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New York County Lawyers Association Vol. 9 Issue 28 | March 2015 | www.nycla.org New York COUNTY LAWYER The Beat of New York Law It’s Not So Wonderful: The Nitty-Gritty of Food Labeling actually in compliance with FDA rules and By Lindsey A. Zahn, Esq. regulations.8 In its suit, Pom Wonderful alleged that Have you ever picked up a food item the use of the label by Coca-Cola was mis- at the super market, scrutinized the label leading and deceptive under § 43 of the enough to realize that something about Lanham Act, which allows a competitor to the product’s description or claims just sue another provided that it asserts unfair seemed off, perhaps even misleading? competition from false or misleading prod- Such is my daily life as a food and bever- uct descriptions.9 The Court of Appeals age attorney. Unfortunately, according for the Ninth Circuit held that the FD&C to a study published in 2008 by The U.S. Act precluded Pom Wonderful’s Lanham Federal Food and Drug Administration Act claim.10 Pom appealed, and the case (FDA), only about 50 percent of consum- reached the Supreme Court in 2014. ers read the ingredients and nutrition facts panels before purchasing a food product What issue was presented in for the first time.1 What is the other half Pom Wonderful? missing? In the world of food and beverage The issue presented in Pom Wonderful regulation, the answer is most likely a lot. was whether a competitor could bring a The FDA has primary jurisdiction over Lanham Act claim challenging a product ensuring the safety and welfare of most food ing from false or misleading advertising.4 blueberry pomegranate juice, sued compet- label that is regulated and authorized by and beverage products in the United States.2 Because advertising and labeling are gen- itor Coca-Cola Company over Coca-Cola’s the FD&C Act.11 Even though the FD&C The FDA also promulgates regulations that erally not mutually exclusive, the regula- Minute Maid Pomegranate Blueberry Act and the FDA provide details on how provide guidance on how manufacturers tion of certain products can present inter- juice.5 The Minute Maid label contained the a manufacturer can label a fruit juice of a should label food or beverage products. esting questions, especially in the context words “blueberry pomegranate” in greater blend of such, there generally is not a pri- The Federal Food Drug and Cosmetic Act of the food and beverages. For example, predominance than other text on the label vate right of action to bring suit against a (FD&C Act), which authorizes the FDA to how do the Lanham Act and FD&C Act that indicated the juice was a blend of five party in violation of such. So a third party, oversee food safety, does not provide an interact when a label is in compliance with fruit juices.6 In actuality, the Minute Maid like Pom Wonderful, would need to find express or implied private right of action to the FD&C Act and enacting agency regula- Pomegranate Blueberry juice contained 0.3 separate grounds to bring a claim. enforce the Act’s provisions.3 tions, yet may present grounds for unfair percent pomegranate juice and 0.2 percent The Lanham Act, which prohibits a competition claims? Such was an issue blueberry juice, whereas 99.4 pecent of the What was the result of number of activities, does allow a competi- presented to the Supreme Court last year. blend contained apple and grape juice.7 Pom Wonderful? tor to bring a private right of action against Pom Wonderful LLC, the producer and While this label may seem misleading on Pom Wonderful holds that competitors its competitor for unfair competition aris- seller of pomegranate juices including a its face, Coca-Cola argued its labeling was { See Foods Laws on page 2 } INSIDE NY COUNTY LAWYER It’s Not So Wonderful: The Impact of the SEC Guidelines on The Nitty-Gritty of Food Labeling . .1 The Impact of the SEC Guidelines on Investment-Based Immigration Investment-Based Immigration.........1 Message from Lew Tesser President of NYCLA ................3 By Janire Lamiquiz, Esq. and Corey T. Lee, Esq. Message from the NYCLA Foundation .................3 Background 1 New Frontiers in Family Offices . .4 Obtaining EB-5 Immigrant Investor status has been a preferred pathway for Personal and Professional Reflections in obtaining lawful permanent resident Honor of the Anniversary of the (LPR) status in the United States for 1964 Civil Rights Act ...............5 wealthy foreign individuals since the inception of the program in 1990.2 Gener- Two United Nations Conferences ally, in order to qualify for EB-5 LPR sta- to Advance Women’s Rights and tus, foreign nationals must invest lawfully Empowerment .....................6 acquired funds (at least $1 million in most cases or $500,000 for rural or high-unem- NYCLA Recent Events ...............7 ployment areas) in a U.S. Citizenship and Immigration Services (USCIS) approved NYCLA In The News ................8 regional center. The investor receives two Taxpayer Bill of Rights and years of conditional LPR status after the Importance of Paying Taxes ..........8 EB-5 visa is granted. The investor must as any economic entity, public or private, Regional centers are attractive to most 3 create or preserve 10 full-time jobs within which is involved the promotion of eco- potential EB-5 investors because they are Speaking Tips ....................8 two years of obtaining conditional LPR nomic growth, improved regional produc- able to capture indirect jobs. In contrast, status to remove the condition and receive tivity, job creation and increased domestic those who invest in a “stand-alone” project NYCLA Library Notes ...............9 LPR status without restrictions. capital investment in a designated con- that is not associated with a regional center NYCLA Upcoming Events . .9 tiguous geographical region. For purposes can only rely on direct jobs that are created. Regional Centers of EB-5, regional centers facilitate capital In other words, those who invest through a Only businesses that have applied for investment of EB-5 investors, fulfilling the regional center are more easily able to ful- and received approval from the United job creation requirement of EB-5 by indi- fill the job creation requirement to remove States Citizen and Immigration Services rectly creating jobs. In essence, a regional conditions to their conditional LPR status. (USCIS) may be designated as regional center acts as an agent, using the capital of Therefore, when the primary investment centers. An EB-5 regional center is defined foreign investors to create jobs indirectly. { See SEC on Immigration on page 2 } 2 • March 2015 The New York County Lawyer the Pom Wonderful, similar claims were While some of this text may be unique labeling regulations and requirements. FOOD LAWS brought against alcohol beverage prod- to the product’s characteristics, the most Continued from page 1 ucts boasting terms like “small batch,” important thing for a manufacturer to Lindsey A. Zahn, Esq., a “handmade,” and “handcrafted” on bev- consider is the accuracy of these claims. NYCLA Member, is an may bring a private right of action under erage labels.15 Since alcohol beverages Under the FD&C Act, a manufacturer of alcohol beverage and food the Lanham Act alleging unfair competi- are regulated by the Alcohol and Tobacco a food and beverage product is responsible attorney. She represents tion from false or misleading product Tax and Trade Bureau—whose regulatory for ensuring that all claims on a label or domestic and international descriptions on the labels of food or bev- authority derives from the Federal Alcohol labeling are truthful and not misleading.17 food and alcohol beverage erages regulated by the FD&C Act.12 The Administration Act—and since alcohol Generally, these requirements have companies with regulatory counseling, FD&C Act’s provisions do not preclude labels require pre-market approval from been mandatory for food and beverage advertising and labeling, import/export the statutory private right of action that the federal government, some wonder manufacturers even pre-Pom Wonderful, issues, licensing, direct shipping, and derives from the Lanham Act.13 Effectively, whether the holding of Pom Wonder- however the case’s ruling may increase the tied house laws. Additionally, she is the the Supreme Court’s holding means the ful would apply. This is yet to be seen, exposure to suits brought by competitors author of an award-winning blog, On FD&C Act will not serve as a limit to food although some ambitious plaintiffs claim or even class actions. Thus, a producer Reserve: A Wine Law Blog (http://www. regulations because Congress intended Pom Wonderful’s outcome should apply to must take precaution to ensure its labels winelawonreserve.com). the Lanham Act and FD&C Act to accom- alcohol, too.16 In actuality, these plaintiffs are not only in compliance with FDA pany one another and be read together, as are also arguing that pre-market approval regulations, but can also defend Lanham 1 Conrad J. Choinière and Amy Lando, opposed to the latter trumping the former. of an alcohol label is simply a floor and Act claims or related state laws. 2008 Health and Diet Survey, Center for As a result of the Pom Wonderful case, does not necessarily imply the producer is Often, this is easier said than done, Food Safety and Applied Nutrition, FDA, food and beverage companies are increas- immune from false advertising or unfair but the FDA does provide a significant available at http://www.fda.gov/Food/ ingly more susceptible to these types of competition claims. amount of regulations and guidance FoodScienceResearch/ConsumerBehav- suits, and state court consumer protection documents to ease the labeling process.
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