Consumer Advertising Law Blog

FDA Weighs in on Lap-Band Advertising by Surgery Centers

Yesterday, the US Food and Drug Administration (FDA) announced that it has issued Warning Letters (e.g., here and here) to eight California surgical centers and one marketing firm for misleading advertising of Allergan Inc.’s Lap-Band device. FDA stated that certain ads for Lap-Band surgery “misbrand” the device in violation of the Federal Food, Drug, and Cosmetic Act (FDCA). FDA advised the firms to immediately cease their marketing of the Lap-Band and advised them to take prompt action to correct the violations. The FDA made no allegations against manufacturer Allergan in any of the letters. 

The Lap-Band is an adjustable gastric banding device approved by FDA to help obese patients lose weight. The inflatable band is inserted surgically through a small incision and placed at the top of the stomach; it can be tightened or loosened to reduce or enlarge stomach capacity. Potential patients must meet certain medical and health requirements to qualify for the Lap-Band surgery. Healthcare providers who choose to promote the gastric banding procedure must educate patients about the risks involved.

The Warning Letters describe ads including photos of billboards and advertising inserts.

• One of the billboards reads: “LOSE WEIGHT WITH THE LAP-BAND! SAFE 1 HOUR, FDA APPROVED 1-800-GET-THIN; 1-800-953-5000; PPO INSURANCE; FREE INSURANCE VERIFICATION.”
• One of the inserts reads: “LET YOUR NEW LIFE BEGIN!” in large text, with a statement acknowledging certain risks of the procedure in smaller print. 

FDA stated that the ads are misleading and misbrand the device because they fail to reveal material facts, including relevant risk information regarding the use of the Lap-Band, age and other qualifying requirements for the Lap-Band procedure, and the need for ongoing modification of eating habits as provided in the approved Lap-Band labeling. It stated that some of the ads also misbrand the device because they do not adequately state the Lap-Band’s relevant warnings, precautions, side effects, and contraindications. Finally, FDA expressed concern that ads that include risk information provide the information in a font “that may be so small as to render the information illegible.” 

Although FDCA’s “practice of medicine” exception limits FDA’s authority to restrict healthcare providers from prescribing or using medical devices for off-label indications, the exception does not expressly place physician advertising and promotional activities beyond FDA’s reach. Consequently, FDA reviews physician advertising and labeling practices and brings enforcement actions against physicians and other healthcare providers based on such practices. The regulatory risks may be higher where ads for healthcare or medical services include alleged off-label statements about a medical device. The commercial and legal costs of such FDCA violations can be significant, as providers risk government inventory seizures, injunctions, and monetary penalties, as well as consumer protection actions from private litigants or state agencies.

The companies have 15 business days to respond to the agency and lay out plans to correct the violations addressed in the letters.

- Vernessa Pollard and Lauren Robbins

 

It’s as Natural as…

What is natural?  That is a question that has generated much buzz in the courts and in the press.  We previously blogged about the Snapple suit here  and noted that after the suit was brought against Snapple, the company swapped out the contentious corn syrup ingredient for sugar.  The Corn Refiners Association is also under heat from a lawsuit brought by major sugar companies alleging that the Corn Refiners’ commercials and other attempts to rebrand corn syrup as “corn sugar”, “co-opt the goodwill of ‘sugar’ and… sidestep growing consumer sentiment” and are false and misleading. 

A new slew of cases have begun to address the issue of which ingredients would render the “All Natural” label false. It seems that for companies wanting to be accepted by the public as a natural brand, it’s not as easy as removing most or all of the artificial ingredients.  A lawsuit against SkinnyGirl Margarita alleges that its “All Natural” and “Contains No Preservatives” label was false and misleading due to the use of the preservative sodium benzoate.  Shortly before the complaint was filed, Whole Foods pulled the Margarita off its shelf claiming that it wasn’t “all natural.” The company claims on its website that “[t]he litigation filed in relation to the labeling of Skinnygirl Margarita is frivolous.”As Bethenny Frankel stated more provocatively, “I’m not making wheatgrass here. If I could put an agave plant and some limes on a shelf I would.  [The Skinnygirl Margarita] is as close to nature as possible, while still being a shelf stable product.” 

In addition, a class action was recently brought against Kashi, owned by Kellogg, in the Southern District court of California claiming that Kashi’s “All-Natural” GoLean bars, instant hot cereal, chewy cookies, crackers, pita crisps, waffles, and pizza are anything but that.  Plaintiffs name sodium molybdate, phytnadione, sodium selenite, magnesium phosphate, niacinamide, calcium carbonate, calcium phosphate, calcium pantothenate as ingredients that they claim have already been declared synthetic by federal regulations.  They cite the definition of synthetic under the National Organic Program as “[a]substance that is formulated or manufactured by a chemical process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or mineral sources, except that such term shall not apply to substances created by naturally occurring biological processes.”  

Finally, ConAgra, a large Canola Oil Producer, has been sued for its use of the “100% Natural” labeling because the oil is made from genetically modified plants. 

*    *    *

The cases seem to keep on coming.  Part of the problem is that the term ”natural” is not governed by a comprehensive set of requirements.  The FTC abandoned an attempt to define “natural” in the 1980s.  The FDA’s website asks the question “What is the difference between natural and artificial ingredients? Is a naturally produced ingredient safer than an artificially manufactured ingredient? It responds with the answer of “[n]atural ingredients are derived from natural sources (e.g., soybeans and corn provide lecithin to maintain product consistency; beets provide beet powder used as food coloring). Other ingredients are not found in nature and therefore must be synthetically produced as artificial ingredients. Also, some ingredients found in nature can be manufactured artificially and produced more economically, with greater purity and more consistent quality, than their natural counterparts.”  The USDA’s website states that Natural, as applied to meat and poultry, is “[a] product containing no artificial ingredient or added color and is only minimally processed. Minimal processing means that the product was processed in a manner that does not fundamentally alter the product. The label must include a statement explaining the meaning of the term natural (such as "no artificial ingredients; minimally processed").” At least one state and some retail chains have similar policies relating to the presence of natural ingredients and minimal processing.

Given the flood of recent litigation perhaps it is the courts, and not the regulators, who will end up providing sorely needed definition.  Though one wonders whether the regulators aren’t better fit for the job. 

- Randy Shaheen and Deborah Birnbaum

Food Fights Back - Industry Group May Challenge Food Advertising to Children Guidelines

We previously blogged about a draft interagency group proposal to establish principles for foods that are advertised to children. The interagency group includes representatives from the FTC and FDA. The draft proposal sets forth two principles for ten categories of food most heavily marketed to children (such as cereal, candy, dairy, and carbonated and noncarbonated beverages) and suggests that these principles be met by 2016:

• Principle A: Foods marketed to children should make a meaningful contribution to a healthful diet through inclusion of food groups such as juice, whole grains, low fat or fat free dairy, lean meat or fish, beans, nuts and eggs. There are two different suggested approaches to measure whether the contribution is meaningful. The first option looks to whether 50% by weight of the food or dish is comprised of the relevant groups, while the second sets specific goals for one or more of the relevant food groups.
• Principle B: Foods marketed to children should minimize consumption of foods with significant amounts of nutrients that could have a negative impact on health or weight -- specifically, sodium, saturated fat, trans fat, and added sugars. Specific targets are proposed for each of these.

Unlike other efforts to create voluntary food advertising guidelines, the current proposals appear to have generated significantly more opposition. An industry coalition has formed to fight against the guidelines, with the hope that Congress will act to kill the interagency effort. Dan Jaffe, spokesman for the Sensible Food Policy Coalition and executive vice president for the Association of National Advertisers has been quoted as saying that legislative activity is “likely.”

The coalition is putting forth two arguments. First, the coalition argues that the guidelines are overly strict and would potentially impact not only marketing to children but to adults as well. The coalition issued a report last week arguing that 88 of 100 most popular foods with the general public would not meet the standards for salt, sugar and fat set under the voluntary guidelines for advertising foods to children ages 2 to 17. Second, given the current economic climate, the coalition is arguing that the proposed guidelines will significantly impact spending on marketing and will be a job killer. Of course, the proposed guidelines are only voluntary and given the First Amendment are unlikely to ever have the force of law, but the industry is no doubt worried that these guidelines will in practice become industry standards much as other industries have fallen in line behind other FTC voluntary guidelines.

A provision in the report that accompanied the fiscal 2012 House Financial Services spending bill (HR 2434) warned the FTC not to “issue principles or guidelines governing food marketed to children unless a peer-reviewed scientific study conclusively demonstrates that regulating food marketing directed to children is the most effective way of changing long-term eating behavior and reducing obesity.” The provision also warns the FTC not to base any enforcement actions against companies on the guidelines. The House has not yet taken up the bill.

The fiscal 2012 Agriculture spending bill (HR 2112), which did pass, has report language directing the Agriculture Department to seek appropriators’ approval for any future involvement in the interagency working group.

The coalition claims the support of 25 senators and more than 100 House members who have written letters questioning the scope of the interagency group’s work. The majority of signers have been Republicans, but some Democrats also have joined in. So it looks like we may be headed for a full blown food fight.

- Randy Shaheen

FDA Issues Mobile Medical App Guidelines

With over 350,000 apps available through the leading online retailer of mobile Apps, it’s not surprising that, like everyone else, FDA wanted a piece of the action.  On Tuesday, FDA announced the availability of a Draft Guidance document outlining how it intends to regulate “mobile medical apps” - a new term of art for the telehealth industry.  The Draft Guidance is the latest in a growing list of statements and rules, including the recent announcement of its Medical Device Data Systems (MDDS) Final Rule , that describe FDA’s regulatory framework for software, hardware, and IT solutions that perform or facilitate health or medical functions.  Although FDA does not have an overarching regulatory policy regarding computer software, it has determined that in some circumstances, software solutions are medical devices.  In the case of mobile apps, some of those, too, will require FDA scrutiny.

Congress has defined a medical device as, among other things, any instrument, apparatus, implement, or machine that is intended:

• for use in the diagnosis of disease or other conditions; or
• for use in the cure, mitigation, treatment, or prevention of disease; or
• to affect the structure or any function of the body.

A mobile app is regulated as a mobile medical app when meets the definition of a medical device and either:

• is used as an accessory to a regulated medical device; or
• transforms a mobile platform (such as a smart phone or tablet computer) into a regulated medical device.

Before you start to think that just about everything on your new smart phone is now an FDA-regulated product, FDA has carved out certain apps that it does not consider to be within the scope of its Draft Guidance.  FDA included mobile versions of educational texts or reference manuals, such as the Physician’s Desk Reference, among the examples of apps that it does not intend to regulate as mobile medical apps.  Some of the fitness buffs among our subscribers may be interested to know that apps that log or track fitness goals, provide general health or fitness recommendations, or monitor and count our calories are also not considered mobile medical apps.  The same can be said for apps that help with electronic medical records or personal health record systems, and apps that automate general office operations such as scheduling appointments, billing, and the dreaded insurance transactions.

Examples of apps that are regulated as medical mobile apps include:

• apps that display patient-specific data, such as MRI scans or X-rays, for physicians’ review;
• apps that work in concert with an insulin pump to monitor and control the delivery of the proper dose of insulin;
• apps that utilize smart phones to acquire medical data and draw conclusions from that data; and
• apps that analyze patient-specific data to assist in the care of a patient or to recommend a specific treatment action. 

In determining both whether a solution is a mobile medical app and the degree of regulatory oversight that will apply to devices that are mobile medical apps, FDA will consider how the app is being used and marketed. For devices that meet the definition of a mobile medical app, the degree of oversight will depending on issues such as the level of integration or connection between the app and other medical devices, the device-to-device connections, and, of course, the labeling, marketing and promotional materials for the product or solution. FDA intends to require general controls (such as registration, listing, manufacturing quality systems, and adverse event reporting) for all mobile medical apps.  If, however, the app performs functions that are similar to currently regulated medical devices or functions that are critical to patient diagnosis or treatment decisions, FDA may require greater oversight, including premarket review in the form of a 510(k) or premarket application (PMA), along with other “special controls” that FDA deems necessary to assure the safety and effectiveness of a particular device.

FDA is still deciding how it will handle apps that are intended to function with multiple types of medical devices or integrate information from several different sources or types of medical devices.  The agency is soliciting comments from the public on this and other issues to clarify its approach to regulating mobile apps.  Stay iTuned for further details. 

For more information on FDA’s regulation of mobile apps and Health IT solutions, see our advisories on the Draft Guidance and the MDDS rule.

- Vernessa Pollard and Jay Cormier

 

Drug Company May Use Its Sales Force To Sell Two Rival Products for Now; Irreparable Harm the Issue on Appeal

The Southern District of California did an about-face after granting a TRO, and denied a preliminary injunction to stop Eli Lilly & Co from using the same 700-person sales force to market rival drugs.  The court held that money damages would be adequate to remedy any loss if the plaintiff wins at trial.  The forthcoming expedited appeal can be expected to shed light on a plaintiff’s burden to show irreparable harm for preliminary injunctions in the wake of the 2008 Supreme Court’s decision in Winter v. Natural Resources Defense Council, Inc., the core issue in the case -- and a crucial issue for practitioners. 

The secret veil is now removed.  The record in the case -- and even the names of the parties and counsel -- had been “sealed” until recently, but the case has received substantial attention based on the parties’ dueling press releases and “bootleg” copies of pleadings and court decisions in the blogosphere.  With the case now unsealed, we can now see what the fuss is about.

Background:  Lilly enters two contracts with rivals.  In 2002, Lilly entered a collaboration agreement with Plaintiff Amylin Pharmaceuticals to sell Amylin’s type-2 diabetes treatment Byetta.  The trouble started when Lilly entered a different agreement this year with Amylin competitor Boehringer Ingelheim to sell a rival diabetes drug:  BI’s Tradjenta.  Amylin filed suit for antitrust violations, unfair competition, Lanham Act false advertising, and breach of contract. 

Pop Goes the Weight Loss Claim: NAD Turns Thumbs Down on Mulberry Bush Product

The NAD (along with the FTC) continues its emphasis on weight loss claims. A recent NAD decision highlights the NAD initiative with the Council for Responsible Nutrition to expand NAD’s review of dietary supplement advertising claims. NAD launched an inquiry into advertisements made by New Nordic US Inc. concerning its Mulberry Zuccarin dietary supplement. The company’s advertisements claimed, among other things, that the supplement stabilized blood sugar levels, helped over 1,500 customers lose weight, and assisted an individual in losing six dress sizes.

New Nordic agreed that its claim that “1,500 customers lost weight” was not supported by the “level of scientific evidence consistent with other allowable claims reviewed in previous NAD decisions.” Consequently, it agreed to discontinue its use of the statement until it could establish sufficient evidence. The company, however, cited several studies and other evidence as support for its other claims.

Consistent with the FTC’s recent fine tuning to its competent and reliable scientific evidence standard, the NAD looked at New Nordic’s studies with a jaundiced eye, noting that they were conducted on the active ingredient in the product rather than the product itself, that dosage levels were different and that many were conducted on animals rather than humans. Not surprisingly, NAD concluded that the evidence submitted was insufficient to support New Nordic’s claims and recommended that New Nordic discontinue its claims. The company agreed.

Given its partnership with the CRN, look for more dietary supplement matters to come before NAD.

- Randy Shaheen and Quin Landon

Things Are Heating Up in the Sunscreen Legal World

The Consumer Advertising Law Blog wishes all of our US readers a happy Independence Day. As you look forward to a long weekend with family grilling, at parades or waiting for fireworks, we also wanted to remind you not to forget your high SPF sunscreen. And for those reading our blog this weekend using our mobile app, things are heating up in the sunscreen legal world and we wanted to share some timely developments.

Earlier this month, the FDA announced new regulations, which will take effect in 2012, governing how sunscreen manufacturers label and advertise their products to consumers. Janet Woodcock, from the FDA’s CDER, described the benefits for consumers, “These changes will help people make better-informed decisions about how to use sunscreens and allow them to more effectively protect themselves and their families.” Some of the key changes in the new regulations include:

• A standard test for over-the-counter sunscreen to determine whether products can be labeled as “Broad Spectrum,” a label indicating that the product protects against both ultraviolet A (UVA) and ultraviolet B (UVB) rays
• A proposed regulation that would limit the maximum label on sunscreen products to SPF 50+, because the FDA lacks data demonstrating that products with values higher than 50 provide any additional protection
• A regulation prohibiting manufacturers from labeling their products as “waterproof” or “sweatproof” or “sunblock”
• Water resistance claims on the product’s front label must inform consumers how much time they can expect to get the declared SPF level of protection, with permissible durations of 40 or 80 minutes

The FDA is also issuing draft guidance to help sunscreen manufacturers understand the final and proposed regulations and to assist them in properly labeling and testing their products.

In related news, a Delaware federal district court declined to enter a permanent injunction in a Lanham Act false advertising case involving two sunscreen manufacturers. Schering-Plough, the plaintiff, and manufacturer of Coppertone sunscreen, brought claims for false advertising against Neutrogena. Schering-Plough alleged that Neutrogena’s print advertising and packaging for its Ultra Sheer Dry-Touch Sunblock SPF 100+ product falsely claimed that the product contained helioplex, a photo-stabilizing agent. In May, the district court granted partial summary judgment for Schering-Plough, on the basis that lots of defendant’s product shipped in 2009 and 2010 did not contain DEHN, a component of helioplex. Thus, the claim “with helioplex” misrepresented the qualities of the sunscreen and therefore was literally false.

Supreme Court Holds That All Content-Based Restrictions On Speech Are Subject To “Heightened Judicial Scrutiny”

The Supreme Court struck down a Vermont law that imposes content- and speaker-based restrictions on the sale, disclosure, and use of information regarding physicians’ prescribing practices, absent a prescriber’s consent, as violating the free speech rights of pharmaceutical manufacturers.  The statute prohibited the use of such data -- known in the industry as prescriber-identifiable data -- by pharmaceutical manufacturers for marketing purposes, but otherwise permitted disclosure of the information to an almost limitless audience.  The law was challenged by Pharmaceutical Research and Manufacturers of America (PhRMA), the trade association representing brand-name pharmaceutical manufacturers, and a group of companies who collect and aggregate prescriber-identifiable data.

In the decision, the Court explained that a State cannot use its legislative power to burden disfavored speakers and messages, while leaving preferred messages unburdened.  The Court’s decision provides broad First Amendment protection for truthful, non-misleading promotional messages. 

Because the Vermont law imposes content-based burdens on protected speech, the Court held that heightened judicial scrutiny is warranted.  The Court also clarified that heightened scrutiny applies as equally to burdens on speech as to complete bans: “Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content.”  In addition, the Court stated that heightened scrutiny applies to content-based restrictions on speech, even when the speech burdened is commercial in nature.  The Court noted the importance of the free flow of commercial information to consumers, particularly “in the fields of medicine and public health, where information can save lives.”  This is the first case that has held that a content-based burden on commercial speech is subject to “heightened judicial scrutiny.” 

Although the Court determined that heightened scrutiny applied, it also concluded that the law would not survive the less restrictive test for commercial speech.  At a minimum, therefore, the State had to show that Vermont’s law “directly advances a substantial governmental interest and that the measure is drawn to achieve that interest.”  Vermont’s asserted interests to support the law -- medical privacy, increasing public health, and reducing healthcare costs -- did not justify the restrictions on the speech of pharmaceutical manufacturers. 

From a privacy perspective, the Court explained that the law failed to protect prescriber privacy because the ban on disclosure of prescriber-identifiable data was limited to one use by one set of speakers, namely marketing by pharmaceutical manufacturers.  The Court contrasted the Vermont law with the Health Insurance Portability and Accountability Act (HIPAA), which protects patient medical information and permits disclosure in “only a few narrow and well-justified circumstances.”  The Court also explained that the prescriber consent provision could not save Vermont’s law, as it forced doctors to acquiesce in the State’s discrimination against disfavored speech by disfavored speakers to obtain even the limited privacy protections afforded by the statute.  While noting that personal privacy concerns are implicated by advances in technology, the Court emphasized that privacy “is a concept too integral to the person and a right too essential to freedom to allow its manipulation to support just those ideas the government prefers.” 

The Court underscored the important First Amendment principles that protect marketing.  The Court held that although Vermont’s interests in increasing public health and reducing healthcare costs may be proper, the State could not trample on the First Amendment to meet those goals.  A legislature cannot “hamstring” effective and persuasive marketing in order to tilt the public debate in the state’s favor.  Instead, a state is free to express its own opinions in the marketplace of ideas.  When a legislature’s desire to burden speech turns on nothing more than a difference of opinion with manufacturers, the state may not restrict truthful and non-misleading advertising consistent with the First Amendment. 

Arnold & Porter LLP attorneys, including the authors of this post, represented PhRMA throughout this litigation. UPDATE: For a more detailed analysis of the decision, click here.

- Jeff Handwerker, Lisa Blatt, and Sarah Brackney Arni

UK: Out of Circulation

Last week the UK’s advertising regulator, the Advertising Standards Authority (ASA), banned a TV ad from High Tech Health for a “circulation booster,”which it found amounted to teleshopping of a medical treatment.  The promotion of medical treatments via teleshopping is prohibited in Europe under the Audiovisual Media Services (‘AVMS’) Directive 2010/13 and its predecessor legislation; in the UK, the prohibition is reflected in the BCAP code for broadcast advertising.  High Tech Health contended that its TV advert did not amount to “teleshopping” as defined in the AVMS Directive because it did not involve a “direct offer” (in the sense of a contractual offer); the broadcast was in a 60-second advertising slot rather than in a teleshopping window, and a consumer who chose to purchase the product would have to contact the company separately.  High Tech Health also argued that its circulation booster was a medical device, rather than a medical treatment, suggesting that a more inclusive interpretation would have wide implications in terms of free movements of goods (a cornerstone of the EU internal market framework).

The ASA disagreed.  It found that a “direct offer” was not synonymous with a contractual offer by the trader; the broadcast contained both a free phone number and a website address which took orders for the product, and the language of the ad explicitly sought a direct response from customers, urging them to “call now” or to go online to order the product.  The AVMS Directive provided for teleshopping to take place in “spots” as well as “windows,” and the “circulation booster” was being presented for purchase for the purpose of treating medical conditions.

Advertisers in the EU should be particularly careful when promoting “health” products on TV: urging viewers to “buy now!” may well mean a TV ad is crossing the line into teleshopping territory. This decision also shows that the ASA will be unfazed by wider EU freedom of movement (or similar) arguments when it comes to interpreting rules meant to protect consumers.

- Richard Dickinson

Court Rules Plaintiffs’ Claims Too Lean In Hydroxycut Class Action

A federal judge recently dismissed a putative class action against the manufacturers and retailers of Hydroxycut, finding that the plaintiffs failed to plead their allegations with the level of particularity required under the Federal Rules.  Representing a nationwide class of “all persons who purchased Hydroxycut-branded products,” the plaintiffs alleged violations of various state consumer protection laws, breach of warranty, and unjust enrichment.  The complaint, filed December 22, 2009, sought to hold liable not only the makers of Hydroxycut, but also several national retailers that sold the weight-loss products.  The dismissal highlights the increased difficulty plaintiffs face in challenging advertising as false and misleading where plaintiffs do not have the particular details to support each of their claims.  It also has implications for retailers who make representations about the products they sell.

The plaintiffs did not allege any physical injury stemming from their use of the Hydroxycut products.  Rather, the plaintiffs claimed that the products were marketed as safe and effective, when later reports suggested those claims to be untrue.  Among other reports, the complaint cited a 2009 FDA press release that warned consumers to discontinue using the products due to reported health concerns.  Plaintiffs claimed that they failed to get the benefit of their bargain when they purchased what they believed to be a safe and effective weight-loss product, but later learned of the products’ negative health implications.  The court denied the defendants’ motion to dismiss on standing grounds, finding this type of economic injury was sufficient at the pleading stage.

In line with a trend that we have previously reported on, the court construed the plaintiffs’ misleading advertising claims as being “sounded in fraud” and thus subject to the higher pleading standard of Rule 9.  That standard requires the plaintiffs to explain the who, what, where, when, and how of the alleged misrepresentations.  Importantly, that standard does not permit plaintiffs to lump multiple defendants together -- instead, plaintiffs must differentiate their allegations among the multiple parties being sued.  In this case, although the complaint stated that the plaintiffs were exposed to and read defendants’ advertising claims, the complaint failed to allege the specific representation that each of the 20 named plaintiffs saw or read.  In addition, although the complaint provided examples of some of the defendants’ representations that were made online, on television, and on the product packaging, the plaintiffs failed to describe whether those same representations were made on each of the 14 Hydroxycut products covered by the complaint.  Such barebones allegations, according to the court, were insufficient under the Federal Rules.

The complaint also attempted to hold several retailers, including national drug and vitamin chains as responsible for the underlying representations of the Hydroxycut maker.  With one exception, the retailers did nothing but place the Hydroxycut products on the shelf.  According to the court, that conduct alone was insufficient to hold the retailers liable under the plaintiffs’ consumer protection, warranty, and unjust enrichment claims.  Unless the retailers had participated in, controlled, or adopted the allegedly misleading advertising, the claims against the retailers failed.

The only allegation that a retailer promoted or marketed the products concerned statements made on one vitamin seller’s website.  According to the complaint, these representations included claims that Hydroxycut was “the most extraordinary powerful fat burner ever developed” and that it contained “key components that have been scientifically proven to help you lose weight fast.”  The court ultimately dismissed the claims against the retailer because the complaint failed to state which plaintiffs, if any, had seen these specific representations on the website or had relied on them in purchasing the product.  Nevertheless, because the court acknowledged that these representations “could potentially support a consumer protection claim,” the court’s order should serve as a reminder to retailers to tread cautiously when making claims about the products they sell.

As to both the manufacturers and the retailers, the court’s dismissal gives the plaintiffs another chance to fatten up their claims.

- Amy Mudge & Allyson Himelfarb

FTC Cooperates With Canadian Counterparts to Stop “Free” Marketing Scam

Last week, the FTC charged an online marketer with scamming consumers out of $467 million through the deceptive use of “free” and “risk-free” trial offers.

According to the complaint, defendant Jesse Willms and the ten companies he controls allegedly lured consumers into providing their debit and credit card numbers by offering deceptive “free” and “risk-free” trial offers for a variety of products including acai berry weight-loss pills, teeth whiteners, and health supplements. Although the offers supposedly only required payment of nominal shipping and handling fees, consumers were often charged for these “free” trials, as well as recurring monthly fees running as high as $79.95 per month. The alleged scheme affected consumers in the United States, Canada, the UK, Australia, and New Zealand. This case highlights the importance of understanding when it is lawful to use the word “free” in an offer or advertisement.

As David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection said, “Free must really mean free no matter where the offer is made.” While this seems self-evident, there are some subtleties that can trip up even well meaning marketers. The FTC has published a guide that provides additional details on using the word “free” in an offer or advertisement. Some of the key points advertisers should be aware of include:

• When making a “free” offer, all the terms, conditions and obligations upon which receipt and retention of the “free” item are contingent should be set forth clearly and conspicuously at the outset of the offer.
• Product offers that deceptively use the word “free” may not be corrected by replacing the word “free” with such similar terms as “gift,” “given without charge,” “bonus,” or other words that convey to the consuming public that the product is “free.”
• A single size of a product or a single kind of service should not be advertised with a “free” offer in a trade area for more than 6 months in any 12-month period. A minimum of 30 days should elapse before another such offer is made in the same trade area.

This case also illustrates the increasing role of cross-border cooperation in combating consumer fraud, as the Willms companies are based in Alberta, Canada. As Lisa Campbell, Deputy Commissioner of the Competition Bureau Canada said, “Internet fraud is a global problem that requires an international enforcement response.” The FTC worked closely with Competition Bureau Canada, the Royal Canadian Mounted Police, and the Alberta Partnership Against Cross Border Fraud to investigate the alleged scheme.

- Amy Mudge and Sean Hennessy

Is Advertising to Children Like Taking Candy From A Baby? FTC Issues Report and Recommendations on Food Marketing to Kids

Late last month, a coalition of federal agencies published a preliminary proposal to guide the food industry’s self-regulatory efforts with respect to the marketing of food to children aged 2-17.  Congress created the Interagency Working Group on Food Marketed to Children (“Working Group”) as part of the 2009 Omnibus Appropriations Act (H.R. 1105). The Working Group is comprised of members from the Food and Drug Administration, the Centers for Disease Control and Prevention, the United States Department of Agriculture, and the Federal Trade Commission. 

The draft proposal sets forth two principles for ten categories of food most heavily marketed to children (such as cereal, candy, dairy, and carbonated and noncarbonated beverages) and suggests that these principles be met by 2016:

• Principle A: Foods marketed to children should make a meaningful contribution to a healthful diet through inclusion of food groups such as juice, whole grains, low fat or fat free dairy, lean meat or fish, beans, nuts and eggs. There are two different suggested approaches to measure whether the contribution is meaningful. The first option looks to whether 50% by weight of the food or dish is comprised of the relevant groups while the second sets specific goals for one or more of the relevant food groups.
• Principle B: Foods marketed to children should minimize consumption of foods with significant amounts of nutrients that could have a negative impact on health or weight -- specifically, sodium, saturated fat, trans fat, and added sugars. Specific targets are proposed for each of these.

Because the First Amendment constraints on the government’s ability to curb commercial speech, all of the Working Group’s proposals are voluntary and, according to the FTC, are not intended to be a precursor to a rulemaking effort. Nevertheless, in its statement on the proposal, the FTC acknowledged that the proposal sets “ambitious goals” that will be “challenging for the industry to meet.” This is particularly true because the proposed definitions for what activities by food companies constitute “marketing,” which are adopted from a 2006 FTC study of youth-directed food marketing, are “substantially broader” than the definitions that currently govern the industry’s self-regulatory programs and encompass over 20 forms of activity.

Due to these concerns about the breadth of the definition of “marketing,” the Working Group is seeking comments about whether the final recommendations of the proposal should be narrower for adolescents aged 12-17 than for children aged 2-11. The FTC, which will review comments related to definitions in the proposal, seems to be receptive to different rules for different ages. In its statement about the proposal, it notes that adolescents are more capable of understanding the intent of marketing, the evidence of the influence of food marketing on adolescent behavior is inconclusive, and restrictions on marketing to adolescents are more likely to impact marketing that reaches a substantial adult audience.

The FTC is holding an information session on the proposal on May 24, 2011 at the Department of Health and Human Services in Washington, D.C. The deadline for written comments on the proposed principles has been extended to July 14, 2011.

- Randy Shaheen and Daniel Stuart

FDA's Proposed Menu Labeling Regulations May Cause Indigestion

As previously reported in this blog, Section 4205 of the Patient Protection and Affordable Care Act of 2010 requires chain restaurants to list calories on menus for “standard menu items” and to provide other nutritional information in writing upon request. On April 6, 2011, the FDA issued proposed regulations implementing Section 4205. These regulations address issues such as what businesses are subject to the law, what constitutes a menu, how nutritional information must be presented, and other issues.

In some respects, the proposed regulations are more restrictive than expected. For example, the FDA proposes to regulate accuracy using the standard currently applicable to disclosures made in the Nutrition Fact Box on packaged foods. Under this standard, food must contain at least 80% of the declared amount of certain “good” nutrients such as dietary fiber and proteins, and must not exceed the declared amount of certain “bad” nutrients, such as calories and fat, by more than 20%. The FDA’s adoption of this standard appears to conflict with Section 4205’s mandate that restaurants be required only to have a “reasonable basis” for disclosures.

Other aspects of the proposed regulation are less aggressive than some observers had anticipated. For example, the proposed regulation does not requires nutritional disclosures for alcoholic beverages. The FDA reasoned that it is not clear from the face of Section 4205 whether Congress intended to require labeling for alcoholic beverages, and that labels for alcoholic beverages themselves are also regulated by the Alcohol and Tobacco Tax and Trade Bureau.

In still other areas the regulation strikes more of a middle ground. For example, Section 4205 applies to restaurants and “similar retail food establishments.” Under the proposed regulation, a business is a “similar retail establishment” if it sells restaurant-type food and its “primary business activity” is the sale of food. In turn, “primary business activity” means either that that business holds itself out as a restaurant, or that over 50% of its floor space is devoted to selling food. Practically speaking, this approach renders businesses such as convenience stores and grocery stores subject to menu labeling, but excludes entities such as movie theaters, hotels, trains and planes.

Comments on the proposed regulation are due by June 6, 2011, and given the ramifications of menu labeling on industry participants, we expect that the FDA will receive many comments on the proposed regulation. In terms of timing, the FDA has said that it hopes to issue a final rule near the end of 2011, and that it expects to begin enforcement 6 months after the issuance of the final rule. The FDA also proposed a separate regulation implementing calorie labeling requirements for vending machines.  Comments on that proposed regulation are due on July 5, 2011.

- Dan Kracov and George Langendorf

FDA on the Hunt for the FTC?

In an unusual step, a February 1, 2011 FDA Warning Letter to Tennessee Scientific, Inc./Scientific Formulations LLC, citing numerous website “therapeutic claims” for supplements as violating the Federal Food, Drug, and Cosmetic Act, also stated:

“In addition, it is unlawful under the FTC Act, 15 U.S.C. § 41 et seq., to advertise that a product can prevent, treat, or cure human disease unless you possess competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating the claims are true at the time they are made. See FTC v. Direct Mktg. Concepts... More generally, to make or exaggerate such claims, whether directly or indirectly, through the use of a product name, website name, metatags, or other means, without rigorous scientific evidence sufficient to substantiate the claims, violates the FTC Act. See In re Daniel Chapter One, No. 9239, slip op. 18-20, 2009 WL 516000 (F.T.C.), 17-19 (Dec. 24, 2009).”

The exact breadth of FDA’s jurisdiction over websites has been the subject of some debate. Under the Memorandum of Understanding between the agencies, the FTC has primary responsibility over “the truth or falsity of all advertising (other than labeling) of foods, drugs, devices, and cosmetics.” Although FDA has typically cited violations on websites when the URL for the site is found in product labeling or the site has product ordering capability -- creating a nexus to labeling -- it has generally asserted broad and overlapping jurisdiction with the FTC over website claims. FDA also works closely with the FTC on food and dietary supplement claim-related investigations, and cross-referrals between FDA and the Commission are common. This Warning Letter takes that collaboration a step further. Although it is signed by the Acting District Director of the FDA New Orleans District Office, it both calls out specific potential FTC advertising violations and specifically asks the recipients to respond to the FTC:

“In addition, FTC strongly urges you to review all claims for your products and ensure those claims are supported by competent and reliable scientific evidence. Violations of the FTC Act may result in legal action seeking a Federal District Court injunction or Administrative Cease and Desist Order. An order also may require you pay back money to consumers. Please notify FTC, via electronic mail at healthproducts @ ftc.gov, within fifteen (15) working days of receipt of this letter of the specific actions you have taken to address FTC's concerns.”

Going forward, marketers should know that FDA District Offices may be on the hunt for both FDA and the FTC.

On a related note, there has been much concern by companies due to changes in FTC consent order language regarding substantiation for health claims, including requirements that, for certain types of claims, the FTC would require companies under consent orders to obtain FDA approval before making the claims (see, e.g., Iovate, Nestle,  and see prior blog on the consents here). At the recent ABA Consumer Protection Conference, David Vladeck participated in a panel discussing the new cases, and explained this “fencing in” relief negotiated in particular orders. He said it is not the FTC’s position that all companies need FDA approval before making any disease claims in advertising. By way of example, he cited to the FTC’s complaint against POM Wonderful, where the FTC accused POM of making unsubstantiated disease claims but did not allege it is a violation of Section 5 based on the absence of FDA approval.

- Dan Kracov

UPCOMING EVENT: Marketing Medical and Consumer Products in Social Media

The editors of the Consumer Advertising Law Blog wanted to let our readers know about an upcoming webinar that may be of interest to you, entitled, Marketing Medical and Consumer Products in Social Media. [Full disclosure: Our firm, Arnold & Porter LLP, is sponsoring the event]

The Internet is now one of the most popular ways Americans obtain information on medical and consumer products. The emergence and growth of social media have changed traditional notions of what is regulated, who is responsible for product-related messaging, how reporting and regulatory obligations are defined, and the associated corporate compliance and product liability risks. Industry's efforts to leverage social media, and FDA's and FTC's efforts to regulate them, present a new set of legal and regulatory challenges for companies that make and market medical and consumer products and for the lawyers and regulatory professionals who advise them.

During the event, our panel will discuss:

• Incorporating social media into product marketing strategies, compliance policies, and risk management plans.
• Developing strategies to manage regulatory risks as well as other liabilities related to social media.
• Perspectives from an agency expert on current regulatory priorities and enforcement.
• Practical tips on regulatory and litigation risk management, lessons learned, and implementation strategies.

The event features Carl Settlemyer from the Federal Trade Commission's Bureau of Consumer Protection. Panelists at the event will also include Arnold & Porter attorneys Anand Agneshwar, Matthew Keiser, Vernessa Pollard, Steven Reade, and Suzanne Wilson.

The event will take place on December 1, 2010 at 8:30am ET. If you interested in viewing the event via webinar or attending in-person at Arnold & Porter's New York Office, click here. New York CLE Credit is pending.

Natural and Organic Claims Have Their Day in the Sun (i.e., Court)

Consumers increasingly seek out and are often willing to pay a premium for “All natural” and “organic” products. Yet, these terms are often not precisely defined. Most recently, the FTC in its proposed Green Guides declined to define them “either because the FTC lacks a sufficient basis to provide meaningful guidance or because the FTC wants to avoid proposing guidance that duplicates rules or guidance of other agencies.” However, increasingly courts are being asked to provide legal definitions for these terms as consumers turn to them for relief from allegedly misleading uses of these terms.

No free pass for “Organic” related marketing claims under state law

In September the Eighth Circuit issued an opinion addressing to what extent the Organic Foods Production Act of 1990 (OFPA) preempts state consumer protection law. The OFPA establishes national standards for the sale and labeling of organically produced agricultural products and creates a certification program through which agricultural producers can become certified to sell organic products. Thus, in order to sell agricultural products as “100 percent organic,” “organic,” or “made with organic ingredients,” a producer must receive a certification from the USDA or pay a civil penalty of up to $10,000. In April 2007, the USDA proposed revoking Aurora Dairy Corporation’s certification for organic milk, alleging fourteen willful violations of OFPA and NOP, including multiple cases of using nonorganic cows to produce organic milk; willfully selling, labeling, and representing that milk was organically produced when such milk was not produced and handled in accordance with NOP regulations, failing to notify its certifying agent it had terminated its contract with a pasture and livestock management service provider, and failing to report and keep records in accordance with OFPA and NOP guidelines. Aurora entered into a consent decree with the USDA in August 2007.

Shortly thereafter, plaintiffs filed class action lawsuits in federal district courts around the country against Aurora; retailers that sold Aurora’s organic milk; and QAI, the certification agent that certified Aurora to produce organic milk. The plaintiffs alleged that from 2003 to 2007, Aurora’s milk did not meet the NOP regulations. The plaintiffs also alleged that Aurora and the retailers’ packaging and advertisements were false and deceptive under state consumer protection laws. Examples of allegedly deceptive statements include the following:

• Aurora advertised on their “High Meadow” branded cartons that “our motto is ‘Cows First,’” and “[w]e believe that animal welfare and cow comfort are the most important measures in organic dairy.”
• Wal-Mart said the milk was produced without the use of antibiotics or pesticides.
• Safeway, Target and Costco all made claims related to how their cows were raised and fed, including claims that their cows had “plenty of exercise,” “clean drinking water,” and access to “organic pastures for grazing.”

The cases were centralized in the Eastern District of Missouri., which dismissed all plaintiffs’ claims as preempted by the OFPA.

On appeal, the Eighth Circuit affirmed the district court’s ruling that state law claims related to QAI’s decision to not revoke Aurora’s certification under the OFPA, and claims against Aurora and the retailers for falsely selling milk as organic are preempted because they conflict with the OFPA. The court reasoned that if it allowed state laws to apply to the certification process, it could potentially lead to conflicting legal interpretations of the same provisions of the OFPA and NOP such that it would almost be impossible for certifying agents to meet both the federal standard and the various state standards, thus potentially undermining Congress’ intent to creating a uniform, national standard in governing the marketing and interstate commerce of organically produced products.

On the other hand, claims related to facts underlying the certification process (including the marketing claims regarding how the cows are raised and fed) are not preempted by the OFSA. The court stated that broad preemption over claims unrelated to the certification decision and certification compliance would not advance the goals of assuring consumers that organic products meet a consistent standard. In fact, granting broad preemption may decrease consumer confidence in such products based on the realization that organic producers have free license to defraud consumers and avoid liability under state law. These claims were remanded to the district court to determine which of plaintiffs’ claims are preempted. In other words, it appears that the use of the term “organic” itself under the OFPA is preempted but related marketing claims may not be.

FDA leaves it to the courts to define “All Natural”

With respect to “natural” we have previously blogged on cases dealing with this issue here and here. Stays in several of these cases, Ries v. Hornell Brewing Co.(N.D. Cal. Aug. 24, 2010); Holk v. Snapple Beverage Corp. (D.N.J. Sept. 2, 2010); and Von Koenig v. Snapple Brewing Corp. (E.D. Cal. Sept. 9, 2010) had been granted based upon the doctrine of primary jurisdiction, which applies when an action falls within the expertise and experience of an administrative agency. The purpose of the doctrine is “to maintain uniformity and consistency, uphold the integrity of a regulatory scheme, and establish a ‘workable relationship between the courts and administrative agencies.’”

If the doctrine applies, a court must “refer” the issue to the proper agency. The court can then stay or dismiss the action without prejudice so that an agency can issue a determination. In September, the FDA declined to issue a determination on the definition of “all natural.” Thus, in the short term look for the courts to continue to wrestle with this issue. Depending upon the outcome of these cases, regulators may or may not be prompted to more actively engage in this area.

- Randy Shaheen and Chester Choi

Third Circuit Sends FTC and Lane Labs Back For Another Round

Many of us have been awaiting the outcome of the FTC's appeal to the Third Circuit in the Lane Labs case.  As we noted in a previous blog, the FTC had brought a compliance action against Lane Labs alleging that the company lacked adequate substantiation for several of its dietary supplement claims.  The District Court found that the FTC had failed to meet its burden, holding that while there was a disagreement among the scientific studies and experts, Lane Labs had acted reasonably under the circumstances.

Well the Third Circuit has spoken and it looks like we will all have to wait a bit longer for a complete resolution as the case was remanded back to the District Court for a more detailed, claim specific review rather than what the Third Circuit perceived to be a generalized review of the efficacy of the challenged products.

However, the Third Circuit did provide some useful insight along the way.  First, the Third Circuit affirmed the District Court's finding that the claim that AdvaCal would increase bone density in the hip was substantiated.  The Third Circuit did so notwithstanding the absence of any studies specific to AdvaCal because it agreed with Lane's expert that generic calcium trials showing an effect from calcium on bone density in the hip could be extrapolated to AdvaCal because "once the calcium is in your bloodstream, it doesn't make any difference what it was associated with before."  As we have noted in prior blogs, the FTC has adopted new language regarding "reliable and competent scientific evidence" that makes it increasingly difficult to make such "extrapolations" and it will be interesting to see what impact, if any, the Third Circuit's decision has on the FTC's efforts in this regard. 

On the other hand, the Third Circuit found a number of specific claims for AdvaCal to be unsubstantiated, including claims that it was comparable or superior to prescription medicine and that it was unique in its ability to increase bone density

With respect to the male fertility product, the Third Circuit upheld the District Court's finding that a claim of improvement in sperm count in one month was substantiated because the FTC at trial failed to question Lane Lab's expert witness further in regard to what it characterized as his ambiguous testimony. 

In analyzing the District Court's opinion that Lane Labs had not violated that portion of the Order that prohibited misrepresentations regarding tests and research, the Third Circuit held that the conclusion that AdvaCal was generally efficacious did not preclude a finding that the Company had misrepresented clinical studies.  The Third Circuit remanded the issue back to the District Court, noting though that it was "difficult to comprehend" how this provision of the Order had not been violated. 

Lastly, the Third Circuit formally adopted the defense of "substantial compliance."  The Court held that to assert the defense a party must show that it "has taken all reasonable steps to comply with the valid court order" and has "violated the order in a manner that is merely 'technical' or 'inadvertent.'"  In addressing whether Lane Labs had acted "reasonably" the Third Circuit held that the District Court had properly taken into account the FTC's "prolonged delay" (approximately 6 years) in initiating contempt proceedings.  The Court found, however, that the District Court had not made sufficient findings as to whether the alleged violations were "technical" or "inadvertent" and remanded this issue.

In summary, the FTC may have won the victory but lost the war. The Third Circuit's opinion clearly establishes that Lane Labs violated portions of its order, but the Court's opinion on the extrapolation of clinical research to other products and the impact of the long delay in the FTC's compliance process may have the more lasting impact. 

- Randy Shaheen

Green Tea Antioxidant Claims Trigger FDA Warning Letters as Agency Focuses More on FOPs

Last October, we wrote about FDA’s intention to adopt a more aggressive approach to regulating “Front-of-Package” (FOP) food labels. On March 3, 2010, FDA wrote an open letter to the food industry outlining its focus on developing “practical, science-based” criteria for FOP labeling as well as its plans to review FOP labels to determine compliance with existing regulations. At the time, the Agency issued 17 Warning Letters asserting that FOP statements for various products were misleading because they were unauthorized or unsubstantiated health or nutrient claims or were supplemented by or linked to claims or health information on company websites or in other materials that created an mistaken impression about the product or its potential health benefits.

A Warning Letter issued on August 30, 2010 to Dr Pepper Snapple Group and directed at FOP statements regarding antioxidants suggests that FDA is continuing its aggressive approach to regulating FOP statements as well as statements on company websites to which consumers are referred by the product labels (For example, see a warning about dietary supplements focused on a company website here).

The principal display panel of Dr Pepper Snapple Group’s “Sparkling Green Tea Ginger Ale” label contained the claim, “ENHANCED WITH 200 mg OF ANTIOXIDANTS FROM GREEN TEA & VITAMIN C” with the double asterisk referring to the statement, “**Each 8oz serving contains 200mg of antioxidants from Green Tea Flavonoids and Vitamin C.” The warning letter suggests that this claim is misleading for the following reasons:

• The use of the term “enhanced” suggests that the Ginger Ale is fortified with antioxidants - i.e., that it contains at least 10 percent more of the Reference Daily Intake or Daily Reference Value for antioxidants. However, “the FDA does not consider it appropriate to fortify snack foods such as carbonated beverages.”
• The Nutrition Facts on the back label of the bottle indicate that Vitamin C only accounts for 60mg of the 200mg of antioxidants identified. This implies that the remaining 140mg of antioxidants come from “green tea” or “green tea flavonoids;” however, “green tea” is not a recognized source of antioxidants by the FDA.

These “Green Tea” letters are yet another example of FDA’s renewed focus on food labeling as a part of its broader food safety agenda. They illustrate that FDA’s regulatory approach to food labeling focuses not only on the individual label statements, but what those statements imply about the product’s nutrient content when examined in conjunction with the Nutrition Facts on the back panel and the package as a whole. Moreover, as FDA increases its focus on regulating product-related internet and social media content, online content that supplements or explains FOP or package label statements will receive greater scrutiny. For companies, this trend underscores the importance of coordinating the development and review of FOP and other labeling with any supplemental online marketing.

Consistent with FDA’s practice, Dr Pepper Snapple Group had 15 days to respond to FDA with its plan to correct current violations and prevent future violations. Failure to correct the violations may result in regulatory actions without further notice, such as seizure or injunction.

- Vernessa Pollard and Daniel Stuart

Government Tries to Round-Up Truth about Botanicals Claims

In the 1970s Euell Gibbons seemed like a radical when a commercial for Post Grape Nuts featured him telling all of us that you could eat cat tails.

 

Even just a few years ago most of us would have thought that acai was something you shouted during a taekwondo match or that mangosteen was the name of a former Soviet Republic. Today, though, almost everyone wants to add botanicals to their food products, sometimes with claims and sometimes without. With big business comes big scrutiny, and the federal government has stepped up its oversight of botanicals both in terms of their efficacy and safety. NIH through its offices of Dietary Supplements and the National Center for Complementary and Alternative Medicine, has recently awarded over $37 million in grants for the study of botanicals such as plant oils, garlic, elderberry, St. John’s wort, soy and licorice. (No word yet on whether the grants require growing the botanicals, which would put a new twist on “shovel ready” stimulus projects.) This is on top of over $250 million that has been awarded in recent years. According to the Wall Street Journal (subscription may be required), these studies have suggested that chamomile really does make you calm and milk thistle may have an effect on the hepatitis c virus. but that gingko won’t help your memory and that St. John’s wort doesn’t help treat symptoms of ADHD in children. All of this follows on the heels of the FTC’s recent effort to require tighter substantiation standards for at least some dietary supplement claims. In light of these developments, anyone adding botanicals to their product, particularly those making claims, may want to stay abreast of the results of these government funded studies.

- Randy Shaheen

When Do I Need to Print Calorie Information on My Restaurant Menu? Yesterday, Says FDA.

On August, 24, 2010, the U.S. Food and Drug Administration published draft and final guidance documents for restaurants and States on how to interpret and implement the new restaurant menu labeling law. The new law, found in section 4205 of the Patient Protection and Affordable Care Act of 2010, requires all chain restaurants and “similar retail food establishments” with 20 or more locations to provide calorie information for “standard menu items” on menus, and to make other nutritional information available in writing on the premises.

FDA’s final guidance states that the law’s preemption provisions went into effect upon enactment with respect to non-identical state and local provisions, but the concurrently issued draft guidance takes the position that certain major provisions of the law also became effective -- and triggered industry labeling obligations -- when President Obama signed it on March 23, 2010, and provides other tips for compliance.

Although FDA’s position in the draft guidance is arguably contrary to the law, and the Agency has stated that it does not intend to enforce the law at this time, absent a change in position or legal challenge, affected chain restaurants and similar retail food establishments will need to consider implementation prior to the issuance of final regulations. Companies operating 20 or more vending machines are also covered.

States that were hoping to continue enforcing their own menu labeling requirements need to stop, unless those requirements are identical to the federal law.

Now that the draft guidance is out, chain restaurants and similar retail food establishments who thought section 4205 was missing important details have more to chew on, and should consider submitting comments on issues such as:

• Is This A Restaurant or “Similar Retail Food Establishment?” FDA tried to include everyone it could, including “coffee shops, delicatessens, food take out and/or delivery establishments (e.g., pizza take out and delivery establishments), convenience stores, movie theaters, cafeterias, bakeries/retail confectionery stores, food service vendors (e.g., lunch wagons, ice cream shops, mall cookie counters, and sidewalk carts), and transportation carriers (e.g., airlines and trains).” The law also covers “grocery stores [that] have cafes, food courts, or otherwise sell food that is for immediate consumption directly to consumers.” FDA is still mulling over how to regulate grocery stores selling dual-purpose foods (i.e., “that could be consumed immediately or could be purchased as traditional grocery items for future consumption, such as in-store bakeries, salad bars, pizza bars, or delicatessens”).

• There are calories in alcohol? Who knew! Yes, there are calories in alcohol. And according to FDA they have to be printed on the menu or menu board. Margaritaville, take note.

• But she said to hold the mayo? Does she need a new menu? No. Custom orders are not covered. But FDA will be coming up with regulations by springtime to cover what it calls “variable items” like pizzas with toppings chosen from a list.

• Do I need to print calorie information on every menu? It seems that way based on FDA’s interpretation. Although the law says it must be printed on the “primary writing” a customer uses to select an item, FDA has interpreted this to include menu boards, take-out menus, and internet menus. That suggests that, at least in FDA-speak, “primary” means “every.”

• Can I put the calories in the fine print under the coleslaw? FDA wants to see it in big print, right next to the menu item, just like you would list the name of the item and price, and at least as large as whichever is bigger.

• Can I at least omit the trans fat? FDA’s draft would require trans fat to be listed with the additional nutritional information (fat, cholesterol, sodium, carbs, sugars, fiber and protein) that must be provided in writing upon request.

For more information about this development, click here.

- Trent Norris and Zack Allen