Agricultural Law Weekly Review—September 8, 2016

Written by M. Sean High – Staff Attorney

The following information is an update of recent, local, state, national, and international legal developments relevant to agriculture:

GMO Labeling: GMA and Vermont Agree to Voluntarily Dismiss Litigation

On September 1, 2016, the United States District Court for the District of Vermont signed an order of voluntary dismissal in the state GMO labeling case Grocery Manufacturers Association v. Sorrell (Case No. 5:14-cv-117-cr, Document 161).  According to the order, the parties agreed to voluntarily dismiss the action without prejudice because: (1) on July 29, 2016, President Obama signed into law S.764 which established a “National Bioengineered Food Disclosure Standard;” (2) on August 1, 2016, USDA stated that S.764 preempted states from requiring the labeling of any genetically engineered food or seed in interstate commerce; and (3) on August 2, 2016, Vermont’s Attorney General (Sorrell) announced that the state would no longer enforce Vermont Act 120 which required the labeling of food produced with genetic engineering.

Broiler Litigation: Class Action Filed Alleging Chicken Processors Colluded to Manipulate Prices

On September 2, 2016, a class action was filed in the United States District Court for the Northern District of Illinois against twenty-seven chicken processor entities for allegedly conspiring and combining “to fix, raise, maintain, and stabilize the price” of broiler chickens (Maplevale Farms, Inc. v. Koch Foods, Inc., Case No. 1:16-cv-08637). According to the filed complaint, “[t]he principal (but not exclusive) method by which Defendants implemented and executed their conspiracy was by coordinating their output and limiting production with the intent and expected result of increasing prices of Broilers in the United States.” The complaint alleged that the “Defendants exchanged detailed, competitively sensitive, and closely-guarded non-public information about prices, capacity, sales volume, and demand, including through third party co-conspirator Agri Stats.” 

Labor: Court Agrees to Hear Pesticide Exposure Case

On September 2, 2016, the United States Court of Appeals, Third Circuit agreed to hear an action brought by foreign agricultural laborers who had worked on Central and South American banana plantations in the 1960s, 1970s, and 1980s (Chavez v. Dole Food Company, Inc., WL 4578641).  According to the court, the plaintiff’s in the action “allege that their employers and certain chemical companies knowingly exposed them to toxic pesticides over many years and that this exposure caused adverse health consequences.” The court stated that the litigation first began in Texas state court in 1993, but that “no court has reached the merits of the plaintiff’s claims.” The court expressed a desire that after two decades the litigation “proceeds with more alacrity than it has to the present date.”

FSMA: FDA Issues Report from Public Meeting

On September 2, 2016, the Food and Drug Administration (FDA) issued a report on findings from three June 2016 public meetings held in California, Michigan, and New Jersey regarding the implementation of import safety programs under the FDA Food Safety Modernization Act (FSMA).  According to FDA, the three public meetings “were designed to assess the state of importer readiness, elicit feedback, ideas, and comments regarding FSMA programs, and identify training and outreach ideas that could be helpful in supporting industry compliance with [Foreign Supplier Verification Programs] requirements.” 

FSMA: FDA Announces Draft Guidance Webinar

On September 6, 2016, the Food and Drug Administration (FDA) issued a press release announcing that on September 19, 2016 (1:00 PM to 2:00 PM ET) FDA’s Foods and Veterinary Program will hold a public webinar to discuss FDA’s preventive controls hazard analysis and risk-based draft guidance.  According to FDA, “[t]his Draft Guidance provides the first five chapters of what will be a multi-chapter guidance designed to help businesses comply with the Preventive Controls for Human Food Rule…[and] explains FDA’s current thinking on how to comply with the requirements for hazard analysis and risk-based preventive controls and includes a discussion about establishing a food safety plan.”  

Legislation: Horse Breeding Fund Bill Referred to PA House Ag Committee

On September 1, 2016, proposed legislation regarding the Pennsylvania Breeding Fund was referred to the Pennsylvania House Agricultural and Rural Affairs Committee (HB 2303).  According to the bill’s co-sponsorship memoranda, HB 2303 will provide “clarify[ing] language regarding the eligibility of thoroughbred breeders and owners receiving payments from the Pennsylvania Breeding Fund, a restricted account within the State Racing Fund that provides incentive awards for winning Pennsylvania born/bred thoroughbred race horses.” Additionally, according to the co-sponsorship memoranda, HB 2303 “will also provide for the distribution of awards to breeders and owners of PA-Bred and PA Sired Thoroughbred race horses, using language reached in a recent compromise with the Senate.”

Legislation: Food Handling Bill Referred to PA House Ag Committee

On September 7, 2016, proposed legislation regarding retail food facility and employee cleanliness was referred to the Pennsylvania House Agricultural and Rural Affairs Committee (HB 2312).  According to the co-sponsorship memoranda, HB 2312 would require all establishments serving food to post reminders for their food handlers that Pennsylvania food safety law “prohibits food preparers and food servers in retail food facilities from having bare-hand contact with ready-to-eat food.”

Regulatory Update: FDA Approves Genetically Engineered Chicken

Written by M. Sean High – Staff Attorney

On December 8, 2015, the U.S. Food and Drug Administration (FDA) approved a genetically engineered (GE) chicken designed to produce eggs to be used in the manufacturing of a drug intended to treat the human enzyme disease lysosomal acid lipase deficiency (LAL-D).

LAL-D is a rare (and potentially fatal) disease that causes the build-up of fats within the tissue cells of multiple organs including the heart, liver, and spleen.  According to the pharmaceutical manufacturer Alexion Pharmaceuticals Inc. (Alexion), when LAL-D is present in infant patients (known as Wolman disease) there is currently a nearly 90% mortality rate; when LAL-D is present in pediatric and adult patients (known as cholesteryl ester storage disease) “with a clinical biopsy assessment, nearly 50% progress to fibrosis, cirrhosis, or liver transplant within 3 years of symptom onset.” Consequently, Alexion sought FDA approval for Kanuma, the company’s enzyme replacement therapy drug designed to combat LAL-D. 

Under Alexion’s manufacturing of Kanuma, GE chickens are raised so as to “produce a recombinant form of human lysosomal acid lipase (rhLAL) protein in their egg whites.” In turn, the rhLAL egg whites are to be purified and refined into the LAL-D fighting drug Kanuma.

FDA stated that the GE chickens and their eggs do not pose a human health risk because neither will be permitted to enter the food supply.  Importantly, FDA noted that their approval will “not cause a significant impact on the environment, because the chickens are raised in highly secure facilities. 

Canada Issues Notice on HPAI for Backyard Flock Owners

Written by Katharine Richter

On October 22, 2015, the Canadian Food Inspection Agency (CFIA) issued a general public notice warning that there exists a “significant threat of the re-emergence of Highly Pathogenic Avian Influenza (HPAI) in the fall of 2015.”  During the American outbreak, which killed 47.5 million chickens, Canada lost approximately 250,000 birds in Ontario and British Columbia. 

The warning issued focused on using biosecurity in order to prevent backyard flocks and pet birds from contracting HPAI.  With the decrease of temperature coming, there is concern that the virus will re-emerge because the virus thrives in cooler temperatures.  CFIA issued practices for individuals with birds to follow which include preventing contact with wild birds and other animals, limiting contact with visitors and knowing how to spot and monitor symptoms of illness.

The CFIA notice all contains additional material for individuals seeking guidance on how to protect birds from HPAI at the producer level down to owners of backyard flocks.

APHIS Environmental Assessment of HPAI Vaccine Finds No Impact

Written by Katharine Richter

On October 7, 2015, Animal and Plant Health Inspection Service (APHIS) issued a notice of the environmental assessment (EA) of Avian Influenza H5 vaccines has been prepared.  The notice stated that “based on the environmental assessment . . . use of vaccines . . . will have no significant impact on the human environment.”

The notice states that “under the Virus-Serum-Toxin Act (21 U.S.C. 151 et. seq.), APHIS is authorized to promulgate regulations designed to ensure that veterinary biological products are pure, safe, potent, and efficacious.”  The notice highlights the December 2014 outbreak of highly pathogenic avian influenza (HPAI) and the devastating affects it had on the poultry industry.  The hardest hit sectors of the poultry industry was commercial meat turkeys and laying hens, with the total loss of “over 48 million birds between December 2014 and June 2015.”    

APHIS states that after the comment period closes, if the comments raise issues not previously considered, APHIS will issue a supplement to the EA.  Given that timeliness is so crucial with the cold weather setting back in, APHIS is aiming to authorize shipment and field use of the vaccine as quickly as possible, potentially before the close of the comment period.

The public comment period regarding the environmental assessment will be open until November 6, 2015. 

Case Farms Facing Fines From OSHA Inspection

Written by Tyler R. Etter

On August 13, 2015, the Occupational Safety and Health Administration (OSHA) released citations against chicken processor Case Farms facility in Winesburg, Ohio. The inspection occurred in February of 2015, revealing a total of 55 violations, with an assessment of $861,500 in penalties.

The inspection revealed amputation hazard, fall hazards, lack of personal protective equipment, violations of electrical safety standards, improperly stored oxygen cylinders, and a lack of emergency eye wash stations.

The OSHA investigation has characterized Case as an “outrageously dangerous place to work.” Over the past 25 years, Case has had more than 350 violations. According to OSHA, Case Farms has a history of safety violations, with citations issued in 42 out of 66 inspections. Following recent complaints, OSHA is currently investigating Case’s Canton, Ohio operations.

Case Farms has responded to the investigation, stating that it disagrees with the negative characterizations of the company, and that the Winesburg facility had recently passed 900,000 hours without a time-loss injury. According to Case, the last time loss injury occurred was on September, 16, 2014. The company plans on working with OSHA to address the concerns.

U.S. Chicken Import Ban Continues in South Africa

By Katharine Richter

On August 7, 2015, the Office of the United States Trade Representatives (USTR) held a hearing to determine “whether South Africa should be suspended from the recently renewed African Growth and Opportunity Act (AGOA)” because of failure to eliminate specific agricultural trade barriers previously agreed upon.  AGOA, a trade agreement giving South Africa very “liberal access to the U.S. market,” was renewed on June 29, 2015. 

According to a joint statement from USTR, on June 4 and 5, 2015, industry representatives and government officials from the United States and South Africa met in France to discuss agricultural trade issues in relation to renewing AGOA.  South Africa had agreed to allow “renewed market access for U.S. bone-in-chicken.”  Prior to the meeting, South Africa placed anti-dumping duties on American chicken, effectively banning U.S. chicken.  South Africa at the meeting agreed to create the framework allowing U.S. chicken imports.

The President of the National Chicken Council (NCC), Mike Brown, testified at the hearing that South Africa needs to begin to “treat U.S. products fairly… [and] unless South Africa makes significant progress in this regard, the law now requires the president to take action to limit, or even deny, further preferences.” 

This response from NCC is a result of South Africa failing to implement agreements made at the France meeting.  According to the testimony, “South Africa has agreed to open, and the U.S. industry has agreed to accept, an initial annual antidumping duty-free quota of 65,000 MT, with future growth in that quota calculated upon an agreed formula…”  Mike Brown stated in his testimony, “In our view, South Africa will have only made the progress it is required to make under the AGOA renewal legislation when there are actual imports of U.S. poultry moving into South Africa.”