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FDA Provides Guidance for New Nutrition and Supplement Facts Labels

On November 5, the FDA released non-binding guidance intended to answer questions related to 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 2018. The FDA has extended that deadline to January 1, 2020 for manufacturers with $10 million or more in annual food sales. Manufacturers with less than $10 million in annual food sales have an extra year to comply, until January 1, 2021.

The May 2016 rules require a revamped Nutrition Facts label that, among other things,

  • Increases the type size of certain nutrition information.
  • Requires declaring actual amount, in addition to percent Daily Value, of vitamin D, calcium, iron and potassium.
  • Requires declaring “Added sugars,” in grams and as percent Daily Value.
  • Updates the list of nutrients that are required or permitted.
  • Removes “Calories from Fat” because research shows the type of fat is more important than the amount, but continues to include “Total Fat,” “Saturated Fat” and “Trans Fat.”
  • Updates Daily Values for nutrients like sodium, dietary fiber and vitamin D based on newer scientific evidence.
  • Updates serving sizes to reflect the amounts that people are actually eating. For packages that are between one and two servings, the calories and other nutrients will be required to be labeled as one serving because people typically consume it in one sitting.

In connection with the May 2016 rules, the FDA provided the following example illustrating

Supreme Court to Review Antitrust Suit Over AmEx Merchant Rules

The retail industry should have great interest in a case set to be decided the Supreme Court this term, the outcome of which will affect the terms and conditions of credit card acceptance for all merchants.

The Supreme Court has granted certiorari to review the Second Circuit’s decision in Ohio v. American Express, an antitrust case in which a group of states have challenged American Express Co.’s rules preventing merchants from steering customers to other credit cards as being anti-competitive.

The case is based on the American Express (“AmEx”) “anti-steering” rules, also known as “non-discriminatory provisions” or “NDPs.” AmEx’s NDPs are provisions in the contracts between AmEx and merchants that prohibit merchants from showing a preference for credit cards other than Amex (like Visa or MasterCard) or otherwise offering customers discounts for using non-Amex credit cards.

In 2010, the federal government and several states filed suit against AmEx, arguing that its anti-steering rules violate Section 1 of the Sherman Act as an unreasonable restraint on trade. After trial, the district court applied the rule of reason to find that AmEx’s NDPs violate the antitrust laws.

On appeal, the Second Circuit reversed the district court and held that plaintiffs failed to show that AmEx’s NDPs were anti-competitive under the rule of reason. Under the rule of reason, the plaintiff has the initial burden to show that the defendant’s conduct has anti-competitive effects in the relevant market.

The Second Circuit held that plaintiffs did not meet their burden of showing anti-competitive effects from the

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

Bans on Credit Card Surcharges Face First Amendment Challenges

State laws that prohibit retailers from charging customers a surcharge for using a credit card are being challenged on First Amendment grounds.

For more than four decades, California’s Song-Beverly Credit Card Act of 1971 prohibited retailers from charging credit card customers such a surcharge. In Italian Colors Restaurant, et al. v. Harris, 99 F.Supp.3d 1199 (E.D. Cal. 2015), a federal judge ruled that the law unconstitutionally limits retailers’ freedom of speech. The California attorney general appealed, and the case is set for oral argument before the Ninth Circuit Court of Appeals on August 17.

The outcome may be influenced by the U.S. Supreme Court’s decision in March of this year in Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (2017), that a similar New York ban on credit card surcharges implicates the First Amendment. That case has been remanded to the Second Circuit to determine whether the ban is unconstitutional.

In states where the surcharge prohibitions have been invalidated by court action, the statute is likely unenforceable, at least temporarily while appeals are being pursued. Ecommerce retailers seeking to impose surcharges also should take care to determine which state’s laws apply to a transaction. It is not safe to assume that the retailer’s location would determine the applicable law. More likely than not, the laws of the state where the customer resides would be applied to the transaction.

Eleven states have passed similar laws banning credit card surcharges. A summary is available here.

Four of those laws

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

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