Hanjin's potential bankruptcy, FDA guidance on evaporated cane juice, and more in this issue of Advertising Law News & Analysis

6 min

Special Announcement:

As consumers' thirst for content proves unquenchable and channels and tactics proliferate, marketers must navigate an ever-expanding frontier as federal and state regulators, as well as industry groups and competitors, track their every move. Join Utah Attorney General Sean Reyes, Venable's Jeffrey D. Knowles, and leading industry attorneys for the Direct 2 Regulator (D2R) session on Tuesday, September 13 at 11 a.m. during the Electronic Retailing Association's D2C conference.

Learn more and register here.


Collision Course: What Hanjin's Potential Bankruptcy Means for Marketers

Hanjin Shipping Co. Ltd. (Hanjin), South Korea's largest shipping company and the world's seventh largest container operator in terms of capacity, filed for receivership in connection with its bankruptcy proceeding in South Korea last week. In a recent client alert, Venable attorneys Ashley W. Craig, Edward A. Smith, Elizabeth K. Lowe, Georgios Soumalevris, and Wes S. Sudduth write that Hanjin's filing had an immediate impact on the international supply chain, particularly the high-volume and commercially important trans-Pacific trades from Asia to the United States.

Hanjin reportedly has been banned from loading containers in South Korea and has stopped accepting new bookings. Additionally, as ports and terminal operators are becoming increasingly concerned about Hanjin's ability to satisfy past and current financial obligations, they are reportedly blocking access to Hanjin vessels—forcing vessels to remain offshore. Furthermore, several terminals are already refusing to load containers on outbound Hanjin vessels unless they receive full payment in advance.

Read the full client alert to learn what measures shippers and others should consider to assess their exposure to and mitigate any negative impact resulting from Hanjin's court receivership.

FDA Guidance Rehydrates "Evaporated Cane Juice" Class Actions

Earlier this year, the Ninth Circuit stayed a consumer class action alleging the listing of "evaporated cane juice" as an ingredient on yogurt labels is simply code for sugar and misleads consumers about the healthiness of its products. The Court stayed the matter on primary jurisdiction grounds in order to allow the FDA time to complete its review of draft guidance on the use of the term. The Northern District of California's recent decision in Swearingen v. Santa Cruz Natural, Inc., issued after the FDA published its final guidance, may signal a revival of such cases, but plaintiffs should prepare for a tough fight, writes Venable attorney Stephen R. Freeland in a recent post to Venable's advertising law blog.

In Swearingen, which was also filed before the FDA issued its final guidance, the plaintiff alleges that Santa Cruz soda products offered were misleadingly labeled as containing "evaporated cane juice." Santa Cruz moved to dismiss the complaint, but the district court, like the Ninth Circuit, stayed the action, pending the FDA's guidance. After the FDA issued its guidance – which indicates that the term "evaporated cane juice" should be listed on food labels as "sugar" – the district court lifted the stay and granted in part and denied in part Santa Cruz's motion to dismiss.

This decision may signal a revival of class action claims against food manufacturers for listing "evaporated cane juice" as an ingredient. However, as the Swearingen court noted, a plaintiff must plead – and, if they survive dismissal, later prove – reliance on that term in order to satisfy the standing requirements of California's false advertising and consumer protection laws.

Read the full blog post to learn how the District Court's decision is instructive to marketers defending "Evaporated Cane Juice" class actions in California.

Read the Swearingen decision here.

Will FDA Rule Kill Antibacterial Soaps?

On September 2, 2016, the Food and Drug Administration (FDA) published a final rule determining, after a review of available information, that nineteen active ingredients are not generally recognized as safe and effective (GRASE) for use in consumer antibacterial washes, effectively banning their use. Once the rule becomes effective, FDA will consider any consumer antiseptic wash product containing these non-GRASE active ingredients to be misbranded and subject to FDA enforcement action, write Venable attorneys Todd A. Harrison, Michelle C. Jackson, Claudia A. Lewis, and Sarah J. Abramson in a recent client alert.

This final rule pertains only to consumer antiseptic wash products, which include antibacterial hand soaps, hand washes, and body washes that are used by consumers for personal use. It does not apply to consumer antiseptic "rubs" (e.g., leave-on hand sanitizers or wipes), antiseptic "first aid" products, antiseptics intended for use in a healthcare setting, or antiseptics used by the food industry.

The rule takes effect on September 6, 2017. This gives companies one year to reformulate products, remove products from the market, or obtain FDA approval for the current formulation via a New Drug Application.

Read Venable's full client alert to learn which ingredients are included on the FDA's List.

Read the full text of the Final Rule.

Upcoming Events:

Electronic Retail Association's 2016 D2C Convention

September 13-15, 2016 | Wynn Hotel, Las Vegas, NV

Venable is proud to sponsor the 2016 ERA D2C Convention, where innovators, marketers, and manufacturers come together to showcase the latest trends in direct response. Be sure to visit Venable in booth #715, learn more about how to ensure your business succeeds during sessions featuring Venable's Jeffrey D. Knowles and Ellen T. Berge, and mingle with our team at the Pre-Moxie Mixer on Thursday, September 15 from 5:30 pm to 7:00 pm.

Subscription Summit

September 21-22, 2016 | Detroit, MI

The Subscription Summit is the first and only conference devoted exclusively to those who work in or alongside the subscription box industry. Join industry leaders, subscription box founders, and Venable attorneys to network and learn more about this rapidly growing industry.

Click here to register and to learn more about the conference.

Food and Drug Law Institute Conference

September 22, 2016 | San Francisco, CA

Join Venable partner Todd Harrison at the Food and Drug Law Institute conference in San Diego this fall. Todd will be speaking at the Introduction to Food Law and Regulation Course: Understanding How the Government Regulates the Food Industry, discussing the Federal Trade Commission's role and statutory authority regarding food advertising and the elements of claims substantiation.

Click here to register and to learn more about the conference.

SupplySide West

October 4-8, 2016 | Las Vegas, NV

Venable will be the Official Legal and Regulatory Partner at this year's SupplySide West Global Expo & Conference. This conference focuses on the exploration, discovery, innovation, and marketing strategy around the development of finished consumer goods in the animal nutrition, beverage, cosmetics, dietary supplements, sports nutrition, food, and pharmaceutical industries. Venable's Todd Harrison and Sen. Mark Pryor will participate in a Workshop panel on "State Attorneys General: Communication & Mitigation Strategies." Be sure to visit us at our offices directly in front of the SupplySide West registration entrance in the Expo Hall holding area!