American Journal of Law & Medicine

A Comprehensive Strategy to Overhaul FDA Authority for Misleading Food Labels

The modern food environment is considered a primary driver of obesity and other nutrition-related chronic diseases. A significant contribution to this environment is the proliferation of claims on food packaging that provides a misleading picture of a product's' healthfulness. The Food and Drug Administration (FDA) is the agency responsible for food labels but it lacks the regulatory authority and adequate resources to address the majority of questionable labeling practices. The FDA's current system of enforcement is thus essentially based on voluntary compliance and consumer- and manufacturer-initiated litigation has not successfully filled the regulatory gap. This manuscript reviews the current state of food labeling claims and the FDA 's inadequate authority over misbranded food products. It analyzes' competing views on regulatory compliance strategies and argues that a regulatory overhaul consistent with the best science and the First Amendment is necessary. With increased resources and authority, the FDA can meet current public health challenges' and adequately ensure that labels are clear and consumers are properly informed and protected.

CONTENTS

I. INTRODUCTION

II. CURRENT FOOD LABELING CLAIMS

    A. Misleading Food
    B. Claims
    C. Misleading Label Examples

       1. Product Names
       2. Fortification
       3. Definitions
       4. Misbranding

    D. Summary

III. FDA ENGAGEMENT AUTHORITY

    A. Warning Letters Versus Civil Monetary Penalties
    B. Substantiation Documents
    C. Litigation as "Regulation" Has Not Fulfilled Regulatory Gaps
    D. Funding
    E. Summary

IV. STRENGTHEN THE FDA

    A. Compliance Versus Deterrence Regulatory System
    B. Revise Food Labeling Requirements for All Claims
    C. The First Amendment
    D. Increased Resources Through Registration Fees
    E. Civil Monetary Penalties
    F. Summary

V. CONCLUSION

I. INTRODUCTION

The greatest challenge to public health in the United States stems from chronic diseases related to poor nutrition. (1) Over thirty-five percent of adults and almost seventeen percent of children and adolescents are obese in the United States. (2) Studies reveal that obesity increases as people consume a higher proportion of processed food and beverages (collectively "food") in their diets. (3,4) Technological innovation in processed food manufacturing has led to the creation of thousands of new products a year, adding to the abundance of products (more than 300,000) on U.S. store shelves. (5) Experts point to this modern food environment as the primary driver of the obesity epidemic. (6)

A significant development within this current food environment is the proliferation of claims on food packaging that gives a misleading picture of a product's healthfulness. (7) Current food labeling practices include both actual misbranding and permissible but potentially misleading claims about the healthfulness of processed foods. The latter is due to regulations that are too lax or do not reflect the most current science on nutrition. Such confusing food labels undermine public health and have become a widespread problem of their own, in need of regulatory response.

Congress granted the Food and Drug Administration (FDA) the authority to protect consumers and the public health from misbranded products such as prescription drugs, food, medical devices, and cosmetics. (8) However, the agency's enforcement authority is not uniform. In the area of food labeling, the FDA lacks particular authorities that it holds over other products or that Congress has granted to another consumer protection agency, the Federal Trade Commission (FTC). (9) The FDA does not have the resources to sufficiently address the current state of labeling, nor is there funding allocated to feasibly increase its enforcement power. Due to competing interests and First Amendment concerns, the FDA has not utilized what little authority it does have to adequately address food misbranding or revise current regulations on permissible claims. (10) Thus, the FDA's current system of enforcement is essentially based on voluntary compliance. The agency issues a Warning Letter to put a company on notice that it violated a regulation; this is typically the extent of its enforcement activity.

As a result of these regulatory deficiencies, consumers and manufacturers have turned to litigation to reign in questionable claims. There is no private right of action under the Food Drug and Cosmetic Act (FDCA). Consumers thus sue food manufacturers under theories of tort liability and pursuant to state consumer protection acts. Similarly, manufacturers litigate pursuant to the Lanham Act (11) as a method to police their competitors' false or misleading labels. The premise underlying these lawsuits is that labels should be truthful and not misleading to ensure a fair and efficient marketplace. But litigation is not a global solution and has not corrected the problematic labeling environment or provided an adequate substitute for stronger regulations.

The FDA's forced reliance on a system of voluntary compliance has led to an overwhelming number of legal (but questionable) and non-legal claims and statements on food packaging. There currently seems to be little business incentive to comply with food labeling regulations (or FDA guidance documents). Whatever practical threat a Warning Letter holds, this is not a primary disincentive to follow food labeling regulations. The potential for negative publicity and the threat of a lawsuit likely are more compelling incentives to comply; however, these are also not very imposing. So far, labeling non-compliance has not resulted in significantly adverse consequences for companies. (12) The high rate of non-compliance and questionable claims are due to lax enforcement, no threat of penalty, ineffectiveness of litigation as a regulatory mechanism, and little threat of reputational tarnish.

This paper will review the current state of food labeling claims in Part II. Part III will discuss the FDA's inadequate authority over misbranded food products and the need for increased regulations to control the use of misleading claims. In Part IV, the paper will analyze competing views on regulatory compliance strategies and argue that a regulatory overhaul to require all claims be pre-approved is necessary. This is consistent with the First Amendment and would support honest competition and informed consumer decision making. The paper argues that Congress should ensure the FDA is properly funded through a registration fee structure and amend the FDCA to expressly provide the FDA with revised authority to enforce its regulation. Specifically, the FDA needs the authority to seek civil penalties, prohibit claims proven to be deceptive, and compel companies to turn over their substantiation documents when new claims are proffered. With increased resources and authority, the FDA can meet current public health challenges and adequately ensure that labels are clear and consumers are properly informed and protected.

II. CURRENT FOOD LABELING CLAIMS

A. MISLEADING FOOD

In the food labeling context, it is unlawful to introduce misbranded food into interstate commerce. (13) A food meets the definition of misbranded if it has a false or misleading label, is not properly named or identified, is missing required disclosures or nutrition information, or if health and nutrition claims are not made according to specified requirements. (14) Although the definition includes "misleading" as a condition of misbranding, this is one area the FDA does not generally address, meaning it does not send Warning Letters or otherwise seek correction for labels solely deemed misleading. Misleading labels are their own issue; the prohibition against them is in need of enforcement. Further, although there are specific requirements for certain permissible health-related claims, others are permitted based on the manufacturers' representation of accuracy. (15) The requirements for the former have become too permissive in light of the proliferation of food-based claims and the allowances made for the latter leaves labels susceptible to a variety of questionable claims. (16) This paper will refer to the dual issue of misbranded claims and permissible but questionable claims as "misleading" food claims.

Misleading food claims are a barrier to a fair and efficient marketplace. Research shows that from 2001 to 2010, the number of health- and nutrition-related claims on new products increased from 2.2 to 2.6 per product. (17) However, research also reveals that consumers are confused by the intent of commonly used claims on food packaging (18) and are misled by such claims to underestimate total calorie content in the product and overestimate a product's overall positive attributes. (19) Claims create a "health halo" around the product, whether or not the consumer is seeking a healthier choice. (20) This means that consumers misperceive the total nutritional quality of the food and may eat more of it than in the absence of such a claim. (21) Despite the confusion, health and nutrition claims increase consumers' intent to purchase the products bearing them. (22) Consumers are in fact increasingly seeking healthier foods, (23) so it is not surprising that sales of new products with such claims are higher than those without them. (24) Therefore, accurate information is necessary for consumers to make appropriate choices. (25)

Manufacturers additionally have a financial interest in consumers choosing their products over their competitors' products; thus, they have a stake in ensuring that consumers are not deceived by the competition through misleading labels. Clear factual information is necessary to meet these compatible interests.

The current food labeling environment suffers from dual problems of lack of regulations that restrict questionable claims and inadequate enforcement of questionable claims that do violate the regulations. The first problem stems from the evolution of permissible claims so that now even misleading and deceptive claims are expressly permitted or tactically ignored. The second problem stems from a lack of authority and resources granted to the FDA to properly address misleading claims or misbranded food products. Both are reviewed below.

B. CLAIMS

Food manufacturers are permitted to utilize four types of claims on food packaging, but in practice, over eighty-five percent of them are nutrient content or implied nutrient content claims (collectively, nutrient content claims). (26) The remaining claims are health claims, qualified health claims, and structure/function claims. (27) Nutrient content claims expressly or implicitly characterize the level of a nutrient of the type required to be disclosed in nutrition labeling, such as "low sodium," (28) and must be made in accordance with Reference Amounts Customarily Consumed or the Recommended Daily Value of a food or nutrient. (29) Health claims characterize the relationship of a substance to a disease or health-related condition and must be based on a "significant scientific agreement standard." (30) An example is: "Healthful diets with adequate folate may reduce a woman's risk of having a child with a brain or spinal cord defect." (31) Qualified health claims are permitted when credible emerging or limited scientific evidence supports a relationship between a food and reduced risk of a disease or health-related condition. (32) They are similar in intent to health claims but additionally must contain a disclaimer such as, "very limited and preliminary scientific research suggests" and a notation that the "FDA concludes that there is little scientific evidence supporting this claim." (33, 34) The final category, structure/function claims, describes the role of a nutrient or ingredient intended to affect or maintain normal structure or function in the body; for example, "calcium builds strong bones." (35) Structure/function claims do not need preapproval and there are no specific requirements for their use, so the manufacturer alone is responsible for their accuracy. (36) The general requirement that claims on food packaging must be truthful and not misleading applies to all claims, including structure/function claims, (37) but the FDA does not routinely enforce this general prohibition. Misleading or suspect structure/function claims may be and have been ignored. (38)

Legally permissible health and nutrition claims on product packaging may present a misleading picture of a product's overall healthfulness because they are permitted on food despite other less healthful characteristics of the product. Health claims are not permitted on products that contain "disqualifying nutrient levels" of total fat (13 grams), saturated fat (4 grams), cholesterol (60 milligrams) or sodium (480 milligrams). (39) The FDA has not instituted a disqualifying level of artificial trans fat or added sugar in order for manufacturers to make claims. (40) Thus, products containing artificial trans fat and high levels of added sugar may bear health claims.

The regulations for nutrient content claims are more permissive because the disqualifying nutrient list above does not prevent a manufacturer from making such a claim. Manufacturers are permitted to make nutrient content claims even if a nutrient in the product exceeds the level indicated above as long as the package bears a statement about the suspect nutrient as follows: "See nutrition information for [subject nutrient] content." (41) It is unclear how effective this directive to examine the Nutrition Facts Panel is in terms of consumer education or attention. Regardless, this requirement likewise does not apply to foods high in artificial trans fat or added sugar. (42) Thus, products containing high levels of total and saturated fat, cholesterol, sodium, artificial trans fat, and added sugar can bear nutrient content claims, the latter two without any note to consult the Nutrition Facts Panel.

Perhaps the most problematic result of these lax regulations is that products high in added sugar carry a wide variety of nutrient content claims, which misleadingly convey healthfulness in an otherwise unhealthy product. (43) For example, in one study of 1 15 cereal brands, a large percent of the least healthy cereals that were marketed to children bore the most number of health or nutrition-related claims, at three to four per box. (44) In another study, products bearing the Whole Grain Stamp, a symbol manufacturers pay an organization to use, had the most sugar of the 545 products assessed. (45) Candy manufacturers have also begun advertising the protein content of their products (e.g., Baby Ruth) derived from peanuts as an ingredient. (46) Given that health and nutrition-related claims create a perception of health notwithstanding the actual properties of the food or whether consumers are seeking a healthy product, (47) it is problematic that foods of less than optimal nutritional value increasingly bear such claims.

The proliferation of questionable but legal claims likely has its origin from litigation in the 1990s, which marked the advent of qualified health claims. The FDA had originally disallowed the use of a health claim that did not meet the robust "significant scientific agreement" standard. (48) Marketers of dietary supplements brought litigation against the FDA claiming the restriction violated their First Amendment rights. (49) In Pearson v. Shalala, a federal appellate court agreed with the marketers and held that the FDA could not ban health claims that failed to meet this standard. (50) The court held that the agency must allow a modified health claim or one with a clarifying disclaimer. (51) The FDA has since applied this rationale to food products, so claims with substantially less evidence, i.e., qualified health claims, are now permitted. (52) Since Pearson, there has been a recognizably more lax environment for all claims, likely due in part to the court's strong language supporting the manufacturer's First Amendment rights. (53)

At the time the court decided Pearson, the finding was supportable from both an evidence-based and First Amendment perspective. Truthful labeling is considered commercial speech, protected by the First Amendment. (54) However, false, deceptive, and misleading speech on a product label is not protected and may be regulated. (55) The government may ban speech that has been proven to be misleading. (56) If the speech is only potentially misleading, which means that it can be presented in a way that is not deceptive, or can be explained through disclaimers or disclosures, it cannot be banned. (57) The government can only require that potentially misleading speech be presented in a non-misleading manner by requiring factual disclosures or explanations to cure the potential deception. (58) At the time of Pearson, there were no studies to indicate the proposed claim was misleading. Thus, the court prescribed further explanation through disclosures consistent with First Amendment jurisprudence. Since Pearson, however, several studies confirm that qualified health claims are in fact confusing to consumers. (59) Still, the FDA has not indicated a renewed interest in addressing qualified health claims. Practically, the food industry rarely uses qualified health claims. (60) Legally, since Pearson, the Supreme Court's interpretation of the First Amendment has provided increasing protection to commercial speech (and other forms of business-related speech), (61) creating a disincentive for the agency to address questionable marketing practices and risk negative judgment in court. At this point, no activity on health-related claims seems imminent and these four types of claims remain permissible. …

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