Miscellaneous Articles

COMMENT: Get Ready for Lots More Regulation

Libertarian types and others who are philosophically opposed to government regulation should skip the rest of this article because we are going to make what we think are some less than startling predictions concerning the immediate future of the regulation of the food and dietary supplement industries in the United States. In two words: “Lots more.”

The areas of increased regulation that are either here or may undergo significant development during 2004 are:

Food Security

  • Implementation of FDA Bioterrorism Rules regarding ingredient and product tracking and administrative detention.
  • Expansion of the use of Bioterrorism Rules, such as administrative detention, to pedestrian cases of food borne illness and suspected food adulteration.
  • Bioterrorism rules for products within USDA jurisdiction

Obesity

  • More on-label disclosure requirements for “bad” nutrients in products á la trans fat
  • Warning labels on foods (á la cigarettes) that are high in fat, cholesterol, calories, etc.
  • Limitations on advertising and cross-promotional activities of “fast” and “junk” food when directed at children
    Labeling requirements for “fast food” and warning notices (á la California Prop. 65) for fast food restaurants
  • Government sponsored television commercials demonizing junk food manufacturers (California only)
  • More private (mostly class action) lawsuits

Dietary Supplements

  • More challenges by the FDA and private litigants against dietary supplement manufacturers for marketing unsafe or ineffective products.
  • Proposals to revise the Dietary Supplement Health and Education Act (“DSHEA”) to put some “teeth” back into FDA regulation of dietary supplements

GMO’s

  • State labeling requirements (again, á la Prop. 65) to identify raw and processed foods containing GMO’s
  • Use of zoning and environmental laws to restrict farming of GMO crops and production of GMO livestock. (There is a GMO farming ban on the March 2004 ballot in Mendocino County, California.)
  • Outright bans on the sale of GMO products based upon the states’ police powers.

Note that our predictions are not dependant on which political party controls either the White House or the Congress. The recent growth of federal regulations and regulatory activities affecting the food and dietary supplement industries has occurred during a “conservative” Republican administration with the Republicans controlling both houses of Congress. A Democratic administration will undoubtedly be much of the same, just maybe more of it. Moreover, even if the regulators are sympathetic to industry issues (FDA has tried to put a “happy face” on the Bioterrorism Rules and USDA has been very cool to COOL), inevitably political pressures molded by a frequently not very well informed public opinion that assumes perfect food safety is both achievable and affordable and, sometimes, court decisions, may force the regulators to take off the velvet glove and use the iron fist.

Therefore, the issue facing you isn’t whether regulation is going to increase and get much more complex, it will. The issue is how will you deal with it? Will you either individually or through your trade associations lobby for legislation and rules that are not unduly burdensome and are cost effective? Will you develop and implement on a timely basis compliance programs for your company that meet regulatory requirements? Will you outsource some regulatory compliance activities and to whom? Will you be proactive or wait until what will probably be the every less forgiving FDA, USDA or state inspector orders you to get into compliance? Will a federal or state official escort you off your business premises while wearing metal bracelets?

 

Availability of Irradiated Food Products Growing

Liability If You Don’t Zap?

Recent articles in the San Francisco Chronicle and The Wall Street Journal have focused on the significant growth in the sale of irradiated fresh beef products (in part due to last year’s mega recalls of ground beef) and the fact FDA appears to be poised to approve radiation for many more classes of products including deli meats. Although irradiation was first approved in 1963, critics of the approval contend there is not sufficient data to establish whether there could be adverse long term health effects of consuming irradiated food products. While the FDA’s approvals don’t put the food safety issue completely to rest, courts normally defer to a regulatory agency’s scientific expertise.

This creates an important issue for producers and retailers of food products who don’t use approved radiation methods. Does irradiation create a new industry standard and if you sell a contaminated product could you be liable for punitive damages? A little legal explanation is necessary.

Under modern products liability laws, manufacturers of consumer products are “strictly liable” (liable without fault) for consumer injuries caused by consumption of their products. For example, if a consumer gets sick from eating a packer's ground beef, then the packer is liable and pays for the consumer’s out-of-pocket losses, their prospective losses such as future wages and pain and suffering. It doesn't matter whether or not the product was irradiated. However, if a packer "recklessly” or “willfully” exposed an injured consumer to an unwholesome product, then a jury could hold the packer liable for punitive damages. A number of recent notorious product’s liability cases have involved punitive damage awards far in excess of the consumer’s actual damages. (By the way, under California law you can’t insure for reckless or willful misconduct.) We don’t think that it takes a good deal of imagination for a sick plaintiff to find their way to an attorney who will claim that a defendant food processor engaged in reckless or willful misconduct by failing to irradiate a product that is known to possibly carry food borne illness. Maybe advertising that product is not irradiated could be an (unintentional) warning label.

By the way, restaurants, whether they sell fast food or slow food, are not subject to strict liability. They are liable for injuries caused by negligence, recklessness or willful misconduct. Of course, any plaintiff’s attorney could just claim that a restaurant was negligent if it didn’t use irradiated ingredients.

 

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