(This post is an adaptation of an article published in the December 2016 newsletter of the Pesticides, Chemical Regulation, and Right-to-Know Committee, within the American Bar Association’s Section of Environment, Energy, and Resources. A PDF of the article is available here.)
By Irene Hantman
On December 9, 2016, four major chemical manufacturers filed a motion to dismiss [PDF] the Toxic Substances Control Act (TSCA) section 8(e) claims filed against them by the law firm Kasowitz, Benson, Torres & Friedman LLP (Kasowitz) under the False Claims Act (FCA). Under the qui tam provision of the FCA, individuals may pursue claims against any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” In this case, Kasowitz asserts that BASF, Bayer (Convestro), Dow, and Huntsman failed to pay penalties allegedly owed under the Environmental Protection Agency’s (EPA) TSCA section 8(e) Compliance Audit Program (CAP). The case was originally filed in the U.S. District Court, Northern District of California in May 2015. In November 2016 the case was transferred to U.S. District Court for the District of Columbia, and a status hearing was held December 1, 2016.
EPA’s Compliance Audit Program (CAP) and Substantial Risk Information
In the early 1990s, EPA used the CAP to encourage companies to come into compliance with TSCA section 8(e) requirements regarding the immediate reporting of “new information that reasonably supports a conclusion that a chemical substance or mixture presents a substantial risk of injury to health or the environment” (“substantial risk information”). In the Federal Register notice announcing the program, EPA explained that section 8(e) is very important to the Agency’s ability to obtain information needed to set priorities and perform risk assessments. More than 100 companies participated in the program.
The CAP invited companies to enter into Agreements with EPA to audit their past compliance with section 8(e). Companies entering into CAP Agreements were assured that the Agency would pursue only limited penalties and that it would forgo late and/or nonreporting TSCA section 8(e) civil penalties. This could represent substantial savings to companies; in its Enforcement Response Policy, EPA asserts that a section 8(e) violation is a continuing violation. That is, the violation continues from the date when the substantial risk information should have been disclosed through every day on which it has not been disclosed. There is no “Statute of Limitations” for continuing violations. Although the CAP provided significant protections to participants, EPA reserved its rights to take appropriate enforcement action if the Agency later determined that a company was required to submit a study or report under the CAP but failed to do so.
Litigation
While pursuing personal injury litigation against the chemical manufacturers over exposure to certain isocyanate chemicals, Kasowitz identified information that led to filing this lawsuit. The isocyanates involved are: methylene diphenyl diisocyanate (MDI), polymeric MDI (PMDI), and toluene diisocyanate (TDI). Isocyanates are used in the manufacture of polyurethane materials including liquid coatings, paints, and adhesives, flexible and rigid foam, and elastomers.
This complaint [PDF] alleges that the defendants withheld substantial risk information regarding respiratory injury when inhaled at levels below applicable inhalation exposure limits and from de minimis dermal contact. According to Kasowitz, none of the substantial risk information at issue in the case was published in the scientific literature or otherwise available to EPA.
Arguing that the violations began as early as 1980 and continued up until the complaint was filed, Kasowitz claims that the defendants owe billions in penalties under section 8(e). In addition, penalties under the FCA can more than triple. The qui tam provisions of the FCA grant up to 30 percent of any settlement to the private plaintiff.
Kasowitz has put forth a complex legal argument positing that, while BASF, Bayer, Dow, and Huntsman participated in CAP, they:
- Had substantial risk information which section 8(e) obligated them to submit to EPA;
- Were contractually obligated to submit all previously unreported substantial risk information through CAP;
- Knowingly concealed or knowingly and improperly avoided a contractual obligation to transmit civil penalties for their failure to comply with section 8(e) reporting requirements in violation of the FCA; and
- Made, used, or caused to be made or used, a false record or statement material to an obligation to pay or transmit money to the United States government in violation of the FCA.
In their motion to dismiss, the defendants argue that Kasowitz has failed to meet the required elements of claim under FCA. Specifically, they explain that penalties not assessed by EPA do not comprise an “obligation to pay” under the FCA. Kasowitz’s response to the motion is due on February 7, 2017.
Implications
The enrollment period for the CAP expired more than 20 years ago. Today, companies interested in addressing liability for failing to timely submit substantial risk information to EPA must seek the protection of the Audit Policy, using the Agency’s new eDisclosure system.
If this case is successful, companies defending toxic tort litigation may see discovery expanded in search of similar substantial risk information.
EPA plans to limit TSCA CBI protections.
/in TSCAThis summer, EPA published a proposal to modify regulations governing significant new uses of chemical substances (SNUR) under the Toxic Substances Control Act (TSCA) that could significantly impact protections for Confidential Business Information (CBI). The proposed rule would modify the bona fide intent procedures in 40 CFR 721.11 to allow EPA to disclose the confidential significant new use designations to a manufacturer or processor who has established a bona fide intent to manufacture (including import) or process a chemical substance. Specifically, the proposed regulatory language redefines the scope of “confidential business information” to exclude new use designations. Industry groups voiced their concerns with the proposal in comments submitted to the Agency last month. Some comments urged EPA to withdraw the proposal and re-propose it in conformity with the disclosure authorized by the Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act).
Section 14 of the Lautenberg Act prohibits the disclosure of “information that is exempt from disclosure pursuant to subsection (a) of section 552 of title 5, United States Code,” the Public Information Section of the Administrative Procedure Chapter of this Title. The provision explicitly provides that this protection extends to “processes used in the manufacturing or processing of a chemical substance or mixture.” Several commenters stressed that it appears that the proposed regulation goes beyond what the statute allows.
The American Chemistry Council (ACC) noted in its comments that EPA needs only to respond to the bona fide intent requestor with a “yes” or “no” to address whether the proposed use of the SNUR substance is a new use. Therefore, the ACC stressed, the proposed amendment to 40 CFR 721.11 would disclose more confidential information than is necessary to answer the requestor’s question. Other comments, from the American Fuel & Petrochemical Manufacturers, argue that the Agency’s plans to disclose this information would create an anticompetitive environment by giving an advantage to those who submit bona fide intent notices.
In their comments, these industry groups also recommended EPA expand the SNUR CBI provision to impose additional requirements on both the Agency and chemical manufacturers. The ACC asserted that EPA should be required to inform the original PMN submitter when it discloses any confidential information to a requestor similar to the existing provision regarding the Confidential Inventory (40 CFR 720.25(b)(6)). Another set of comments, from the American Petroleum Institute, suggested that the Agency use consent order and SNUR requirements to compel manufacturers to inform downstream customers of all potentially applicable compliance requirements related to a substance.
The proposed amendments to the SNUR CBI provisions could affect EPA’s treatment of CBI under TSCA more generally. The Lautenberg Act requires manufacturers and importers to reassert CBI claims during the Inventory Reset process. The proposal for that process may also attempt to limit CBI protections.
EPA is Removing 72 Inert Ingredients Previously Approved for Use in Pesticide Products
/in FIFRAOn October 22, 2014, EPA published for comment a proposal to remove from EPA’s list of inert ingredients approved for use in pesticide products 72 chemical substances that are no longer being used as inert ingredients in pesticide products. (79 FR 63120) In response to EPA’s request for comments, no specific information regarding those 72 chemical substances or any products that may include them was provided to EPA, indicating that these chemical substances are not being used in currently approved pesticide product formulations. Therefore, as of December 14, 2016, (81 FR 90356) EPA decided to remove all 72 from the inert ingredient list. A list of the 72 inert ingredients can be found here.
Removal of a chemical substance from the approved inert ingredient listing does not, in and of itself, restrict the use of the chemical substance in a pesticide product, instead it changes the way an application is processed. Once removed, the chemical substance would be considered a “new” inert ingredient. Any inert ingredient that is not on the approved list must be approved by EPA before registration for a formulation containing that chemical substance as an inert ingredient. EPA approval can be obtained by submitting a request, along with relevant data including, among other things, studies to evaluate potential carcinogenicity, adverse reproductive effects, developmental toxicity, genotoxicity, as well as environmental effects associated with any chemical substance that is persistent or bioaccumulative. Further, adding the chemical substance to the list of approved inert ingredients would also require payment of a fee in accordance with FIFRA Section 33, 7 U.S.C. 136w-8.
Litigating the obligation to report substantial risk information and pay penalties under TSCA section 8(e).
/in TSCA(This post is an adaptation of an article published in the December 2016 newsletter of the Pesticides, Chemical Regulation, and Right-to-Know Committee, within the American Bar Association’s Section of Environment, Energy, and Resources. A PDF of the article is available here.)
By Irene Hantman
On December 9, 2016, four major chemical manufacturers filed a motion to dismiss [PDF] the Toxic Substances Control Act (TSCA) section 8(e) claims filed against them by the law firm Kasowitz, Benson, Torres & Friedman LLP (Kasowitz) under the False Claims Act (FCA). Under the qui tam provision of the FCA, individuals may pursue claims against any person who “knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” In this case, Kasowitz asserts that BASF, Bayer (Convestro), Dow, and Huntsman failed to pay penalties allegedly owed under the Environmental Protection Agency’s (EPA) TSCA section 8(e) Compliance Audit Program (CAP). The case was originally filed in the U.S. District Court, Northern District of California in May 2015. In November 2016 the case was transferred to U.S. District Court for the District of Columbia, and a status hearing was held December 1, 2016.
EPA’s Compliance Audit Program (CAP) and Substantial Risk Information
In the early 1990s, EPA used the CAP to encourage companies to come into compliance with TSCA section 8(e) requirements regarding the immediate reporting of “new information that reasonably supports a conclusion that a chemical substance or mixture presents a substantial risk of injury to health or the environment” (“substantial risk information”). In the Federal Register notice announcing the program, EPA explained that section 8(e) is very important to the Agency’s ability to obtain information needed to set priorities and perform risk assessments. More than 100 companies participated in the program.
The CAP invited companies to enter into Agreements with EPA to audit their past compliance with section 8(e). Companies entering into CAP Agreements were assured that the Agency would pursue only limited penalties and that it would forgo late and/or nonreporting TSCA section 8(e) civil penalties. This could represent substantial savings to companies; in its Enforcement Response Policy, EPA asserts that a section 8(e) violation is a continuing violation. That is, the violation continues from the date when the substantial risk information should have been disclosed through every day on which it has not been disclosed. There is no “Statute of Limitations” for continuing violations. Although the CAP provided significant protections to participants, EPA reserved its rights to take appropriate enforcement action if the Agency later determined that a company was required to submit a study or report under the CAP but failed to do so.
Litigation
While pursuing personal injury litigation against the chemical manufacturers over exposure to certain isocyanate chemicals, Kasowitz identified information that led to filing this lawsuit. The isocyanates involved are: methylene diphenyl diisocyanate (MDI), polymeric MDI (PMDI), and toluene diisocyanate (TDI). Isocyanates are used in the manufacture of polyurethane materials including liquid coatings, paints, and adhesives, flexible and rigid foam, and elastomers.
This complaint [PDF] alleges that the defendants withheld substantial risk information regarding respiratory injury when inhaled at levels below applicable inhalation exposure limits and from de minimis dermal contact. According to Kasowitz, none of the substantial risk information at issue in the case was published in the scientific literature or otherwise available to EPA.
Arguing that the violations began as early as 1980 and continued up until the complaint was filed, Kasowitz claims that the defendants owe billions in penalties under section 8(e). In addition, penalties under the FCA can more than triple. The qui tam provisions of the FCA grant up to 30 percent of any settlement to the private plaintiff.
Kasowitz has put forth a complex legal argument positing that, while BASF, Bayer, Dow, and Huntsman participated in CAP, they:
In their motion to dismiss, the defendants argue that Kasowitz has failed to meet the required elements of claim under FCA. Specifically, they explain that penalties not assessed by EPA do not comprise an “obligation to pay” under the FCA. Kasowitz’s response to the motion is due on February 7, 2017.
Implications
The enrollment period for the CAP expired more than 20 years ago. Today, companies interested in addressing liability for failing to timely submit substantial risk information to EPA must seek the protection of the Audit Policy, using the Agency’s new eDisclosure system.
If this case is successful, companies defending toxic tort litigation may see discovery expanded in search of similar substantial risk information.
Draft Alternatives Analysis Guide released for California’s Safer Consumer Products program.
/in DTSC, Safer Consumer ProductsOn Monday, the California Department of Toxic Substances Control (DTSC) released a draft version of its Alternatives Analysis Guide, a document that will be critical to the implementation of the state’s Safer Consumer Products (SCP) program. Once finalized, the Guide will provide a framework and steps to help responsible entities (the manufacturers, importers, assemblers, and retailers of designated “Priority Products”) conduct an “Alternatives Analysis,” as required by the SCP regulations.
Under the SCP program, each Alternatives Analysis will look at how to best limit or prevent potential harm from the potentially hazardous “Candidate Chemical” in Priority Products. Every Alternatives Analysis must consider important impacts of the product throughout its life cycle and provide for specific actions to make the product safer.
After receiving and approving a final Alternatives Analysis report, DTSC will implement Regulatory Responses which favor the safest feasible alternatives. These actions may take the form of enforceable orders or agreements requiring further manufacturer research, additional information to DTSC or consumers, product redesign, end-of-life product stewardship, or sales restrictions or prohibition.
The draft Alternatives Analysis Guide provides information about the general process of conducting an Alternatives Analysis and is meant to be a “resource book” for people preparing Alternatives Analyses. The Guide provides methods, tools, information sources, and “best practice approaches” for conducting an Alternatives Analysis, and is expected to be updated periodically. The Guide is not a “regulatory document” or standard, nor is it meant to be used as a checklist.
In September 2015, DTSC released a Draft Stage 1 Alternatives Analysis Guide and scheduled the release of Stage 2 guidance for 2016. Stage 1 of the Alternatives Analysis process will begin with identifying product requirements and chemicals of concern, alternatives, and factors for comparing alternatives. Then, responsible entities will conduct an initial evaluation and screening of alternative replacement chemicals. Stage 1 culminates in the submission to DTSC of the Preliminary Alternatives Analysis Report, including a Work Plan.
After the preliminary report is approved, Stage 2 begins with executing the Work Plan and conducting an in-depth analysis that includes life cycle and economic effects. After an iterative evaluation and comparison process, the responsible entity will select an alternative, based on the information and conclusions generated through the comparative analysis, and recommends a regulatory response. Finally, the responsible entity must submit a Final Alternatives Analysis Report, including an implementation plan and timeline, if applicable. This final report will be available for public review and comment before DTSC makes any determination about regulatory responses.
The draft Guide released this week covers both stages of the Alternatives Analysis process. New chapters of the draft Alternative Analysis Guide, addressing the steps in Stage 2, are as follows:
DTSC is accepting public comments on the draft Alternatives Analysis Guide through January 20, 2017. The agency has also scheduled a public webinar to present and discuss the draft on January 10, 2017.
FTC rules on advertising sunscreen as “all natural.”
/in FTC, Green MarketingThe Federal Trade Commission has ruled that California Naturel, Inc. falsely advertised its sunscreen product as “all natural” in violation of the FTC Act. Despite the company’s “all natural claim,” the sunscreen contains 8% dimethicone, a synthetic substance.
Last week, the Commission issued an order [PDF] prohibiting California Naturel from misrepresenting the ingredients or composition of its products, including whether the product is “all natural” or “100% natural” or any environmental or health benefits of the product. The company must have competent and reliable scientific evidence supporting its claims about the content and ingredients in its products. The Order also requires California Naturel to submit a report to the Commission, within 60 days, detailing its compliance with the Order.
In April, we reported that the FTC proposed settlements with four other personal care product manufacturers and issued an administrative complaint to California Naturel for marketing sunscreen as “all natural” even though it contained dimethicone. California Naturel also advertised that it “uses only the purest, most luxurious and effective ingredients found in nature.” The company did not dispute that the product contained 8% dimethicone, nor that dimethicone is a synthetic ingredient.
According to the Commission’s Opinion [PDF], California Naturel added a disclaimer at the bottom of the product webpage in early 2016, after the FTC began its investigation, stating: “The FTC requires us to add the following: ‘Dimethicone, a synthetic ingredient, is 8% of the sunscreen formula, the remaining 92% are natural products.’” However, the Commission found that the net impression created by California Naturel’s advertising conveyed to consumers that the sunscreen was “all natural.”
The Commission (except for Commissioner Ohlhausen, who dissented in part [PDF]) found that the disclaimer was not sufficiently conspicuous to change the overall message that the sunscreen is “all natural.” In particular, the Opinion criticized the disclaimer’s distance from the product’s “all natural” claims, noting that it was “not visible at all without scrolling down” and “well below the website’s ‘Add to Cart’ button so consumers are invited to purchase the product before they would even see the disclaimer.” FTC has previously issued guidance on online disclosures that urged marketers to place disclosures before “order now” or “add to shopping cart” links.
The Commission was also unpersuaded that the website’s disclosure of the product’s dozens of ingredients rendered the marketing “transparent.” The Commission pointed out:
The Commission concluded that the “all natural” claim was false and misleading because the product contains 8% of a synthetic ingredient. Further, the Commission rejected California Naturel’s proposed defense that there is no regulatory definition specifying the percentage of natural ingredients required to qualify as “natural,” since the company made the express claim that the product is “all natural.”
The Commission’s Opinion is a significant interpretation of the meaning of “all natural” claims, which are not addressed in FTC’s Green Guides guidance on environmental marketing. Here, the Commission cited court cases for the proposition that an “all natural” claim means that the product contains only ingredients found in nature. The Opinion also suggests that a properly qualified “natural,” or “92% natural” claim might have passed muster.
EPA Finalizes Hazardous Waste Improvements Rule
/in RCRAThe Resource Conservation and Recovery Act (RCRA) regulates the generation, treatment, storage, and disposal of hazardous waste. The requirements under RCRA and regulations implementing RCRA can apply to companies that generate hazardous waste during the manufacture of certain products, or, can apply to companies and/or retailers that are ultimately discarding unused, expired, recalled, or damaged products that are considered hazardous upon disposal.
Recent developments under RCRA have the potential to affect both product manufacturers as well as retailers. On October 28, 2016, the EPA Administrator signed the final Hazardous Waste Generator Improvements Rule (Rule), and it was published in the Federal Register on November 28, 2016. This Rule attempts to reorganize the RCRA regulations to make them more user-friendly, address gaps in the current regulations, provide greater flexibility for hazardous waste generators to manage their hazardous waste, and provide the regulated community a better understanding of how the hazardous waste generator regulatory program works.
Some changes to the final Rule include:
The regulation of hazardous waste generation by the retail sector has historically presented a challenge because retailers are not “traditional” hazardous waste generators. EPA highlighted the new flexibility for episodic generators of hazardous waste and the consolidation of VSQG waste at LQGs facilities as two approaches for addressing a number of issues facing the retail sector in complying with RCRA. Indeed, once the new Rule becomes effective, if a VSQG retailer must recall and discard certain products that are classified as hazardous waste when discarded, the retailer can send the hazardous waste to a LQG facility that is considered the same “person,” i.e., the manufacturing facility that owns and operates the retail facility. This allows the consolidation and decision-making process of how to discard the hazardous waste at one (or a few) centralized facilities instead of at multiple (sometimes hundreds) of retail facilities.
There were specific provisions that EPA chose not to include in its final Rule, based on comments received. Some of these include:
The rule will be effective at the federal level six months after promulgation. For those states and territories that are not authorized for the RCRA program (Alaska, Iowa, and the Indian Nations, and the territories Puerto Rico, American Samoa, N. Mariana, and US Virgin Islands), the rule will go into effect on that day. Authorized states will be required to adopt those provisions that are more stringent than the current RCRA generator regulations in order to retain their authorized status. However, these provisions of the rule will not become effective in states authorized for the RCRA program until states have adopted the rule and become authorized for the new provisions. Authorized states will not be required to adopt those provisions of the rule that are less stringent or equal to the current hazardous waste regulations.
Lautenberg Act: EPA names ten Work Plan chemicals for initial risk evaluations.
/in Risk Assessment, TSCA, TSCA ReformThe U.S. Environmental Protection Agency (EPA) has announced the ten Work Plan chemicals for review under the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which updated the Toxic Substances Control Act (TSCA). Yesterday, the agency released the list of substances, which will be the first to undergo risk evaluations under the new law. The list is mainly made up of flame retardants and industrial solvents, many of which are used in consumer products, as well as asbestos, the notoriously carcinogenic mineral used in building materials.
The chemicals are:
Under the Lautenberg Act, EPA must select ten chemicals from the 2014 Work Plan by December 19, 2016. The Work Plan contains 90 chemicals with potential for high hazard and exposure, as well as considerations including persistence and bioaccumulation. The agency notes that in choosing the ten chemicals, it “took into account recommendations from the public, industry, environmental and public health groups, and members of Congress and tried to give weight to chemicals where work on assessing risks were underway.”
Among the listed chemicals, EPA has already completed risk assessments for methylene chloride, NMP, and TCE, and taken early steps towards assessments for 1,4-Dioxane and the Cyclic Aliphatic Bromides. For methylene chloride, NMP, and TCE, the agency plans to proceed with Section 6(a) rulemaking for the limited uses defined for the completed risk assessments; the chemicals’ remaining uses will now be newly evaluated. The ongoing rulemaking for these chemicals were included as “Immediate Actions” in EPA’s First Year Implementation Plan for the Lautenberg Act.
The reformed TSCA requires that EPA evaluate existing chemicals to determine whether they “present an unreasonable risk of injury to health or the environment.” The list’s publication in the Federal Register will trigger the three-year statutory deadline for completing the risk evaluations. In the next six months, EPA must release a scoping document for each chemical. The remaining 80 Work Plan chemicals will also be reviewed, as the law requires EPA to begin a new evaluation for every completed evaluation, with half of all EPA-initiated evaluations drawing from the Work Plan list until it is exhausted. In addition, EPA must have at least 20 chemical risk evaluations ongoing by the end of 2019.
Environmental groups mostly praised the decision to prioritize asbestos, a fire-resistant material that causes mesothelioma cancer which outgoing Senator Barbara Boxer (D-CA) called “the poster child for TSCA reform.” However, Earthjustice criticized EPA’s failure to include lead, citing children’s exposure to the neurotoxin via “ongoing, unnecessary uses of lead in consumer products.”
In a statement, the American Chemistry Council emphasized that a chemical’s inclusion in the list was only the first step in a process based on high quality data and the weight of scientific evidence. The industry group also said “it is imperative that EPA engage stakeholders early and often throughout the risk evaluation process, including through peer review and public comment.”
Flurry of Lautenberg Act rulemaking actions begin.
/in TSCAA series of rulemaking actions have begun to implement the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act), which recently modernized the Toxic Substances Control Act (TSCA). Last week, the Office of Information and Regulatory Affairs (OIRA), within the Office of Management and Budget (OMB), received two key proposed rules from the U.S. Environmental Protection Agency (EPA). The proposed rules, which are not yet publicly available, establish the process for prioritization and risk evaluation under the Lautenberg Act changes to TSCA’s framework. The prioritization process rule will establish procedures and criteria for designating chemicals as either “high priority” or “low priority.” The risk evaluation rule sets out the process for evaluating risks in “high priority” chemicals.
According to EPA’s First Year Implementation Plan, the agency’s goal is to publish these proposed rules in mid-December. Finalization of both rules is required by mid-June 2017, the deadline set by the law. The Plan also set mid-December 2016 as a milestone for publishing proposed rules for inventory reporting and fees. In addition, the Lautenberg Act requires the agency to release the list of ten Work Plan chemicals chosen for initial risk evaluations by the same time.
EPA names five PBT chemicals for expedited action.
/in TSCAYesterday, the U.S. Environmental Protection Agency (EPA) announced that five chemicals will be subject to expedited action under the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which overhauls the Toxic Substances Control Act (TSCA). The affected chemicals and their uses, as described by EPA, are:
Last month, we wrote that as required by the Lautenberg Act, EPA would fast-track the regulation of certain persistent, bioaccumulative, and toxic (PBT) chemicals unless manufacturers nominated them for risk evaluation by September 19. Two of the seven PBT chemicals, which are used in fragrance mixtures, Ethanone, 1-(1,2,3,4,5,6,7,8-octahydro-2,3,5,5-tetramethyl-2-naphthalenyl) and Ethanone, 1-(1,2,3,4,5,6,7,8-octahydro-2,3,8,8-tetramethyl-2-naphthalenyl), were nominated for risk assessment.
Under the Lautenberg Act, EPA must skip conducting risk assessments for these five chemicals and take expedited action to reduce exposure to the extent practicable. The agency will first determine “where these chemicals are used and how people are exposed to them” before proposing limitations on use. According to agency guidance, EPA may restrict the chemicals in one or more of the following ways:
EPA must propose expedited actions for these chemicals by June 22, 2019, and final rules must be issued within the following 18 months.
Ninth Circuit rules on “all natural” food claims.
/in FDA, Green MarketingLast week, the Court of Appeals for the Ninth Circuit reversed in part and affirmed in part orders issued by a district court judge in a putative class action case involving “all natural” claims made by Dole Foods. In Brazil v. Dole, No. 14-17480 (9th Cir. Sept. 30, 2016), the plaintiff, Chad Brazil, alleged that Dole’s “All Natural Fruit” labels for packaged fruit products were deceptive under the California Unfair Competition Law (UCL), California False Advertising Law (FAL), and California Consumer Legal Remedies Law (CLRA).
The plaintiff claimed that the labels were deceptive because the products contain synthetic citric and ascorbic acid, citing evidence including informal policy issued in 1993 by the federal Food and Drug Administration (FDA), as well as more recent FDA warning letters to food sellers making similar claims (“100% Natural” or “All Natural”). The FDA’s informal policy [PDF] states that a “natural” claim on a food label is truthful and non-misleading when “nothing artificial or synthetic… has been included in, or added to, a food that would not normally be expected in the food.” In the warning letters, FDA described “natural” claims as deceptive because the food products included synthetic citrus acid, among other substances.
Upon appeal, the Ninth Circuit affirmed the lower court’s order decertifying the class because the plaintiff failed to show how to calculate the price premium with proof common to the class. The Court also affirmed the dismissal of the plaintiff’s claims for the sale of “illegal products.”
However, the Ninth Circuit reversed the district court’s granting of summary judgment on the merits of Brazil’s claims. The Court held that the evidence presented “could allow a trier of fact to conclude that Dole’s description… is misleading to a reasonable consumer.” Interestingly, the Court noted that the FDA warning letters “did not always rely on the limitation that an artificial or synthetic product would ‘not normally be expected to be in the food’ – and, in fact, asserted that foods that naturally contain citric acid (such as tomatoes) may not be labeled ‘all natural’ if synthetic citric acid is added to them.”
While unpublished, the Ninth Circuit’s opinion [PDF] may prove consequential because it suggests how the Court may interpret “natural” claims in the future. In addition, a number of other cases involving “natural” claims have been stayed while this case has been pending and the plaintiff’s bar may be emboldened to pursue further litigation.
The case has been remanded to the lower court to allow the plaintiff “injunctive relief on behalf of the class and his remaining individual claim for restitution.”