U.S. Supreme Court Extends Sarbanes-Oxley Whistleblower Protection to Employees of Privately-Held Companies

Public Policy • Tags: , , , ,

By Elliot Belilos

On March 4, 2014, the U.S. Supreme Court ruled in Lawson v. FMR LLC, No. 12-3 that “whistleblower” protection under the Sarbanes-Oxley Act of 2002 extends to the employees of a public company’s private contractors and subcontractors.

The Sarbanes-Oxley Act was enacted in the wake of the Enron scandal largely to protect investors in public companies and to restore trust in financial markets.  Among other things, Sarbanes-Oxley protects “whistleblowers,” providing that: “No [public] company…or any…contractor [or] subcontractor…of such company, may discharge, demote…[or] discriminate against an employee in the terms and conditions of employment because of [whistleblowing activity].” 18 U.S.C. § 1514A (a).  There are other Sarbanes-Oxley provisions, however, that directly affect more than simply public companies, notably changes to the criminal code enhancing penalties for all mail and wire fraud.

The extent to which Sarbanes-Oxley governs private companies continues to develop.  In Lawson, the plaintiffs, former employees of a private company that contracted with publicly-traded mutual funds, alleged that their employer, FMR LLC, retaliated against them for reporting alleged fraud by an FMR client.  The district court rejected FMR’s argument that the Sarbanes-Oxley protects only employees of public companies. On appeal, a divided panel of the First Circuit reversed, finding that while FMR was a contractor under § 1514A, that provision only protected public company employees.

The Supreme Court reversed in a 6-3 decision, holding that “§ 1514A extends whistleblower protection to employees of privately held contractors who perform work for public companies.”   The Court found that “clear from the legislative record is Congress’ understanding that outside professionals bear significant responsibility for reporting fraud by the public companies with whom they contract, and that fear of retaliation was the primary deterrent to such reporting by the employees of Enron’s contractors.”

Justice Ginsburg delivered the opinion of the Court, in which Chief Justice Roberts and Justices Breyer and Kagan joined. Justice Scalia, joined by Justice Thomas, filed an opinion concurring in principal part and concurring in the judgment. And Justice Sotomayor filed a dissenting opinion, in which Justices Kennedy and Alito joined.

Following the Lawson decision, privately held companies should carefully review their policies to ensure that they protect employees from retaliation for the reporting of fraud or other dishonest behavior by their customers and clients, especially customers and clients that are public companies.

Good Reprint Practices Revamped

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By Casper E. Uldriks

The Food and Drug Administration (FDA) issued a revised draft guidance document in February 2014 entitled, “Guidance for Industry: Distributing Scientific and Medical Publications on Unapproved New Uses – Recommended Practices.”  The guidance updates the draft guidance issued in January 2009 entitled, “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.”   The Food and Drug Modernization Act (FDAMA)  (21 U.S.C. § 360aaa) amended the Food, Drug, and Cosmetic Act (FD&C Act) to include the regulatory conditions under which a reprinted published medical or scientific article may be distributed by a manufacturer to healthcare professionals and related healthcare businesses.The regulatory issue continues even though the FDAMA amendment is no longer in effect.

The purpose of establishing Good Reprint Practices was to describe the conditions under which medical or scientific literature concerning off-label use of a drug, biologic or medical device could be distributed without prompting FDA to say the information misbranded a product that has an approved use.  The Good Reprint Practices created a “safe harbor” for off-label use information that would otherwise be prohibited based on a misbranding charge.  Manufacturers must heed the guideposts of “should” and “should not” when navigating within the safe harbor.

FDA uses several factors to determine whether or not a medical or scientific journal article stays within the safe harbor. By following FDA’s guidance on what a manufacturer should and should not do, FDA will not use the dissemination of the reprinted medical or scientific article as evidence of a manufacturer’s intent to promote and market an off-label use.

A manufacturer should consider the following before it disseminates a reprint of a medical or scientific article about an unapproved use:

1. The article should be published by an entity with an independent editorial board with relevant expertise and objectivity.

2. The editors, authors and contributors associated with the article are subject to full disclosure of a conflict of interest based on a publicly stated policy.

3.  The article should be peer-reviewed under the publishing organization’s established procedures.

4.  The article should appear in its unabridged form.

5.  The article should describe the information in the context of being derived from adequate and well-controlled clinical investigations.

6.  The article should be disseminated with the product’s approved labeling.

7.  A comprehensive bibliography should be disseminated with information from other publications that is contrary to the results.

8.  The article should not be used in conjunction with or associated with any other promotional literature or activity.

The following are steps that a manufacturer should not take when disseminating a medical or scientific article about an unapproved use:

1. It should not be funded to any degree by one or more of the manufacturers’ products that are related to the article’s subject.

2.  It should not be altered to highlight, emphasize or promote an unapproved use.

3.  It should be disseminated primarily by the manufacturer as opposed to through an independent distribution channel.

4.  It should not be written, edited, excerpted, significantly influenced or published for, or at the request of, the manufacturer.

5. The article should not be attached to other specific product information.

In addition to the above steps that a manufacturer should and should not take, FDA also looks at the context in which the information is provided.  For example, the article should not be placed in proximity of the manufacturer’s products and promotional literature at a trade show for products it markets legally.  The reprint should be marked with a disclosure about the manufacturer’s interest in the product and state that the off-label use has not been approved by the FDA.   Financial conflicts of interest on the part of the manufacturer, author and any entity affiliated with the author are a major concern.  Conflicts of interest should be fully disclosed.  Likewise, the source of funding for the medical or scientific study should be identified.

Apart from providing a safe harbor for medical and scientific information about off-label use, there are practical professional considerations that involve the off-label use of the product for treating patients.  The manufacturer should provide what information it has regarding the risks associated with the unapproved use and include precautionary information and warnings that are already associated with the product.

The boundaries for FDA’s safe harbor are not new.  FDA started to develop the concepts for Good Reprint Practices in 1997 in response to FDAMA.  The updated draft guidance serves to illustrate how manufacturers should avoid creating false or misleading or otherwise violative information, even under the guise of professional education.  The safe harbor raises questions about the information itself, how and where it is disseminated and any conflicts of interest that may be associated with the reprinted article.

“Evaporated Cane Juice” — Comment Period Reopened

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By Michael J. O’Flaherty and Stewart D. Fried

“Evaporated cane juice” is an ingredient name for a sweetener often seen in food labeling.

In October 2009, FDA issued a draft guidance document, essentially advising industry of FDA’s view that the common or usual (C/U) name for the solid or dried form of sugar cane syrup is “dried cane syrup,” and that a sweetener derived from sugar cane syrup should not be declared on food labels as “evaporated cane juice” because that name falsely suggests the sweetener derives from a juice.  See generallyDRAFT Guidance for Industry: Ingredients Declared as Evaporated Cane Juice (Oct. 2009).  FDA premised its guidance on a regulatory definition of “juice”:

Juice means the aqueous liquid expressed or extracted from one or more fruits or vegetables, purees of the edible portions of one or more fruits or vegetables, or any concentrates of such liquid or puree.

21 C.F.R. § 120.1(a).  The original comment period on the guidance document closed in December 2009.

FDA’s regulations provide general requirements for C/U names to be used in the labeling of foods.  The C/U name must describe the basic nature of the food or its characterizing properties or ingredients.  Moreover, the C/U name must be uniform among all identical or similar products and may not be confusingly similar to the name of any other food that is not encompassed within the same name.  21 C.F.R. §102.5(a).

A substantial number of class action lawsuits have been filed, largely in California, against food manufacturers under state law, consumer protection theories, contending that the manufacturer misled consumers by using “evaporated cane juice” on the label.  Food manufacturers have had varying success in obtaining dismissal of such claims.  Although none of the cases has gone to trial yet, several settlement classes have been approved.  E.g., Singer v. WWF Operating Co. d/b/a Whitewave Foods, Case No. 1:13-cv-21232 (S.D. Fla.).

FDA has reopened the comment period on its guidance document.  79 Fed. Reg. 12,507 (Mar.5, 2014).  The agency invites comments, in particular, on the following matters:

  • What is the basic nature and characterizing properties of the ingredient sometimes declared as “evaporated cane juice”?  How is this ingredient produced?  How is its method of manufacture different from that of other sweeteners made from sugar cane (e.g., cane sugar, cane syrup, etc.)?  How does it compare with such other sweeteners?  Is there a uniform industry standard for this ingredient as traded in the marketplace?
  • Does the name “evaporated cane juice” adequately convey the basic nature of the food and its characterizing properties or ingredients, consistent with the principles in § 102.5(a)?  How does the name “evaporated cane juice” square with the principle that the name of a food may not be confusingly similar to the name of any other food that is not encompassed within the same name, given the significant differences in source and composition between this ingredient and beverages that are regulated as “juice” (e.g., orange juice and tomato juice)?
  • How is “evaporated cane juice” similar to, or different from, other sugars and syrups derived from sugar cane (e.g., raw sugar, cane sugar, cane syrup, demerara sugar, muscovado sugar, turbinado sugar, etc.) in terms of basic nature and characterizing properties or ingredients?  Considering that the ingredient is used as a sweetener derived from sugar cane, what would be the rationale for establishing a C/U name that identifies this ingredient as a “juice,” rather than as a “sugar” or “syrup,” and how would such an approach square with the principle that C/U names should be uniform and consistent among similar foods?
  • Applying the principles for C/U names in § 102.5, in what way does “dried cane syrup” fail to identify or describe this substance’s basic nature or characterizing properties or ingredients?

Data and other information submitted in support of comments are (of course) helpful.  Comments should be submitted by May 5, 2014.

Tune up and Be Ready – A Practice Tip from Dr. Doom

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By Barbara J. Masters, D.V.M.

FSIS has indicated that based on some recent “negative events;” they will be increasing verification activities.  Increased verification should not mean increased noncompliance.  We should do what we say we are going to do and document that we did it—each and every time.

That said, we all know life isn’t always perfect.  Therefore, I would encourage everyone to use this opportunity to “dust off” and get ahead of the increased verification activity.

It is important to rotate, and use a different person to do verification. You may rotate between departments or, if you have more than one location, rotate between locations.  Different eyes see different things.

Use the FSIS food safety assessment tools as a “checklist” to measure against.  See FSIS Directive 5100.1.

Be certain that your team is implementing the food safety programs as intended.  But also use this as an opportunity to look at the design of the programs.  Are the programs still doing today what you originally designed them for?  Have you changed ingredients or processes that may impact your hazard analysis?

Have supervisory personnel come in during pre-op?  Is the cleaning crew adequately covering the surface of equipment with sanitizer?  Are they overspraying with high pressure hoses after areas have been cleaned?  Is there cross traffic between raw and ready to eat – equipment or people?  Remember, pre-op is as important as operations!

If you slaughter animals and receive them at odd hours, supervisory personnel should also randomly visit during these times as well.  Is animal handling as expected?  If you have cameras for remote auditing, have you changed the areas for review so no one becomes comfortable with where the cameras are reviewing?

Use the results of these “mock FSAs” and supervisory visits to see if there are any vulnerabilities in your system that need to be addressed.  If so, these should be addressed as soon as possible.

By conducting a “tune up,” you will be ready for the additional verification activities that FSIS will be conducting.

About “Dr. Doom”

Mixed in with the attorneys at OFW Law is the former USDA Food Safety Inspection Service’s (FSIS) Administrator, Dr. Barbara Masters.  Dr. Masters is a veterinarian who spent eighteen years with FSIS – the final three years as Acting Administrator and Administrator.  During her rise to the Administrator’s position, Dr. Masters served as the Deputy Assistant Administrator for Office of Field Operations.  While in these key leadership positions at FSIS, Dr. Masters’ primary focus was on the implementation of science-based policies for the protection of public health.  Dr. Masters issued the initial Federal Register Notices for a systematic approach to humane treatment of livestock and poultry.

Dr. Masters was involved in the drafting of the training of inspection personnel on the Hazard analysis and critical control points (HACCP) and Sanitation Standard Operating Procedures (SSOP) regulations.  She was the lead of the FSIS HACCP Hotline.  In addition, Dr. Masters provided technical review for establishment’s hazard analysis, HACCP plans and supporting documentation.  She started her career at FSIS as a public health veterinarian that had responsibilities for ante-mortem inspection, sanitation inspection and all post-mortem inspection responsibilities.  She has a good understanding of what happens at the in-plant location, because she has spent many of long days working there.

Federal Crop Insurance Sets Prices for Corn, Wheat, Cotton, and Soybeans

USDA • Tags: , ,

By Kenneth D. Ackerman

This week, USDA’s Federal Crop Insurance Corporation (FCIC) announced its projected prices for all FCIC crop insurance policies with March 15 sales deadlines for the 2014 crop year, including:

  • Corn: $4.62 per bushel;
  • Cotton: $0.78 per pound;
  • Soybeans: $11.36 per bushel; and
  • Wheat: $6.51

Projected prices were also announced for barley, canola, grain sorghum, popcorn, durum wheat and organic practices of several of these crops.  Here is a full list of the newly-announced FCIC prices.

These projected prices — based on trading values of futures contracts at the Chicago Board of Trade (CBOT) and the InterContinental Exchange, Inc. (ICE) — will be used to calculate any 2014 indemnities for these crops, whether based on loss of production or loss of revenue. Farmers will now have until Monday, March 17, to contact their local crop insurance agents and obtain coverage for the year.

GE To The Rescue

Public Policy, USDA • Tags: , , , , , , , ,

By John R. Block

It’s not new news to report that genetically engineered (GE) products are under assault. We are in free trade talks with Europe. The EU public is adamantly opposed to GE food. There are bills in 23 of our state legislatures to label foods that contain GE products. The naysayers have a loud voice.

However, you don’t hear a whisper out of them opposing genetically engineered medicines. Biotech health products have exploded. Totally unacceptable. Where is the logic?

Ring spot virus was devastating the Hawaiian papaya industry. To the rescue came Rainbow – a product genetically modified to resist ring spot. If you go to Hawaii, you will be served GE papaya.

Cultivation of virus resistant papayas in HI: On the left, rows of conventional papaya trees infested with the Ringspot Virus. On the right, GM virus-resistant plants of the variety "Rainbow."

Cultivation of virus resistant papayas in HI: On the left, rows of conventional papaya trees infested with the Ringspot Virus. On the right, GM virus-resistant plants of the variety “Rainbow.”

Now, we face another challenge – much more widespread and closer to home. The orange industry is under assault by an expanding bacterium. This new bacterium started infecting our citrus crop about 10 years ago. Citrus is threatened in a number of states, including Georgia, South Carolina, Texas, California, and especially Florida. Millions of orange trees have been destroyed, cutting Florida citrus production to the lowest level since 1969.

Researchers are working frantically to find a solution to the “citrus greening” disease. Today, there is no known cure.

The last thing the industry wants to do is turn to genetic engineering to save their apples (oh, I mean oranges). However, Texas A&M University is coming to the rescue. They are introducing “spinach genes” into citrus trees to provide the citrus resistance.

Field trials are under way to give birth to a new GMO. This is not a done deal yet, but if proven successful, the next challenge will be to get public acceptance of GE orange juice. Maybe GE could save our oranges as GE saved the papaya.

Eventually, the public will come to appreciate the true value of this advanced science. They will come to accept the safety of the product.

GMOs have been subjected to more testing worldwide than any other products. They are safe, according to such well-respected organizations as the World Health Organization, the National Academy of Sciences and the European Food Safety Authority.

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.

Environmentalists, Glyphosate and Butterflies

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By John G. Dillard

The Natural Resource Defense Council (NRDC) has petitioned EPA to restrict the use of glyphosate herbicide to protect the dwindling population of the monarch butterfly. The petition states that the rapid adoption of glyphosate-resistant (Roundup Ready®) corn and soybeans in the Midwest has depleted the milkweed “community,” which serves as the exclusive food source for monarch butterfly larvae along the route of its annual migration from Canada to Mexico.

NRDC petitioned EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). FIFRA requires EPA to register each pesticide used in the U.S. and set parameters for the pesticide’s use, such as target species, labeling requirements, and restrictions on use. Each pesticide must undergo a re-registration process every 15 years. The current glyphosate re-registration process will be completed in 2015; however, NRDC has requested EPA take action to restrict the use of glyphosate prior to the scheduled completion of the re-registration process.

Under FIFRA, EPA can register a pesticide only if it first determines that the pesticide “will perform its intended function without unreasonable adverse effects on the environment.” FIFRA defines an unreasonable adverse effect on the environment to include “any unreasonable risk to . . . the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide.” In its petition, NRDC argues that the loss of milkweed communities brought about by increased glyphosate use has brought about unreasonable adverse effects on the environment because it has decreased monarch butterfly habitat.

Read the rest of this post on John Dillard’s AgWeb.com blog – Ag in the Courtroom.

FDA Proposes Major Changes to the “Nutrition Facts” Label – Price Tag $2 Billion 1

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By Bruce Silverglade

Two billion dollars – That is what FDA estimates the food industry will spend to comply with proposed changes to the iconic “Nutrition Facts” label.  That’s about all we know for sure.  The agency says the new information will provide $20-$30 billion in benefits to consumers by the year 2035, primarily by lowering risk of diet-related diseases and associated health care costs.  Similar predictions were made when FDA finalized its original regulations for nutrition labeling in 1994, but they didn’t materialize.

FDA surveys showed many consumers did not understand the new information.  Some thought they should strive to consume 100% of the Daily Value of each of the nutrients listed on the label.  The 1994 launch of the Nutrition Facts label triggered an onslaught of new “low fat” foods.  While these products met FDA’s new requirement for “low fat” claims, many of the products were not lower in calories.  Some consumers thought they could eat the whole box!  Obesity increased.

To be effective, consumers have to actually read the Nutrition Facts label, comprehend the information, change their purchasing decisions based on the information, develop new eating patterns, engage in physical activity, and avoid other lifestyle choices that would negate the improvements they make to their diets.  No study has shown that the Nutrition Facts labels do that.

Hopefully, as the saying goes, the second time is the charm.

FDA’s proposed rule to update the Nutrition Facts label, along with other proposed rules on changes to serving sizes, were released today and will publish in the Federal Register on March 3rd.

So how exactly is FDA proposing to change the Nutrition Facts label? A picture tells a thousand words.  Here are some before and after versions provided by the agency.  The two versions may look similar, but there are actually some major differences:

Highlights include:

Changes in Required Nutrients

  • “Added Sugars” (amount, not %DV) would be required to be declared.  This may be the most controversial change in FDA’s proposal.
  •  “Calories from Fat” would no longer be required.
  • “Fiber” as listed on the label would be redefined to exclude purified, processed fibers, such as maltodextrin and inulin.
  • Insoluble fiber may be declared voluntarily (but disclosure becomes mandatory if a claim is made).
  • Vitamins and minerals – FDA is proposing to require declaration of Vitamin D and Potassium because of concern that Americans are not consuming enough of these micronutrients.  Declaration of vitamins A and C would become optional.  FDA would also require the amount, as well as the %DV, for vitamins and minerals.

Changes in Format

  • The size of the “Calories” and “Servings Per Container” declarations would increase substantially to emphasize this information.
  • %DV’s would move from the right hand to the left hand side of the box, also to give this information greater prominence.
  • The footnote about DV’s would be shortened.  As of this time, the agency has not said exactly how.

Changes in Daily Values

  • The DV for Sodium would decrease slightly from 2,400 mg to 2,300 mg.
  • The DV for fiber would be updated to 28 g.

RACC’s and Serving Sizes

  • FDA would update 17% of the reference amounts customarily consumed (RACCs) to reflect more recent consumption data; most would increase.  This would likely mean larger serving sizes for many food products.  For example, the RACC for ice cream would increase from ½ cup to 1 cup.
  • 27 new RACCs would be created for food products that previously did not have one.
  • Certain larger packages would have to be labeled both per serving and per package.  For example, a 24-ounce bottle of soda, a 19-ounce can of soup and a pint of ice cream would have to be labeled in a dual column format—per serving and per package—if the package contains at least two times the serving size and less than or equal to four times the serving size.
  • For a package more than four times the RACC, the dual column listing would not be required.

The proposed rule does not include some changes that FDA reportedly had been considering.

  • FDA is not proposing to establish a DV for added or total sugars;
  • FDA is not proposing to amend its nutrient content claim or health claim regulations to take into account a food’s “added sugars” content;
  • FDA is not proposing any change to the 0.5 gram threshold for declaring “Trans Fat” and is not proposing a Daily Value for trans fat; and
  • FDA is not proposing any regulations on the use of front-of-pack nutrition rating symbols.  Such labeling, including grocery store shelf-markers, will remain subject to FDA’s 2009 enforcement policy on the matter.

There will be a 90-day comment period, which industry members should take full advantage of, given the $2 billion price tag.

A Consumer Group Files Suit to Vacate FDA’s GRAS Notification Program

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By Mark L. Itzkoff

In a formal challenge to FDA’s GRAS Notification Program, a consumer group called the Center for Food Safety (CFS) filed a lawsuit on Thursday alleging that FDA’s operation of the program under a proposed rule since 1997 and its failure to promulgate a final rule governing the program is a violation of the Administrative Procedures Act (APA).  The suit asks the court to vacate the proposed rule creating the GRAS Notification Program and “reinstat[e] the GRAS rule previously in force” (i.e., the GRAS affirmation rule) until FDA properly promulgates a GRAS notification final rule.

The lawsuit is the latest in a number of attacks on the GRAS Notification System over the past year.  As we noted in earlier posts (see here, here, and here), the GRAS notification system has been the subject of recent criticism by The Pew Charitable Trusts and the Natural Resources Defense Council (NRDC).  While the earlier criticisms questioned the validity of GRAS determinations in general or raised issues regarding the adequacy of specific GRAS notifications, the CFS suit is the first attempt to invalidate the GRAS Notification Program entirely.  Also, while this may seem to be a coordinated attack on the GRAS system by consumer groups, it is just as likely a case of different consumer groups jockeying for position (and for public attention and funding) on a hot issue.

In the lawsuit, CFS notes that the current GRAS Notification Program was proposed by FDA over 15 years ago.   Substances Generally Recognized as Safe, 62 Fed. Reg. 18938 (April 17, 1997)(GRAS Proposal).  The agency continues to operate the program under that proposed rule, and no final rule has been issued.  CFS had filed comments on the proposed rule under its previous name, International Center for Technology Assessment (ICTA), and claims that its procedural due process rights were violated “by FDA’s decision to implement a rule without following the notice-and-comment rulemaking procedures mandated by the APA.”  However, while FDA continues to operate under the proposed rule, the agency did reopen the comment period and discuss possible changes in the program in 2010.

The lawsuit also claims that under the current system, “several substances … have achieved GRAS status” that may pose serious risks to consumers, including Volatile Oil of Mustard, Olestra and mycoprotein (“Quorn”).  CFS claims that FDA’s alleged failure to comply with the APA has exposed the public, including CFS, to “risky products” without proper FDA oversight.

On the surface, the new lawsuit appears to be similar to the lawsuit filed by CFS in 2012, Center for Food Safety v. Hamburg, No. C 12-4529 PJH, 2013 WL 1741816 (N.D. Cal. Apr. 22, 2013), asking the federal courts to compel FDA to issue regulations implementing the Food Safety Modernization Act (FSMA).  In response to that suit, the federal court ordered FDA to comply with a specific timeline and issue the regulations by the dates specified in that timeline.

However, the new lawsuit is based on a significantly different statutory requirement that may result in a different decision.  FSMA required that FDA issue implementing regulations by certain statutory deadlines.  In essence, CFS simply asked the court to enforce those statutory deadlines.  By contrast, federal law does not require that FDA establish a GRAS Notification Program, much less establish any deadline for promulgating the regulations governing that program.

Finally, we note that CFS claims that FDA is unlawfully “exempting substances that are [GRAS] from regulation as food additives …” This is a mischaracterization of the agency’s response to GRAS Notices.  GRAS substances are exempt from FDA premarket scrutiny under the provisions of the Federal Food, Drug and Cosmetic Act because they meet certain statutory criteria, see 21 USC §321(s) and §342(a)(2)(C)(1).  Unlike food additive approval, GRAS status does not require FDA action.

For this reason, FDA does not issue exemptions under the GRAS Notification Program.  Rather, the agency “evaluate[s] whether the submitted notice provides a sufficient basis for a GRAS determination and whether information in the notice or otherwise available to FDA raises issues that lead the agency to question whether use of the substance is GRAS”  GRAS Proposal, 62 Fed. Reg. at 18938.

Regardless of the outcome of this case, GRAS status and some sort of FDA program for recognizing GRAS status are not going away.  That is because, as noted above, the GRAS exemption from the definition of “food additive” is written into FDA’s governing statute.  It would require legislation to change that.

FNS Seeks Comments on Proposed Rule Establishing Stronger Requirements for Local School Wellness Policies; Rule Also Proposes to Limit Marketing of Foods in Schools

Public Policy, USDA • Tags: , , , , , , , , , , , , ,

By Roger R. Szemraj

The Food and Nutrition Service (FNS) today published its proposed rule regarding Local School Wellness Policy under the Healthy, Hunger-Free Kids Act of 2010 (the proposed rule) in the Federal Register.    The proposed rule is a result of Section 204 of the Healthy, Hunger-Free Kids Act of 2010, which added a new section 9A to the Richard B. Russell National School Lunch Act (the NSLA) to require that each local educational agency participating in a program authorized by this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall establish a local school wellness policy for all schools under the jurisdiction of the local educational agency.

The proposed rule would:

  • Establish the framework for the content of the local school wellness policies;
  • Ensure stakeholder participation in the development of such policies;
  • Require periodic assessment of compliance and reporting on the progress toward achieving the goals of the local school wellness policy;
  • Require local educational agencies, as part of the local school wellness policy, to implement policies for the marketing of foods and beverages on the school campus during the school day consistent with nutrition standards for Smart Snacks; and
  • Require each local educational agency to make information about local school wellness policy implementation for all participating schools available to the public on a periodic basis.

The goal of the proposed rule is to ensure local educational agencies establish and implement local school wellness policies that meet minimum standards designed to support a school environment that promotes sound nutrition and student health, reduces childhood obesity, and provides transparency to the public on school wellness policy content and implementation.

While comments are welcome regarding all aspects of the proposed rule, the notice asks for comments on certain subjects in particular, including:

  • That Local Education Agencies (LEAs) include in their local wellness plans policies that allow marketing of only those foods and beverages that may be sold on the school campus during the school day, i.e., those foods and beverages that meet the requirements set forth in the Smart Snacks interim rule (or the more restrictive standards adopted by the LEA, if applicable);
  • The definition of food marketing, which commonly includes oral, written, or graphic statements made for the purpose of promoting the sale of a food or beverage product made by the producer, manufacturer, seller, or any other entity with a commercial interest in the product;
  • Whether the annual frequency of the progress reporting would serve to ensure local school wellness policies and school-based activities are communicated to parents and the community without being overly burdensome to LEAs;
  • Whether the 3-year frequency of the assessment of local school wellness policies would serve to ensure these policies are kept up-to-date without being overly burdensome to LEAs;
  • The specific areas that should be included in the components of an effective assessment of compliance by schools and determining progress toward benchmarks, objectives and goals;
  • Record and reporting requirement costs for local school wellness policies;
  • Information collection requirements imposed by the proposed rule; and
  • Any current Tribal laws that would be in conflict with the proposed rule.

Comments on the proposed rule are due on or before April 28, 2014, and can be submitted in two ways:

Julie Brewer, Chief

Policy and Program Development Branch

Child Nutrition Division

Food and Nutrition Service

Department of Agriculture

P.O. Box 66740

Saint Louis, MO, 63166-6740

Comments regarding the information collection requirements should be sent to:

Office of Information and Regulatory Affairs,

Office of Management and Budget

Attention: Desk Officer for FNS

Washington, DC 20503.

A copy of these comments regarding information collection requirements should also be sent to:

Lynn Rodgers, Chief

Program Monitoring Branch

Child Nutrition Programs

3101 Park Center Drive

Alexandria, VA 22302