSRLs) for carcinogens and Maximum Allowable Dose Levels (MADLs) for chemicals causing reproductive harm. Exposure below these levels does not require a

Ninth Circuit Blocks San Francisco’s Warnings Ordinance for Sweetened Beverages

In a decision likely to have important implications for regulation of commercial speech, the Ninth Circuit Court of Appeals has blocked a San Francisco ordinance requiring warnings about the health effects of certain sugar-sweetened beverages on fixed advertising.

In American Beverage Association v. the City and County of San Francisco, a three-judge panel held that the California Retailers Association, American Beverage Association, and the California State Outdoor Advertising Association are likely to prevail in their lawsuit challenging the ordinance as violating the First Amendment, and reversed the district court’s denial of a preliminary injunction against enforcement of the ordinance.

The ordinance, S.F. Health Code § 4200 through 4206, was enacted in June 2015 and would require the following warning on any advertisement that “identifies, promotes, or markets a Sugar-Sweetened Beverage for sale or use”:

“WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”

“Sugar-Sweetened Beverage” includes soda and other non-alcoholic beverages that contain at least one added sweetener and more than 25 calories per 12 fluid ounces of beverage.

The ordinance applies to ads posted on billboards, structures, or vehicles, and provides detailed instructions regarding the form and placement of the warning, including requiring that it occupy 20 percent of the advertisement.

Violation of the ordinance can result in administrative penalties by San Francisco’s Director of Health for any violation.

The Ninth Circuit held that the plaintiffs are likely to succeed on

Tiffany’s Trademark Infringement Victory a Costly Lesson for Costco

A federal district court has ordered Costco to pay Tiffany at least $19.4 million in a trademark infringement battle based on generic diamond engagement rings bearing the “Tiffany” name.

Judge Laura Taylor Swain in the Southern District of New York ruled that Tiffany is entitled to $11.1 million as profits for trademark infringement, plus interest, representing triple its lost profits, plus $8.25 million in punitive damages awarded by a jury last October. Judge Swain also permanently barred Costco from using “Tiffany” as a stand-alone term, without modifiers such as “setting,” “set” or “style.”  Tiffany did not assert any infringement claims based on Costco’s use of the terms “Tiffany style” and “Tiffany setting,” leaving open the question of whether these modifiers could provide a fair use defense.  Costco has appealed the ruling.

In an unsuccessful bid to dismiss the case before trial, Costco had argued that “Tiffany” has become a generic term, and that “[t]he diamond ring in question had a pronged setting style that is commonly known as a ‘Tiffany’ setting.” Costco further argued that it intended that the word Tiffany in its signs “convey only that the rings had this style of setting — not that the rings were Tiffany & Co. brand rings.” As evidence, it pointed out that the rings were not sold using Tiffany’s trademark blue boxes.

Judge Swain was not swayed by these arguments. She ruled that Costco’s evidence in the case was “not credible” and “insufficient” to establish that the company’s use of the Tiffany

DOJ Puts Website Accessibility Regulations on Inactive List

Retailers and other businesses that have been waiting for the Department of Justice (“DOJ”) to promulgate regulations concerning website accessibility under Title III of the Americans with Disabilities Act (the “ADA”) will now have to wait a lot longer. Eight years after the DOJ began the rulemaking process on this issue, it has now listed the rulemaking as “inactive.”

Federal agencies typically provide public notice of the regulations that are under development twice a year in the Unified Regulatory Agenda. The first Agenda was issued by the Trump Administration on July 20, 2017, and contains noteworthy changes from the last Agenda issued by the Obama Administration.

For the first time, the Agenda breaks down all agency regulatory actions into three categories: active, long-term, or inactive. While the Agenda does not define these terms, only the active and long-term matters receive a description and projected deadlines. The inactive matters appear in a document called “2017 Inactive Actions.”

Recently, courts have filled the void left by the absence of government regulations with a patchwork of conflicting decisions. As we have previously reported, the Northern District of California granted a motion to dismiss a website accessibility case under the primary jurisdiction doctrine. In Robles v. Dominos Pizza LLC, the court found that holding Dominos liable when the DOJ still has not promulgated website accessibility regulations would violate Dominos’ due process rights.

As we also reported, however, the Southern District of Florida ruled, following a bench trial in Gil v. Winn-Dixie Stores,

Ninth Circuit Reconsiders, Nixes Deceptive Labeling Claim Against Gerber

Baby food maker Gerber has scored a partial victory in a false labeling would be class action. The Ninth Circuit in Bruton v. Gerber Prods. Co., Case No. 15-15174, has reversed itself and thrown out a deceptive labeling claim based on the plaintiff’s lack of evidence that reasonable consumers would be deceived.

Plaintiff Natalia Bruton filed the putative class action against Gerber Product Co. alleging that labels on certain baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration (FDA) regulations that prohibit such claims on products intended for children less than 2 years old. Bruton did not allege that the labels were false, but that the lack of such claims on competitors’ products (in compliance with FDA regulations) made Gerber’s labels likely to mislead the public into believing that Gerber’s products were healthier.

As we reported in a previous post, the Ninth Circuit previously reversed the district court’s grant of summary judgment for Gerber on this issue.  In doing so, the court stated that “even technically correct labels can be misleading.”  In its July 17, 2017 unpublished ruling, however, the court reversed itself and held that “even assuming the validity of Bruton’s theory,” she lacked sufficient evidence to show that reasonable consumers were likely to be deceived by Gerber’s labels, because many of the competitors’ labels included the same types of claims prohibited by the FDA regulations.

The court’s decision highlights that plaintiffs in false labeling and advertising lawsuits

Website Accessibility Update: California Federal Court Denies Hobby Lobby’s Motion to Dismiss

Another website accessibility decision against a retailer, this time involving Hobby Lobby Stores, Inc. in the Central District of California, highlights the uncertainty of the law and of litigating such cases while courts continue to reach different conclusions.

In Gorecki v. Hobby Lobby Stores, Inc., Case No. 2:17-cv-01131-JFW-SK (C.D. Cal. June 15, 2017), the district court denied Hobby Lobby’s motion to dismiss and held that the retailer’s website constitutes a “public accommodation” under Title III of the Americans With Disabilities Act (“ADA”).  In so holding, the court noted that the website allows consumers to purchase products, search for store locations, view special pricing offers, obtain coupons, and purchase gift cards.

The court also relied on Department of Justice (“DOJ”) regulations requiring public accommodations to use auxiliary aids and services to “communicate effectively” with disabled customers.

This decision was issued only two days after a federal judge in the Southern District of Florida handed down a trial verdict against retailer Winn-Dixie. As we recently reported in a blog post and alert, Gil v. Winn-Dixie Stores, Inc., No. 16-cv-23020, Dkt. No. 63 (S.D. Fla. June 13, 2017) was the first website accessibility case to go to trial. In that case, the Website Content Accessibility Guidelines (“WCAG”) 2.0 were adopted as part of the injunctive terms of the decision.

The Hobby Lobby court’s decision is in stark contrast with another recent website accessibility decision from the Northern District of California, which dismissed a website accessibility action under the “primary jurisdiction”

Retailer Loses ADA Website Accessibility Trial

Retailers with both physical locations and a website should take note that a United States District Court has held that Winn-Dixie violated Title III of the Americans with Disabilities Act (“ADA”) because its website was inaccessible to the visually impaired plaintiff.

The Court’s decision in Gil v. Winn-Dixie Stores, Inc., No. 16-cv-23020, Dkt. No. 63 (S.D. Fla. June 13, 2017) is significant for a number of reasons.  First, Gil appears to be the first website accessibility lawsuit to go to trial.

Second, despite the fact that Winn-Dixie does not conduct sales through its website, the Court found that the website was “heavily integrated” with the physical store locations because customers can use the website to access digital coupons, find store locations, and refill prescriptions through the website.

Third, the Court considered the cost of making Winn-Dixie’s website accessible in light of the total cost to launch and upgrade a website. While the Court noted that Winn-Dixie’s estimate of $250,000 “seems high,” the Court ultimately found that it “pales in comparison to the $2 million Winn-Dixie spent in 2015 to open the website and the $7 million it spent in 2016 to remake the website.” Gil, Dkt. No. 63 at 7.

Finally, the Court’s decision includes the specific terms of an injunction. Included among those terms are that the Web Content Accessibility Guidelines (“WCAG”) 2.0 were set forth as the accessibility standard and that Winn Dixie shall require third party vendors who participate on its website to be fully accessible.

Retailers should take

FDA Delays Implementing Nutrition and Supplement Facts Label Rules

The FDA has announced that it is delaying implementation of the Nutrition Facts and Supplement Facts Label and Serving Size final rules.  As we previously reported, the rules were finalized in May 2016 and initially set a general compliance date of July 26, 2018, although manufacturers with annual food sales of less than $10 million were given an additional year to comply.

The FDA did not elaborate on the new timeframe for implementation, but stated in a revised online guidance that it will provide details of the extension through a Federal Register Notice at a later time.

The rules require a revamped Nutrition Facts format that would increase the type size of certain nutrition information, require mandatory declarations for “added sugars,” Vitamin D and potassium, impose a new definition of “dietary fiber,” and revise serving sizes for certain food products.

The FDA explained that the extension was in response to feedback from industry and consumer groups, and will balance industry’s request for more implementation time and to reduce costs, with the importance of minimizing the transition period during which consumers will see both the old and the new versions of the label in the marketplace.

Consumer Groups Sue FDA Over Delay in Implementing Menu Calorie Labeling Rule

In another FDA update, two consumer groups groups have sued the FDA over its decision to extend the compliance date for its calorie labeling rules, which require posting calorie information on all menu items. As we previously reported, just one day

Retailers and Other Food Importers Must Ensure Food They Import Meets U.S. Safety Standards

Requirements take effect today under the FDA’s new Foreign Supplier Verification Program (FSVP), which makes retailers and other businesses that import food into the United States responsible for verifying that the food has been produced in a manner that meets applicable U.S. safety standards.

FSVP is one of the seven foundational rules of the FDA’s Food Safety Modernization Act (FSMA), the most sweeping reform of our food safety laws in more than 70 years. It aims to ensure the U.S. food supply is safe by shifting the focus from responding to contamination to preventing it.

A central tenet of the FSVP is that the same preventive food safety standards should apply to all food consumed in the U.S., regardless of where the food is produced. The FSVP therefore requires that importers have a program in place to verify that their foreign suppliers are producing food in a manner that satisfies FSMA’s requirements for domestic food manufacturers, and also that the food is not adulterated or misbranded with respect to allergen labeling.

Importers must therefore establish and follow written procedures to ensure that they import foods only from foreign suppliers approved based on an evaluation of the risk posed by the imported food and the supplier’s performance or, when necessary on a temporary basis, from unapproved suppliers whose foods are subjected to adequate verification activities before being imported.

What the FSVP Requires

Importers are required to develop, maintain and follow an FSVP for non-exempt food imported into the United States. The

FDA’s Delay in Implementing Calorie Labeling Law Leaves Fate Uncertain

May 12, 2017

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The latest delay by the Food and Drug Administration (FDA) in implementing new calorie labeling rules gives restaurants and food retailers a little breathing room. Originally set for May 5, the agency pushed back the deadline a second time, now requiring compliance by May 2018.

Seven years ago, the menu labeling law was passed as Section 4205 of the Affordable Care Act (ACA), and the FDA has been working on the details ever since.  Its final rule requiring calorie labeling requires restaurants and “similar retail food establishments” (such as convenience stores, grocery stores, concession stands, and food takeout or delivery establishments) that are part of a chain of 20 or more locations and that sell substantially the same menu items to, among other things, post the following on menus and menu boards:

  • calorie information;
  • a succinct statement on suggested daily caloric intake; and
  • a statement that written nutrition information is available upon request (and provide such information, upon request).

The FDA has also issued an industry compliance guide on what types of foods and businesses are covered, what information must be provided, and the format.

Although a bill to repeal and replace the ACA has passed the House, it does not address Section 4205. And since Section 4205 is not related to taxes or revenue, it cannot be repealed through budget reconciliation.

The FDA’s delay in implementing the rule, however, indicates that its fate may be uncertain, particularly under a new FDA commissioner. Some think the

Ninth Circuit Revives Baby Food False Advertising Class Action

May 1, 2017

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The Ninth Circuit has revived a proposed class action against Gerber, saying the mother who sued it for labeling its sugar-laden baby food as “natural” only had to prove the labels were misleading, not necessarily false. “Even technically correct labels can be misleading,” the panel wrote in an unpublished order reversing the district court’s dismissal of the putative class action.

In Bruton v. Gerber Food Products Co., Case No. 5:12-cv-02412-LHK, the plaintiff alleged that labels on certain Gerber baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration regulations incorporated into California law. She challenged the labels that describe the food as “excellent source,” “good source,” “as healthy as fresh,” “no added sugar” and “natural.” The products include a variety of snack foods that allegedly mislead consumers about being good sources of vitamins C and E, iron and zinc, and support “healthy growth and development.”

The district court denied class certification, and granted summary judgment for the company in 2013. The plaintiff appealed, and on Wednesday a three-judge Ninth Circuit panel reversed and remanded, with one judge dissenting in part and concurring in part. The panel held the district court erred when it held the class was not “ascertainable” and that there was a triable issue of fact as to whether the claims on Gerbert’s products in violation of FDA regulations were likely to mislead the public.

“Bruton’s theory of deception does not rely on proving that any of Gerber’s labels were

Court Dismisses Website Accessibility Case as Violating Due Process, Since DOJ Still Has Not Issued Regulations

March 30, 2017

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Recent court decisions from California and Florida may provide ammunition to retailers battling claims that their websites and mobile applications are inaccessible in violation of Title III of the Americans With Disabilities Act (the “ADA”). As we reported in a previous blog post, retailers and other businesses have faced a wave of such demand letters and lawsuits.  Most of these claims settled quickly and confidentially.

However, a California district court recently granted Dominos Pizza’s motion to dismiss under the primary jurisdiction doctrine, which allows courts to stay or dismiss lawsuits pending the resolution of an issue by a government agency. In Robles v. Dominos Pizza LLC, U.S. Dist. Ct. North Dist. Cal. Case No. CV 16-06599 SJO, the court held it would violate Domino’s due process rights to hold that its website violates the ADA, because the Department of Justice still has not promulgated regulations defining website accessibility – despite issuing a notice of proposed rulemaking back in 2010.

The court stated that the DOJ’s application of an industry standard, the Website Content Accessibility Guidelines 2.0 (WCAG 2.0), in statements of interest and consent decrees in other cases does not impose a legally binding standard on all public accommodations. It also noted that those consent decrees indicated flexibility to choose an appropriate auxiliary aid to communicate with disabled customers, and suggested that Domino’s provision of a telephone number for disabled customers may satisfy this obligation. Retailers that do not have an accessible website should therefore provide a toll-free

“Made in USA” Claims Can Be Considered Deceptive Unless Substantiated

Although every product (unless excepted) that is imported into the United States must be marked with its country of origin pursuant to Section 304 of the Tariff Act of 1930, most products manufactured domestically are not required to list the United States as the country of origin. However, if manufacturers or retailers do choose to market their products as “Made in the USA,” these claims must be substantiated, or risk being considered deceptive under federal or state law.

On the federal level, the Federal Trade Commission has issued guidelines and considers representations that a product is “Made in the USA” to be deceptive, unless (1) “all or virtually all” of a product’s components are of U.S. origin, and (2) “all or virtually all” processing takes place in the United States.  Furthermore, the FTC considers phrases such as “Produced in the USA,” “Built in the USA,” or “Manufactured in the USA,” as conveying a near-identical meaning to “Made in the USA,” and applies the same standard.

The standards for “Made in the USA” claims may vary from state to state.  Under California law, for example, such labeling claims are allowed only “if all of the articles, units, or parts of the merchandise obtained from outside the United States constitute not more than 5 percent of the final wholesale value of the manufactured product.” Such labels are also allowed if the manufacturer makes a showing that it cannot produce or obtain a certain article, unit or part within the United States

How to Avoid ADA Claims as Service Animals Increase in Popularity

February 24, 2017

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As retailers see an increasing number of customers seeking to bring animals into their stores, they should ensure that they have well-defined policies and train their employees concerning compliance with the ADA’s provisions regarding service animals. This is the third in a three-part series addressing ADA compliance. In earlier posts we addressed how to improve accessibility and reduce potential liability for premises barriers and website accessibility.

Title III of the ADA prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation,” which includes retail stores.

Under regulations issued by the Department of Justice, service animals are dogs (or miniature horses, since some people are allergic to dogs) that are individually trained to do work or perform tasks for people with disabilities. Some state laws define service animals more broadly to include other types of animals as well. Service animals are working animals – not pets. Emotional support animals, whose sole function is to provide comfort or emotional support, do not qualify as service animals under the ADA.

Retailers may ask customers two questions to determine if an animal qualifies as a service animal:

(1) Is the animal required because of a disability?

(2) What work or task has the animal been trained to perform?

A retailer may not ask these questions, however, when it is readily apparent that the service animal is performing a task for a customer with

Retailers Seek to Improve Website Accessibility Following Surge of ADA Claims

January 19, 2017

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Retailers have faced a wave of demand letters and lawsuits recently alleging that their websites are inaccessible in violation of the Americans With Disabilities Act of 1990 (the “ADA”), despite the fact that the ADA and its implementing regulations do not expressly address websites. This is the second in a three-part series addressing ADA access claims.  In a December 1st post we addressed how to reduce potential liability for premises issues, and this post focuses on website accessibility.

Title III of the ADA prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation,” 42 U.S.C. § 12182(a), which includes brick and mortar retail stores.

The Department of Justice (“DOJ”) is the government agency that enforces the ADA and issues regulations concerning its implementation. The DOJ is in the process of developing regulations for website accessibility, but is not expected to finalize these regulations until 2018 at the earliest.

While government regulations are being developed, the demand letters and lawsuits typically demand compliance with the Web Content Accessibility Guidelines (WCAG) 2.0 level AA guidelines created by an industry group, the World Wide Web Consortium (W3C). Despite its stalled regulations, the DOJ has made clear its position that the ADA applies to websites, and that WCAG 2.0 level AA provides an appropriate standard for website accessibility.

A final rule was announced recently under Section 508 of the

California Extends Prop. 65 Point-of-Sale Warning for BPA for Businesses That Report Food and Beverage Product Information

January 3, 2017

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California’s Office of Environmental Health Hazard Assessment (OEHHA) has extended for another year the regulation allowing businesses to provide a Prop. 65 point-of-sale warning for bisphenol A (BPA) in canned and bottled food and beverage products.

In order to rely on the point-of-sale warning for another year, however, businesses must provide information to OEHHA concerning any such products where BPA has been intentionally added.

The requested information includes the brand name, product description, FDA product category, and UPC code or other specific information. Where bsiphenol A is no longer used in the product but the product is still available in commerce, the last expiration or “use by” date should be given.  The information can be provided in a form or template on OEHHA’s website by clicking here.

The regulation allows businesses to rely on the point-of-sale warning through December 30, 2017. After that date, businesses will need to sell products that comply with the Prop. 65 limit for BPA or use more conventional shelf or product label warnings.

The safe harbor exposure level for BPA is no more than 3 micrograms per day for dermal exposure. No safe harbor level has been established for exposure from ingestion.

Since the warning requirement for BPA took effect in May 2016, thirteen 60-day notices of violation have been served, alleging exposure from receipt paper; polycarbonate water cooler jugs; and polycarbonate glasses, cocktail shakers, measuring cups and serving bowls. None of those notices has yet resulted in a settlement agreement or consent judgment.

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