December 13, 2015

From Textiles & Plastics to Cheese, Snack Bars & Salmon, FTC, Congressmen, and Industry Continue to Weigh-In On How to Appropriately Describe Consumer Products

Seller Beware: Consumer Protection Insights for Industry

Apparently, FDA (here, here) isn't the only part of the government (e.g. here) that wants people to know its position on the "appropriate" way to describe and define products

On December 9, 2015, the FTC announced settlements with four companies that allegedly marketed textile products made from rayon as "bamboo." According to the FTC, the companies violated the Textile Act, the Textile Rules, and The FTC Act by marketing rayon products as "bamboo" despite receiving warning letters from the FTC in 2010 and a synopsis of previous litigated cases against marketers for deceptively labeling rayon products as bamboo. The FTC's enforcement action is another move against the alleged sale of rayon product marketed as bamboo, this time resulting in civil penalties totaling around $1.3 million.

The FDA and the FTC have the authority to regulate the labeling and promotion of most consumer packaged goods through statutes (e.g., the Federal Food, Drug, and Cosmetic Act, Federal Trade Commission Act, Fair Packaging and Labeling Act, Textile Act, Fur Act, and Wool Act) and related implementing regulations. But as the agencies continue to flex their muscles in this arena, affected industries (and their advocates) are feeling more empowered to push back.

  • On December 4, ECM BioFilm filed an appeal with the 6th Circuit regarding the Federal Trade Commission's October 15, 2015 decision that ECM BioFilm made unsubstantiated "biodegradable" claims for its product. The appeal is a part of ECM BioFilm's coordinated effort to overturn what it considers to be an overly burdensome standard for biodegradable claims set by the FTC in its Green Guides. The Commission's October 2015 decision reversed the February 2015 initial decision by Chief Administrative Law Judge D. Michael Chappell, in which Chief Justice Chappell ruled that ECM BioFilms had proven with competent and reliable scientific evidence that its product accelerated biodegradation of conventional plastics and thus had substantiated its unqualified "biodegradable" claims. Notably, Chief Justice Chappell's initial decision rejected the position codified in the FTC's Green Guides at 16 CFR 260.8 that "it is deceptive to make an unqualified degradable claim for items entering the solid waste stream if the items do not completely decompose within one year after customary disposal." While the Commission's October 2015 decision does not discuss the merits of the "within one year after customary disposal" standard (and instead focuses on a five year standard), the 6th Circuit's treatment of this case could impact the Commission's application of the "one year" standard codified in the Green Guides in the future.
  • On December 3, twenty four Members of Congress sent a letter to FDA Deputy Commissioner Michael Taylor, expressing their concern that a change in the E. coli standard for raw milk cheeses would unjustifiably bar artisan cheese producers from marketing many well-established recipes for cheese products. The FDA standard in question limited the level of non-toxigenic E. coli found in raw milk cheeses from 10,000 most probably number (MPN)/gram in 2009 to 10 MPN/gram, and was included in the FDA's latest edition of its Compliance Program Manual and Compliance Policy Guide. The legislators' letter requests that FDA reconsider the standard for legally marketed "cheese" based on the feedback of the legislators, the scientific community, and "whether there is a commensurate risk and public safety benefit with a more stringent standard."
  • On December 1, KIND, LLC filed a citizen petition with FDA requesting that the Commissioner of Food and Drugs update FDA's existing requirements for "healthy" claims to reflect recent federal dietary guidance and scientific evidence that emphasizes the importance of eating certain foods (e.g., vegetables, fruits, whole grains, low- or nonfat dairy, seafood, lean meats and poultry, eggs, legumes, and nuts and seeds) in achieving better health and wellness in contrast to an emphasis on specific nutrient levels in the diet. The petition cites the 2010 Dietary Guidelines for Americans and the Scientific Report of the 2015 Dietary Guidelines Advisory Committee as support for the change, and notes that the current standards exclude foods that "contain beneficial whole ingredients and are recommended for consumption—like nuts, avocados, olives, and salmon" from the definition of "healthy." KIND received a warning letter from FDA in March alleging that it had violated the FDCA by labeling certain KIND snack bars as "healthy" that did not meet the requirements for such a claim as codified at 21 CFR §101.65(d)(2).

And, several parties, including the non-profit advocacy group Center for Food Safety, have expressed concern over FDA's approval of genetically-engineered salmon, asserting, among other things, that the FDA's approval of the product will have adverse economic and environmental consequences.

These, are just a few examples of recent action steps taken by federal agencies, legislators, and industry advocates to influence how advertisers can describe and define consumer products. This period of activity is largely centered on an understanding that what can be said about a product can have an enormous impact on the product's marketability.

With this in mind, companies framing regulatory strategies should not only know (and monitor) the standards governing the manner in which their industry can label and market products, but also consider pushing for changes in standards where they appear to be either out-of-date or inconsistent with consumer expectations. It worked for Amarin and the International Jelly and Preserve Associations. And now others are following suit.

© 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.

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