On October 4, 2013, Jason Klinowski will join Daniel Shaw – Vice President, Deputy General Counsel at H.J. Heinz Company – to address food recalls and to discuss practical tips and best practices for preventing common pitfalls and minimizing downstream litigation exposure. Please…
As reported by Food Safety News on April 11, 2013, the Obama administration is “seeking a significant increase in funding at the U.S. Food and Drug Administration to help the agency implement the monumental Food Safety Modernization Act.” Obama Administration Seeks FDA Funding…
On April 11, 2013, United Fresh Produce Association, on behalf of almost 90 separate produce industry groups, formally petitioned the FDA to enlarge the May 16, 2013 deadline for submitting industry comments to the proposed Produce Safety and Preventative Controls Rules under FSMA. United…
On April 2, 2013, the FDA issued a Notice extending the comment period on the Institute of Food Technologists’ findings and recommendations to the FDA for the improvement of tracking and tracing food under FSMA. The new deadline to submit comments on the IFT’s report is July 3,…
As reported by The Packer (and announced by the FDA), “the FDA is reopening the comment period for a draft risk assessment for certain food facilities that include farm packing operations for fresh fruits and vegetables.” See FDA Reopens Comment Period on Food Facilities.
The FDA recently issued a revised industry guidance document titled: What You Need to Know About Administrative Detention of Foods Small Entity Compliance. Utilizing a question and answer format, this industry guidance document contains some valuable information. Here are some of the highlights you need to know:
Why is administrative detention needed?
Administrative detention provides a means through which FDA can hold adulterated or misbranded food and prevent it from reaching the marketplace, thus further enhancing FDA’s ability to ensure the safety of food for U.S. consumers.
What food is subject to administrative detention?
The term food refers to (1) articles used for food or drink for man or other animals, (2) chewing gum, and (3) articles used for components of any such article (section 201(f) of the FD&C Act [21 U.S.C. § 321(f)]). The term food also refers to dietary supplements, which are to be treated as food under the FD&C Act (section 201(ff) [21 U.S.C. § 321(ff)]).
How long may FDA administratively detain an article of food?
FDA may detain an article of food for a reasonable period, not to exceed 20 calendar days, after the detention order is issued. However, an article of food may be detained for 10 additional calendar days if a greater period of time is required to institute a seizure or injunction action. The entire detention period may not exceed 30 calendar days (21 CFR 1.379).
What criteria does FDA use to order an administrative detention?
An officer or qualified employee of FDA may order the administrative detention of any article of food that is found during an inspection, examination, or investigation under the FD&C Act if the officer or qualified employee has reason to believe that the article of food is adulterated or misbranded (21 CFR 1.378).
May an administratively detained article of food be delivered to another entity or transferred to another location?
It is a prohibited act under section 301(bb) of the FD&C Act [21 U.S.C. 331(bb)] to transfer an article of food subject to an administrative detention order and/or to alter or remove any mark or label that identifies an article of food as administratively detained.
Can an administrative detention order be modified?
FDA may approve a request for modification of an administrative detention order to allow for the destruction of the article of food or movement of the detained article of food to a secure facility, to maintain or preserve the integrity or quality of the article of food, or for any other purpose that the authorized FDA representative believes is appropriate in the case (21 CFR 1.381(c)).
What’s the difference between an import detention and administrative detention?
FDA’s authority to administratively detain food under section 304(h) of the FD&C Act [21 U.S.C. 334(h)] is separate and distinct from detention that may occur during FDA’s import admissibility review. Under section 801(a) of the FD&C Act [21 U.S.C. 334(h)], when food is imported or offered for import into the United States, FDA conducts an admissibility review to determined whether to admit the product into United States or detain the product.
On the other hand for administrative detentions under section 304(h) of the FD&C Act, FDA will issue an order to the owner of the suspect food notifying him that FDA is administratively detaining the food and that he has an opportunity to appeal the detention with or without a hearing (see 21 CFR Part 1 Subpart K).
When does an administrative detention order terminate?
If FDA terminates an administrative detention order or the detention period expires, an authorized FDA representative will issue an administrative detention termination notice to any person who received the detention order (or that person’s representative), releasing the article of food, as quickly as possible. If FDA fails to issue an administrative detention termination notice and the detention period expires, the administrative detention is deemed to be terminated (21 CFR 1.384).
Who pays the costs associated with the detention order, such as storage, moving, disposal or reconditioning?
As stated in the preamble to the 2004 final rule (69 Federal Register 31659 at 31690), the party or parties responsible for paying the storage costs of food that FDA orders administratively detained is a matter between the private parties involved with the food. FDA is not liable for those costs. An owner, operator, or agent in charge of the place where the food is located can always request modification of a detention order to destroy the food if they do not want to store it.
Please take the time to read the entire guidance document. It contains information about your rights and other deadlines that become very important if your product is administratively detained.
On October 23, 2012, I had the privilege of addressing an audience of about 50 executive level food company representatives in a large roundtable event that Freeborn & Peters LLP, Mesirow Financial, Worldwide Facilities, Inc. and Red24 jointly hosted. This event focused on food recalls and discussed both the legal issues surrounding recalls and the types of insurance coverage available to help protect company’s balance sheet from the economic impact of a recall.
Among the legal issues discussed, I addressed the purposes of a recall, recall best practices, recall classifications, recall reporting misconceptions and recall planning. On the insurance side, Mesirow Financial and Worldwide Facilities addressed the gaps in traditional insurance coverage for food recall events and the types of recall coverage available to fill those gaps. Lastly, Red24 discussed issues related to the crises management side of food recalls. This was a very informative and well attended event.
As many of you know, the introduction of the Food Safety Modernization Act (“FSMA”) and the subsequent delay in rolling out certain of its key provisions has the produce industry concerned. As a direct result of this concern, coupled with the rise of recent foodborne illness outbreaks and the fact that number of food and beverage recalls has tripled since 2000, many produce companies are insisting that their suppliers execute indemnification agreements, hold harmless agreements or continuing guarantees.
Although logical on the surface, the problem I am seeing in the industry is that buyers are over using boiler plate language that someone “cut & paste” from something they either found on-line or pulled from a different agreement. To add insult to injury, many produce buyers now require their suppliers to either sign one of these “cut & paste” agreements or risk losing the business.
In connection with the preparation of real indemnification agreements that accurately reflect the realities of the produce industry; I have reviewed hundreds of seller prepared indemnification agreements that savvy suppliers refuse to sign. Throughout this process, I compiled a list of the most commonly referenced statutes that produce buyers have asked their produce suppliers to indemnify them against and which have NO bearing on the produce industry.
Allow me to share:
Federal Food, Drug & Cosmetic Act Sections 404, 405, 505, & 512
Section 404 of the Federal Food, Drug, and Cosmetic Act provides for emergency permit control by the Secretary where the Secretary finds that a class of food distributed in interstate commerce is contaminated with micro-organisms during the manufacture, processing, or packing, that it is injurious to health, and that the injurious nature cannot be adequately determined after the articles have entered interstate commerce. The section further provides that the Secretary is authorized to suspend any permit issued under section 404 if a violation of the permit issued is found. Nothing in Section 404 requires a seller of produce to comply with any regulations absent the initial finding of contamination by the Secretary and promulgation of regulations and issuance of permits. Therefore, there is no need to, ex ante, guaranty compliance with section 404.
Section 405 allows the Secretary to make regulations exempting certain labeling requirements, but does not put any affirmative obligation on suppliers to label products.
Section 505 provides that no person shall introduce or deliver into interstate commerce any new drug unless such application is approved. This section has no applicability to the sale of produce.
Section 512 provides that a new animal drug is unsafe unless there is an approval of an application on file with the FDA. Again, this section has no applicability to the sale of produce.
Fair Packaging and Labeling Act
The Fair Packaging and Labeling Act exempts certain persons from the scope of its requirements. Specifically, it exempts persons engaged in business as wholesale or retail distributors of consumer commodities unless they are specifically engaged in the packaging or labeling of such commodities or prescribe means by which commodities are labeled. 15 USC § 1452(b). Most produce companies operate as either a wholesale or retail distributor of food products and are not engaged in packaging or labeling of the commodities, nor does it specify the manner in which the commodities are labeled. Therefore, this Act will not apply to most produce companies.
Federal Hazardous Substances Act
Under 15 USC § 1261(f)(2), the term “hazardous substance” does not apply to foods, drugs, and cosmetics subject to the Food, Drug, and Cosmetic Act. Fruits and vegetables are products subject to the Food, Drug, and Cosmetic Act (though the sections discussed above are inapplicable) and, therefore, the Federal Hazardous Substances Act is inapplicable.
For the buyer: Improper use of “cut & paste” agreements and other boiler plate language can do more harm to your supply line than good because you may jeopardize a relationship with a valuable supplier if you demand they indemnify you against things outside of their control. Simply put, you may force the end of a valuable and mutually beneficial relationship because you are asking your supplier to indemnify you against something over which they have no control. This presents to great of a risk for the seller and smart sellers will not assume such a risk.
For the seller: You must read the fine print and know what it is that your customers are asking you to indemnify them against. It could be financially disastrous for you to indemnify your customer against something over which you have no control. Similarly, you must be careful and guard against the unintended consequences of signing agreements that reference statutes that you do not understand. In a dispute, a court will likely rule against the seller because the obvious intent of any type of hold harmless agreement between a buyer and seller is the seller’s desire to indemnify the buyer in order to induce the buyer to purchase product from the seller. Against this backdrop the tie goes to the buyer.
Please see a link to the article below:
This article discusses the Food and Drug Administration (FDA)’s second annual report on the roll out of the Food Safety Modernization Act (FSMA) and illustrated how the report did not mention the FDA’s failure to promulgate five important regulations during 2012.
Along this same line, we discussed the Center for Food Safety and the Center for Environmental Health’s August 29, 2012 civil action against certain governmental agencies and officers to enforce the FSMA and to compel the promulgation of certain key regulations.
On Friday, September 21, 2012, Jason Klinowski served as one of five panel speakers at the Turnaround Management Association’s “Trying to Stay Healthy in a Distasteful Economy” Breakfast Forum Event, which was held at The Standard Club. During this event, Jason discussed the Perishable Agricultural Commodities Act and the Food Safety Modernization Act in order to illustrate some of the challenges they present to the food & agribusiness industries.
Tyler Mayoras of O’Keefe & Associates moderated the panel, which consisted of: Wayne Carpenter (Managing Director of Lake Pacific Partners), Ed Cooper (Senior Vice President of Wells Fargo’s Food & Agribusiness Office), Justin Segel (CEO of American Pasteurization Company), Jason Klinowski (Agricultural & Food Law attorney at Freeborn & Peters) and Troy Terwilliger (CFO of Graceland Fruit).