June 26, 2015

Trimming the Fat in Processed Foods: FDA Finalizes Ban on PHOs

Seller Beware: Consumer Protection Insights for Industry

Last week, the US Food and Drug Administration (FDA) finalized its proposed ban on partially hydrogenated oils (PHOs) from processed foods based on a determination that there is no longer a scientific consensus on the safety of PHOs. PHOs are the primary dietary source of artificial trans fat, which the FDA believes has been linked to coronary heart disease, and are typically found in products such as margarines, shortenings, and certain baked goods and frozen foods. The FDA's ban on PHOs will take effect in three years -- allowing companies either to reformulate products without PHOs or petition the FDA to permit specific uses of PHOs.

PHOs have been widely used in processed foods since the 1940s. In 2006, the FDA began requiring a declaration of the trans fatty acid content on the Nutrition Facts label of foods. According to the FDA, consumer trans fat consumption decreased about 78 percent between 2003 and 2012, and the labeling rule and industry reformulation of foods were key factors in reducing trans fat in foods.

In 2013, the FDA made a tentative determination that PHOs could no longer be considered "generally recognized as safe" (GRAS) for use in human food and solicited comments on whether it should ban PHOs. Since that time, the FDA has reviewed research on the effects of PHOs and received comments from industry groups, private citizens and others. Based on that review, the FDA chose to finalize the ban it proposed in 2013. Under the provisions adopted by the FDA, companies will not be permitted to add PHOs to human food unless that addition is approved by the FDA. The FDA declined to establish a threshold below which PHOs may be safely used foods, but it did provide formal definitions of PHOs and fully hydrogenated oils (FHOs) and confirmed that FHOs are outside the scope of its determination.

Even before the FDA's recent action, plaintiff's class action lawyers in recent years have sued food companies for damages based on products with trans fat or PHOs. For example, they have sued companies based on the presence of artificial trans fat in food, alleging that the products were misbranded or falsely labeled as not including trans fat. For the most part, these lawsuits have been unsuccessful. Courts, for example, have refused to allow these claims to proceed on a class-wide basis because there was no way to establish that all class members had suffered the same injury when purchasing these products. Courts also have rejected these claims because they were preempted or because plaintiffs could not establish a false statement. Some companies have nevertheless settled as they are reformulating out of trans fat in any event.

Where FDA regulation goes, however, the plaintiffs' bar often follows, and the FDA's recent ban is likely to increase the plaintiffs' bar's interest in trans fat lawsuits. Indeed, two days after the FDA's final action, and relying in part on that action, one of the most active plaintiffs' lawyers sued HJ Heinz Company alleging that Heinz falsely marketed its frozen French fries and tater tots as containing no trans fat. Like many other suits, this one challenges the label claim of "0 grams" trans fat as misleading, even though it is permitted under FDA regulations for products containing less than 0.5 grams of trans fat per serving.

Plaintiffs' lawyers might bring similar class actions in the coming months against other companies that have sold food that contains trans fat and/or PHOs. Moreover, once the ban is in effect, plaintiffs might bring new class actions based on a company's failure to comply with those requirements. Although there would be many obstacles to succeeding on such theories, including difficulty showing that injury can be established a common basis, the potential exposure in such a case could be high. Plaintiffs also might bring actions for supposed personal injuries that allegedly resulted from the consumption of PHOs, or they might attempt to assert new theories based on the presence of trans fat and PHOs, such as claims based on medical monitoring. Moreover, federal or state governments also might bring actions, including for reimbursement for medical costs.

Given the litigation potential created by the FDA's ban on PHOs, companies will want to ensure that they are in compliance with the FDA's requirement before the ban goes into effect and implement measures sufficient to ensure continued compliance. These would include supply chain management and increased controls on products from other companies as well as document retention and recordkeeping practices.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

Subscribe Link

Email Disclaimer