Based on confusing language in the regulation and industry’s significant difficulties in complying with the new menu labeling requirements, Congress is considering rewriting the law, and the U.S. Food and Drug Administration (FDA) has extended the compliance date. On March 9, 2016, FDA further extended the compliance deadline until “one year after it issues final, Level 1 guidance on menu labeling.” On December 1, 2014, FDA issued a 395-page final rule on food labeling entitled “Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments” (the “Menu Labeling Rule”).[1] Industry responded to the new rule by asking a number of questions, identifying specific practices and questioning whether they would be acceptable for complying with the rule. In response, on March 13, 2015, FDA issued a ‘‘Small Entity Compliance Guide.’’ Since then, additional requests have been made, asking FDA to extend the compliance date of the final rule based on concerns that “covered establishments” do not have adequate time to fully implement the requirements of the rule. These requests were submitted by a large retailer, trade associations and others, and they provided information regarding steps involved in implementation of the labeling requirements. More specifically, the requests describe steps involved in developing software, information systems and other technologies for providing nutrition information in ways that better correspond to how foods are offered for sale in covered establishments and allow for more efficient and product-specific nutrition labeling. In addition, the requests describe steps involved in training staff, implementing Standard Operating Procedures and developing and installing updated and consistent menu boards across all locations within a chain.

FDA didn’t come up with the idea for the Menu Labeling Rule on its own. Section 4205 of the Patient Protection and Affordable Care Act (ACA),[2] signed into law on March 23, 2010, requires nutrition labeling of “standard” menu items for chain restaurants with 20 or more locations and “similar retail food establishments” doing business under the same name. “Similar retail food establishments” are defined broadly to include grocery stores, supermarkets, convenience stores, general merchandise stores, lodging facilities, recreational venues, sports venues, performing arts venues and movie theaters. It is also important to note that Congress is not done legislating. On February 22, 2016, the House passed the Common Sense Nutrition Disclosure Act of 2015 (H.R. 2017). The proposed amendments would allow certain establishments “reasonable variations” in providing calorie information, eliminate the requirement for certifications and criminal penalties, grant 90 days for corrective action and preempt civil litigation.

What Does the Legislation Require?
Under the ACA, covered entities are required to:

•    Disclose, on menus and menu boards, the number of calories in an item as it is usually prepared and offered for sale

•    Provide written nutrition information and nutrition claim information to consumers upon request

•    Provide a prominent, clear and conspicuous statement on menus and menu boards about the availability of the written nutrition information

•    Provide, on a sign adjacent to each food item, the number of calories in the item or per serving for self-service items and food on display

The Menu Labeling Rule specifies that the nutrition information be displayed next to the name or price. For example, a multiple-serving menu item, such as a pizza, requires a calorie count for the total pie (e.g., 1,600 calories) or per slice—as long as it is clear how many slices are in the pie. While most Americans might think the number of slices in a pizza is obvious, Yogi Berra famously told a server to cut his pizza into four slices because he wasn’t hungry enough to eat six.

What Food Items Are Covered?
The Menu Labeling Rule’s requirements apply to “standard menu items” defined as “food routinely included on a menu or menu board or routinely offered as a self-service food or food on display” but not to custom orders, daily specials, food that is part of a customary market test and temporary menu items, certain self-service foods and “alcohol on display.” Alcoholic beverages that are standard menu items are included.

Substantiation: Proving the Accuracy of Menu Labeling
“Substantiation” is a term of art under the Food, Drug, and Cosmetic Act (FD&C Act) of 1938, and federal and state regulators have broad discretion in deciding, after the fact, what level of scientific evidence is sufficient. The Menu Labeling Rule requires that a restaurant—or similar retail food establishment—provide an inspector with information substantiating nutrient values, including the method and data used to derive these nutrient levels [21 C.F.R. Section 101.11(c)(6)]. In addition, a “responsible individual” employed at the establishment and its corporate headquarters or parent entity must certify that the information contained in the nutrient analysis is complete and accurate. Only a responsible individual employed at the establishment, however, can “certify” that the establishment took reasonable steps to ensure the method of preparation adhered to the determined values.

What Happens If You Don’t Comply or Don’t Get It Right?
The Menu Labeling Rule “Misbranding” provision states that “[a] standard menu item offered for sale in a covered establishment shall be deemed misbranded under the FD&C Act [21 C.F.R. Section 101.11(f)].” It is notable that the Menu Labeling Rule renders menu content “labeling” under the applicable provisions of the FD&C Act [i.e., 21 U.S.C. Section 343(a)(f) and (q) and Section 321], and violating the Menu Labeling Rule renders the food “misbranded,” constituting an FD&C Act violation.

Under the Menu Labeling Rule and the FD&C Act, FDA retains the discretion to hold those with supervisory responsibility, including those who are “responsible individuals” who certify the menu labeling, criminally liable for a misbranding violation.

What about Civil Litigation?
The Menu Labeling Rule does not expressly preempt consumer trade practices, misrepresentation or other tort claims. The principles of conflict preemption will apply. Traditionally, the courts as well as state and federal regulators were protective of governmental regulatory power and did not favor private litigants enforcing the law. But the landscape has changed, and courts and regulators alike are increasingly tolerant and in some instances supportive of claims brought by private litigants. The industry should be mindful of the emerging theories to circumvent preemption, particularly related to the labeling of food. The Menu Labeling Rule creates yet more requirements and significant new risks for litigation.

Who Is Covered?
In addition to a restaurant chain with more than 20 locations, the ACA applies to “retail food establishments” whose primary business activity is the sale of food to consumers. A retail establishment’s primary business activity is “the sale of food to consumers” if either: 1) the establishment presents or has presented itself publicly as a restaurant; or 2) either a) more than 50 percent of a retail establishment’s gross floor area is used for the preparation, purchase, service, consumption or storage of food, or b) more than 50 percent of the establishment’s revenues are generated by the sale of food. If a facility selling restaurant or restaurant-type food is within the confines of other facilities, such as a coffee shop in a bookstore, determining whether the labeling rule will apply will be determined case by case.

The regulation is more expansive than originally expected. The ACA states the new law applies to “restaurants or similar retail food establishments,” and “similar retail food establishments” is defined in the Menu Labeling Rule to mean retail establishments that offer restaurant-type food, including:

•    Bakeries

•    Cafeterias

•    Coffee shops

•    Convenience stores

•    Delicatessens

•    Foodservice facilities located within entertainment venues (e.g., amusement parks, bowling alleys and movie theaters)

•    Foodservice vendors (e.g., ice cream shops and mall cookie counters)

•    Food takeout and/or delivery establishments (e.g., pizza takeout and delivery establishments)

•    Grocery stores

•    Retail confectionary stores

•    Superstores

•    Quick-service restaurants

•    Table-service restaurants

The ACA considers each of these retail food establishments sellers of “restaurant-type food,” rendering them “similar” to restaurants and within the scope of the ACA and the Menu Labeling Rule.

Who Is Excluded?
Trains, buses, airplanes and other “mobile food operations without a fixed position or site, such as food trucks” are excluded from the requirements.

The ACA does not prevent states from enacting labeling requirements for warnings concerning food safety or nutrition labeling for noncovered establishments, such as those with fewer than 20 locations. Many states have introduced, passed or implemented laws governing who, what, when, where and how food establishments must label food. The patchwork of state laws and regulations threatened to create unneeded complexity for an industry looking for uniformity, and a federal rule of national application had the industry’s support. Notable among the state regulatory efforts is the New York “Sodium Mandate” that went into effect December 1, 2015. On February 24, 2016, a New York City trial court refused to invalidate the law. While this industry challenge is an important component of establishing a coherent national regime, the federal rule does not entirely preempt state and local regulations.

For noncovered establishments such as certain schools, hospitals, transportation carriers, movie theaters and chains with fewer than 20 locations, voluntary registration and participation in the federal program provides an option to avoid complying with multiple state or local requirements. While the federalism and preemption issue was murky in the earlier version of the rule, the final rule creates food nutrition labeling requirements that preempt nonidentical state and local nutrition labeling requirements. It is uncertain whether there will be challenges to the constitutionality of the Menu Labeling Rule on federalism or compelled speech grounds.

FDA adds some optimistic statistics in its estimate of the total number of individual menu items impacted by the Menu Labeling Rule: 207,052 individual menu items and a mere 15 minutes per menu item to perform the nutrition analysis.

The ACA and Menu Labeling Rule are not designed to address food safety. Rather, Congress in its wisdom reasons that because “overconsumption of calories is one of the primary risk factors for [being] overweight and obesity” and “many people do not know or underestimate the calorie and nutrient content of [restaurant] food,” providing “accurate, clear and consistent nutrition information, including the calorie content of foods” will solve the “epidemic of obesity” and accompanying health problems. But the empirical data from studies of restaurants that post caloric information found that some restaurants showed changes in per purchase caloric values[3] while others found no change,[4] particularly with children.[5] The menu law is lean on scientific support for the conclusion that more information on restaurant menus will cause overweight consumers to eat less and be healthier. As with the ACA itself, it will be years before we know whether the Menu Labeling Rule will achieve any health benefit. In the interim, the regulation goes into effect on December 1, 2016. Businesses should designate “responsible individual[s]” at both the establishment and corporate headquarters to ensure compliance and accurate record-keeping. This designation should be coupled with education and training and should be one of the first steps taken to avoid violating the ACA or Menu Labeling Rule.

While some consumers remain ambivalent on the new labeling rules, many also welcome the information to make informed dietary and nutritional choices. Regulators are poised to impose the new regime with expanded oversight through inspections, review of records and product testing. But the greatest risk may be the new class of food lawyers setting their litigation sights on the new regulations.

FDA is very clear that the new Menu Labeling Rule is focused on requiring nutritional and calorie information and not on food safety, “reiterate[ing] that state or local requirements for statements in food labeling providing for warnings concerning food safety are not preempted” and remain subject to state law and oversight. Stay tuned for updates further detailing how the federal government and the states will enforce the new Menu Labeling Rule.   

Michael A. Walsh , Esq., is a partner at Strasburger & Price. He serves as chair of the firm’s food, drug & medical device and products liability industry teams.