The Implications of FDA's Determination on the GRAS Status of PHOs

June 18, 2015

The US Food and Drug Administration (FDA) has announced its highly anticipated determination that the Agency no longer considers the use of partially hydrogenated oils (PHOs), the primary dietary source of artificial trans fatty acids (trans fat) in processed foods, to be generally recognized as safe (GRAS).  Although not wholly unexpected by industry, this determination still represents a new approach by FDA to the regulation of food additives, and has significant implications for food products containing PHOs that have been, and currently still are, on the market.  With FDA’s announcement, companies should be questioning what this decision means for their business, from the perspectives of both regulatory compliance and legal liability.  Below we briefly describe the implications of this determination, and the long-term considerations.

FDA’s Regulation of Trans Fats

As summarized by FDA in its Federal Register notice on the determination, PHOs (including partially hydrogenated fats) have a long history of use as food ingredients.  Some common PHOs have long been considered GRAS based on a history of use prior to 1958 (the year in which Congress amended the Federal Food, Drug, and Cosmetic Act (FD&C Act) to newly regulate the use of food additives), while FDA has, by regulation, affirmed other uses as GRAS.  PHOs have received increasing attention over recent years because they are the primary dietary source of trans fats.  Trans fats have been demonstrated to increase the level of low-density lipoprotein (LDL or “bad”) cholesterol in the blood, and thus, have been implicated as a factor that increases the risk of cardiovascular disease.

In light of the current scientific evidence on the health risks of the consumption of trans fats, in November 2013 FDA published its tentative determination that PHOs are not GRAS for any use in food and established a docket for public comments.  After reviewing the more than 6000 comments it received, FDA has now published its final determination concluding that PHOs are not GRAS for use in human food.

Implications for Regulatory Compliance

The legal implication of FDA’s determination is that PHOs are food additives and, therefore, may not be marketed for use in food without prior FDA approval.  However, FDA did not go so far as to conclude that use of PHOs at low levels is unsafe, but rather that there is not a consensus among qualified experts (as the GRAS standard requires) that such uses are safe.  Consequently, FDA has indicated that manufacturers may seek food additive approval for specific uses of PHOs, with data demonstrating a reasonable certainty of no harm of the proposed use.  To give time for submission and review of these petitions, FDA has established a compliance deadline of June 18, 2018.

Although industry has been making strides toward the elimination of PHOs in food, there are still applications in which PHOs are necessary.  Manufacturers are marketing their products on the basis of a self-determination, as is permitted under the FD&C Act, that the intended use of the PHOs is GRAS.  FDA’s decision now calls into serious question whether there is general recognition, among experts qualified by scientific training and experience to evaluate the safety of PHOs, that a given application in food is safe.  It is beyond the scope of this alert to discuss whether it may still be possible to self-determine that a given use of PHOs is GRAS, but the practical reality is that manufacturers will need to evaluate FDA’s comments regarding general recognition in the context of their existing GRAS determinations and either address the questions or submit food additive petitions for their intended use of PHOs.

We are aware that an industry food additive petition has been submitted to FDA to cover existing uses.  However, it is far from certain that FDA will agree that all, or any, of the petitioned uses are safe.  This uncertainty increases the risk of both regulatory action and litigation. Manufacturers should consider their individual vulnerability and assess what independent actions they may need to take to strengthen product defense.

Implications for Liability, Current and Historical

Claims involving trans fats and PHOs constitute a significant portion of the consumer class action lawsuits brought against the food industry in recent years.  These suits typically allege that product labels are misleading, either in representing that the products have “zero trans fats” or in making representations about healthfulness or other product benefits despite the presence of trans fats.  There is, however, one noteworthy exception, Simpson v. Cal. Pizza Kitchen, Inc., 989 F. Supp. 2d 1015 (S.D. Cal. 2013), which may have been a sign of things to come – it asserted a public nuisance claim based upon the alleged adverse public health effects of PHOs.  The court dismissed the case with leave to replead based on the plaintiff’s failure to demonstrate standing; she failed to allege that she was at a significantly increased risk of harm, because her exposure to PHOs was incidental.  Plaintiff elected not to refile. The measure of damages typically sought in these consumer class actions has been the price premium allegedly paid for the product as misrepresented, as opposed to what it was truly worth.

From a litigation standpoint, FDA’s action is a potential game changer.  Since FDA’s action is based on its conclusion that based on the available scientific information “there is no longer a consensus among qualified experts” that PHOs are generally recognized as safe, it provides potential fuel for safety-based claims, rather than the traditional misrepresentation-type claims.  These claims could include individual personal injury actions or claims like medical monitoring, often brought as class actions, which seek to recover the cost of diagnostic testing allegedly required because exposure to the product has put the plaintiff at an increased risk of disease.

Framed as a safety issue, labeling claims may focus on the absence of warnings about alleged risks of PHO consumption, rather than the accuracy of product labels.  Failure to warn claims may not be preempted by FDA labeling requirements.  See, e.g., Holk v. Snapple Beverage Corp., 575 F.3d 329, 338 (3d Cir. 2009) (citing Pub. L. No. 101-535, § 6(c)(2)) (the Nutrition Labeling and Education Act’s express preemption provision: “’shall not be construed to apply to any requirement respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food,’ thereby preserving state warning laws.”).

FDA’s conclusion that there is no current consensus that PHOs are safe begs the question of when that consensus either did or did not exist. FDA cites studies that are, in some cases, a decade or more old.  While FDA has permitted a three year phase-out period for companies to come into compliance, the impact of this phase-out on potential claims related to existing products is unclear.  And, of course, any future FDA approvals on food additive petitions permitting continued use of PHOs could also impact potential claims.

In this environment, companies should evaluate the scope of their potential exposure -- whether they face a potential long tail of claims based on past product formulations, whether their current product formulations are generating any continuing exposures, and what steps can be taken now to minimize those exposures.

In conclusion, it is clear that FDA’s determination will have significant implications for food and food additive manufacturers, for both regulatory compliance and legal liability.  Steptoe is ready to assist companies with developing a long-term strategy to address these concerns and ensure continued marketability.