FDA’s Proposed Regulation of Brewers’ Spent Grains is All Wet

spent brewing grains

spent brewing grains

During his February 5, 2014 appearance at a House Energy and Commerce Committee hearing, Food and Drug Administration (FDA) Deputy Commissioner Michael Taylor stated that “the whole goal of [the Food Safety Modernization Act (FSMA)] is to achieve the food safety goal without imposing regulations, just for the sake of regulation.” Dr. Taylor must have been unaware of his agency’s proposal to require that brewers, distillers, and vintners develop extensive hazard analysis and control plans before selling or donating their spent grains or grape pomace to farmers for livestock feed. This proposal seems to be the epitome of regulating for the sake of regulating.

Farmers have been procuring and feeding their livestock spent brewing grains and grapes for centuries. These livestock “happy hour” arrangements advance environmental sustainability, engender bonds among local businesses, and financially benefit both parties. Farmers get low cost whole grain feed packed with fiber, protein, and, of particular importance to livestock in arid climates, moisture. Alcohol makers save millions by not having to landfill the by-products.

FSMA Section 116 exempts activities at facilities which “relateto the manufacturing, processing, packing, or holding of alcoholic beverages.” In a proposed animal food safety regulation, FDA essentially nullifies this statutory exemption. The agency “tentatively concludes” that when brewers or distillers go through the “mashing” process—soaking grains in hot water—and then offer the by-product to farmers, they suddenly become food producers. The same goes for winemakers and their grape pomace. FDA’s conclusion has sparked a deserved firestorm of opposition from the affected industries as well as members of Congress. Continue reading

Federal Workplace Police Have a Tough Week in Court

6th CircuitIf anyone doubts our democracy’s need for an independent judiciary to check the executive and legislative branches, consider two federal court opinions issued last week. Federal workplace police at the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL) each received a thorough (and richly deserved) judicial slapdown for arrogantly flouting the rule of law.

EEOC v. Kaplan Higher Education Corp. The unanimous U.S. Court of Appeals for the Sixth Circuit panel set the tone of this seven-page opinion by declaring, “In this case the EEOC sued the defendant for using the same type of background check that the EEOC itself uses.”

Kaplan implemented vigorous screening of job applicants, including the use of credit checks, in response to several instances of employee theft. Such increased self-policing earned the company an EEOC legal action. The Commission argued that Kaplan’s credit checks had a disparate impact on minorities.

To support its case, EEOC hired a psychologist to perform statistical studies using Kaplan’s applicant data. The “expert” filed numerous reports with the trial judge, most of which were either late or contrary to the judge’s demand that he cease providing reports. The judge found that the psychologists’ reports were unreliable under Federal Rule of Evidence 702 and dismissed EEOC’s case.

The Commission fared just as poorly on appeal. The Sixth Circuit agreed with the lower court’s conclusion that EEOC’s “expert” and his methodology failed every factor that courts utilize to assess expert testimony under the Supreme Court’s Daubert v. Merrell Dow opinion. The judges agreed that a court could neither test the psychologist’s technique, nor could it evaluate the test’s error rate. EEOC argued that its “expert’s” theory did not have to be subject to peer review. The Sixth Circuit found the argument “meritless.” As for the other Daubert factors, EEOC essentially argued that the burden fell on Kaplan to prove they had been met. The court pointedly retorted, “The law says to the contrary.”

The opinion ended as sharply as it began:

We need not belabor the issue further.  The EEOC brought this case on the basis of homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.

Gate Guard Services v. Perez. Here, the Department of Labor lost more than just a case.  Because of its antics, American taxpayers had to shell out $565,527.61 in attorneys’ fees to the enforcement target.

DOL accused Gate Guard Services (GGS) of misclassifying gate sentries as independent contractors. GGS counter-sued and sought a declaratory judgment. In February 2013, U.S. District Court for the Southern District of Texas Senior Judge John Rainey granted GGS summary judgment and dismissed DOL’s claims against the company. GGS then sought attorneys’ fees under the Equal Access to Justice Act (EAJA).

Under that statute, the government must prove that its position in a lawsuit had a reasonable basis in both fact and law (“substantially justified”) at every stage of the action. Judge Rainey agreed with GGS that DOL’s lead investigator departed from DOL enforcement procedures when he destroyed interview notes and assessed a $6 million fine after he had interviewed only three gate sentries.

“Had the DOL interviewed more than just a handful of GGS’s roughly 400 gate attendants,” Judge Rainey wrote, “it would have known [they] were not employees.” He listed ten different factors that DOL failed to reasonably consider, including “the federal government itself, via the ACE [Army Corps of Engineers] uses the services of gate attendants at federal parks and classifies these individuals as independent contractors.”

The court concluded that DOL’s actions both before and during the suit were not substantially justified and awarded fees to GGS.

Checked and Balanced. But for an independent judiciary, the executive branch would be free to engage in the type of hypocrisy and disrespect for rules that were on display in these two cases. It might routinely label employers’ credit checks discriminatory while utilizing the very same screening method, or it could categorize a company’s gate sentries “employees” while other federal agencies consider similarly situation workers “independent contractors.” Agencies would prosecute businesses for destroying internal documents while permitting federal investigators to freely do the same.

We should all be grateful that our federal courts did not tolerate such behavior from EEOC and DOL, and instead reminded them of principles most of us learned in kindergarten: play by the rules and live by the same rules you expect others to abide by.

Also posted at WLF’s Forbes.com contributor page

Behavior of Plaintiffs’ Lawyers in Food “Misbranding” Class Actions Called into Question

scalesOver the last two years at The Legal Pulse, we’ve expended a lot of digital ink on food labeling class action lawsuit rulings from the Northern District of California (aka “The Food Court”). Our focus here shifts to similar suits from the Central District of California. Two recent decisions from that jurisdiction spotlight some questionable behavior by plaintiffs’ lawyers.

Jovel v. Boiron, Inc. Plaintiff Jovel alleged in a class action suit that the non-pharmaceutical flu remedy he purchased at GNC, Oscillo, did not relieve his flu-like symptoms as the product label claimed it would. Boiron opposed Jovel’s motion for class certification on a number of grounds, including that Jovel was not an adequate representative of the class under Federal Rule of Civil Procedure 23(a).

What was it that made Jovel inadequate? During his deposition, Boiron’s counsel asked Jovel when he first read the flu-relieving claims on the product label. He stated that he hadn’t read it until after he finished the entire box—a week  after purchase. That fact is, of course, rather important in a case where the plaintiff must prove he relied on the label’s claims to make his purchase.

After a break in the deposition, Jovel’s story had changed. He said he had read the label before buying the Oscillo. Boiron’s counsel then asked:

Counsel: “Did you have a discussion with your counsel that refreshed your recollection about when you read the box?”

Jovel: “Yes”

Judge Stephen Wilson held that such “inconsistency” in his testimony on a material issue in the case reflected poorly on Jovel’s credibility, and he denied class certification on that basis. Continue reading

Update: FDA Drags Feet on Approval of Internationally-Accepted Vaccine While Drexel Student Dies of Meningitis B

Drexel University

Drexel University

The Centers for Disease Control and Prevention (CDC) have concluded that a Drexel University student who died in early March was infected with the same strain of meningitis, “serogroup B,” that some Princeton University students contracted in late 2013. The two schools are separated by about an hour in the greater Philadelphia area.

We discussed the outbreak at Princeton, as well as another one at the University of California Santa Barbara, and the need for those schools to “import” a meningitis B vaccine from overseas, in a December 19 post, The Meningitis B Outbreak: Heavy Doses of Government Can Be Costly. The vaccine had to be imported under an emergency exception because the Food and Drug Administration (FDA) has still not approved its use in the United States.

The situation at Drexel could parallel the developments at Princeton as opposed to those at UCSB. The Drexel student was reportedly in contact with Princeton students who had visited her at Drexel just a week before her death. In response, Princeton, which obtained and administered Novartis’s Bexsero vaccine after a lengthy federal government-required process, will be offering another round of vaccinations next week. News reports do not indicate whether the Princeton students in contact with the deceased Drexel student had received the inoculations that were made available on their campus, but only 80% of Princeton students have received both recommended doses of vaccine. One hopes that any students who bypassed the inoculations last time around have learned their lesson and will take full advantage of the next round of inoculations being offered.

Meanwhile, students at Drexel and their families will have to be satisfied with CDC’s conclusion that because there are no other meningitis B cases identified at the university, “members of the Drexel community are not considered to be at increased risk.”  Continue reading

(Not) Inconceivable!: Florida Trial Judge Tosses Food Class Action on CAFA Grounds

Amy's KitchenIn a December 2013 post, Two More Food Labeling Class Action Rulings: Harbingers of the New Year?, we lauded Southern District of Florida Judge James Cohn for dismissing claims in a food-labeling class-action lawsuit based on the labeling of products that the plaintiff, Ms. Reilly, never actually purchased.

Judge Cohn issued two more opinions in Reilly v. Amy’s Kitchen, Inc. on March 7. After this one-two punch, the life of Reilly’s case may be no more.

In the first decision, Judge Cohn denied the plaintiff’s motion to reconsider his December 9 order that Reilly lacked standing to sue for alleged injuries caused by products she didn’t purchase. In the second, Judge Cohn dismissed the remaining claims for lack of subject matter jurisdiction. We’ll focus on the second ruling here.

Amy’s Kitchen argued in its motion to dismiss that Reilly’s dramatically thinner suit (from 60 claims to 3 after the December 9 order) failed to achieve the requisite amount in controversy of $5 million under the Class Action Fairness Act (CAFA). Unlike the plaintiffs in these food-labeling class actions, who likely could never produce proof of their purchases if asked, the defendants had very precise sales records. Amy’s Kitchen presented evidence that during the period of time Reilly alleges she was injured, it sold only $1,045,993 of the supposedly offending pizzas, veggie burgers, and enchiladas in Florida.

Vizzini

Vizzini

Judge Cohn agreed that because Reilly never had standing to sue for all 60 products, she could not meet the $5 million amount-in-controversy requirement from the outset.  The court held it could dismiss the suit for lack of subject matter jurisdiction”unless it appears to a ‘legal certainty’ that Plaintiff’s remaining claims meet CAFA’s $5 million jurisdictional minimum.” Reilly attempted to argue that the value of the injunctive relief she sought, combined with attorneys’ fees, could elevate the three claims to $5 million. Judge Cohn found such a possibility (as Wallace Shawn’s Vizzini in The Princess Bride liked to say) “inconceivable,” which falls quite short of “legal certainty.”

Judge Cohn dismissed Reilly’s claims without prejudice, but it seems unlikely an amended complaint will change the judge’s mind. Reilly will proceed with her appeal of the trial court’s December 9 standing decision to the U.S. Court of Appeals for the Eleventh Circuit, which, we expect, will be as unsuccessful as her motion to Judge Cohn for reconsideration.

Also published at WLF’s Forbes.com contributor page

FDA Action Should Take the Juice Out of Some Food Labeling Class Actions

Unevaporated Cane

Unevaporated Cane

We admit that before scrutinizing the related wave of food labeling class action litigation, we had never seen the term “evaporated cane juice” (ECJ).  It might be fair to wonder whether many of the plaintiffs in these suits had ever noticed it on food labels either. But claims alleging that using ECJ on a food label violate federal rules (and thus also California law) have become ubiquitous. As of January 22, there were over 50 suits pending in federal courts with an ECJ claim. Thanks to an action yesterday by the Food and Drug Administration (FDA), those claims may not survive beyond March.

FDA formally reopened the comment period for draft guidance first published on October 7, 2009. That draft guidance informed industry that “dried cane syrup,” not evaporated cane juice, is the common or usual name under federal rules for “the solid or dried form of sugar cane syrup.” FDA never finalized that guidance, but true to FDA form, the agency still invoked it in warning letters sent to companies using the term evaporated cane juice. Continue reading

Decertification Silver Bullet?: Ascertainability Concerns Spoil “Natural” Food Labeling Suit

zoneperfectLast month in Update: Frequent Flier Plaintiff in Food Court Crashes Again with Denial of Class Certification, we discussed the need for judges in food “mislabeling” lawsuits to closely scrutinize whether a feasible method exists for the court to identify who is a member of the putative class (i.e. who bought the allegedly mislabeled product). We applauded Judge Phyllis Hamilton’s application of such an “ascertainability” test to deny class certification in Astiana v. Ben & Jerry’s, but we also bemoaned that her rationale was too narrow.

Another Northern District of California decision last week addressed ascertainability, and it did so in the broader way we had advocated. Judge Samuel Conti’s February 13 order denying class certification in Sethavanish v. ZonePerfect Nutrition Co.  exacerbates a split on ascertainability within the Ninth Circuit, and could have a major impact well beyond food-oriented consumer class actions.

Ms. Sethavanish’s claims mimic those in countless other mislabeling suits: that the use of “all-natural” on ZonePerfect nutrition bar labels is false and misleading and led her to buy those products rather than less expensive ones. She sought to certify a class of consumers under Federal Rule 23(b)(3). After rejecting ZonePerfect’s arguments that the plaintiffs lacked standing, Judge Conti turned to whether Sethvanish was required to offer a feasible method for the court to identify class members. Continue reading

Environmentalists for Foreign Energy Dependence Strike Again

california_expensive_gas_200That special-interest activism has negative consequences is a message Washington Legal Foundation has been communicating for 35 years.

The consequences are sometimes subtle or only become clear over time. In other instances like the outcome we write about here, the consequences are immediately obvious. On January 29, Royal Dutch Shell PLC, citing a January 22 U.S. Court of Appeals for the Ninth Circuit decision as a last straw, announced it would indefinitely put on hold plans to drill for oil beneath Alaska’s Chukchi Sea.

Shell has reportedly invested over $6 billion in its quest to become the first company to extract some of the possibly 27 billion barrels of oil from that offshore location. The leases it obtained from the federal government cost $2.6 billion alone. Over the last eight years, Shell has had to endure delay after delay as a cadre of activist groups—let’s call them collectively Environmentalists for Foreign Energy Dependence—filed lawsuit after lawsuit to slow final approval. A Legal Pulse post from July 2012 details several of these actions, which attacked, among other things, EPA’s emissions permits, Shell’s oil spill plan, and the Bureau of Ocean Energy Management’s (BOEM) environmental impact assessment supporting the lease sale. Continue reading

CVS Action Brings Call for a Food Fight

CVS aisle, CVS/Pharmacy, Bethesda, MD

CVS aisle, CVS/Pharmacy, Bethesda, MD
Photo by Glenn G. Lammi

Well, that didn’t take long.

Just hours after CVS announced last Wednesday that it would halt sales of tobacco, public health activists and their media allies seized the opportunity to advance a notion championed by such anti-”Big Food” luminaries as The New York Times’ Mark Bittman and the Dean of Duke University’s Sanford School of Public Health, Kelly Brownell: food is the next tobacco.

For instance, the Texas Medical Association sent out the following tweet:

The commentary referenced in the tweet stated baldly, “Wander the aisles of CVS and see how their nutritional offerings fit within the framework of an organization pitching health.”

Next, this from Slate business and economics correspondent Matthew Yglesias:

But the cigarettes issue seems to me to mostly raise the question of how far CVS can really go down this road. After all, I was in CVS just yesterday to buy myself some Diet Coke. The Diet Coke sits next to the sugary sodas. And they’re across the aisle from the potato chips. Up front where you cash out there are lots of M&M’s and Snickers bars.

A Saturday op-ed in The Boston Globe called on CVS to put soda, energy drinks, and other “sugary beverages” behind the counter. In support of its absurd viewpoint, the piece quoted health researcher Deborah Cohen from the (normally cerebral) think tank RAND Corporation, who proclaimed, “The food industry is just shoving food in to us.” Nice imagery.

Speaking of imagery, the food=tobacco messaging wouldn’t be complete without a political cartoon.  One by nationally syndicated cartoonist Jimmy Margulies appeared Saturday on the Washington Post op-ed page.

Food companies obviously chafe at the comparison of these two highly dissimilar product categories, as should any person who doesn’t have an axe to grind. But now that opportunities for paternalistic power and money through tobacco control are waning, anti-Big Food activists and their erstwhile allies in the plaintiffs’ bar see food as a logical and vulnerable next target. And they have at the ready an effective strategic activism plan, battle-tested from the “tobacco wars.” Continue reading

Food Court Delivers Plaintiffs’-Lawyer Consortium Mixed Results in Four January Rulings

food-courtCross-posted at WLF’s Forbes.com contributor site

Last July in a Legal Pulse post entitled “Who’s Filling the Food Court with Lawsuits: Consumers or Lawyers?,” we noted the extensive involvement in food “mislabeling” class actions of a consortium of plaintiffs’ lawyers, some of whom had been active in tobacco litigation. Led by the law firm Pratt & Associates, the group filed 24 class actions in the Northern District of California in less than two months in 2012. We’ve now identified a total of 34 cases the consortium has brought to the Food Court.

In that post we offered a chart tracking the current status of the consortium’s cases.  Our updated chart is available here. Kindly let us know if we missed any.

Northern District of California judges have been busy this month on the group’s cases, issuing four substantive rulings.

Gustavson v. Wrigley Sales Co. Judge Koh’s order in this case is the only complete victory of the four for plaintiffs or defendants. After rejecting Wrigley’s motion to dismiss on preemption grounds last September, Judge Koh reversed herself on that issue in this January 7 decision. What changed? Wrigley cited FDA commentary on a 1993 nutrient content labeling rule which supported the company’s use of the term “sugar free” on its gum. The plaintiff’s suit would require placement of certain FDA-required qualifying language on the gum label in a manner different from what FDA rules allow, so Judge Koh held the claim expressly preempted. She dismissed Gustavson’s claims with prejudice. Continue reading