From Cans to Labels: Effects of Government Activity on the Craft Beer Industry

Posted in Food & Beverage Industry

Resiliency and innovation are hallmarks of the craft brewing industry. From experimenting with new ingredients to finding ways to survive in the face of prohibition, developing creative solutions to challenges is something we’ve come to expect from our favorite craft brewers. 2018 tested that resiliency, both politically and economically. Trade policy has created a shifting playing field, with tariffs threatened and enacted, and trade agreements proposed and dismantled. 2018 ended, and this year began, amidst the longest federal government shutdown in history. These unique conditions have affected—and continue to affect—most industries, and the craft beer industry is no exception. As part of an already constantly changing industry, breweries offer an informative glimpse into possible developments we might see in coming years.

Read Kathleen Kline’s article, “From Cans to Labels: Effects of Government Activity on the Craft Beer Industry,” published in The Legal Intelligencer Feb. 23, 2019.

State of California Passes Law Limiting Sugary Drinks Offered in Children’s Meals

Posted in California, Food & Beverage Industry, GT Alert

On Jan. 1, 2019, a new law aiming to limit children’s intake of sugary beverages became effective. California Governor Gavin Newsom signed the “Children’s Meals” law on Sept. 20, 2018, in an effort to combat the rising obesity rate in California, which increased 250 percent between 1990 and 2016. The Children’s Meals law modifies the California Health and Safety Code to require that all California restaurants make the default beverages offered on a children’s menu: (1) water, sparkling water, or flavored water, with no added natural or artificial sweeteners; or (2) unflavored milk or a non-dairy milk alternative with no more than 130 calories per container or serving. Restaurants in California may provide or sell alternative beverages to children, but only upon the customer’s request.

To read the full GT Alert, click here.

Illinois Supreme Court Holds No Showing of Actual Harm Needed to State Claim Under Biometric Information Privacy Act

Posted in Data Protection, GT Alert, Litigation

In a unanimous decision issued Jan. 25, 2019, the Illinois Supreme Court held that a plaintiff need not plead or prove actual harm to bring a claim under Illinois’ Biometric Information Privacy Act (BIPA). The court’s decision in Rosenbach v. Six Flags Entm’t Entertainment Corp. settles a split among Illinois’ appellate courts, which centered on what a plaintiff needs to plead to be considered “aggrieved” under BIPA.

BIPA, 740 ILCS 14/1, et seq, regulates how private entities may collect and use an individual’s biometric information (e.g., fingerprint, facial feature, or retina information). Illinois is one of a few states that has enacted a statute to protect biometric information, and it is the only state that provides a private cause of action for individuals. Under BIPA, “[a]ny person aggrieved by a violation of [the] Act shall have a right of action.” (Emphasis added.) 740 ILCS 14/20.

To read the full GT Alert, click here.

VA Supreme Court Adopts Take Home Asbestos Liability Exposure

Posted in Alert, Asbestos Litigation

On Oct. 11, 2018, the Virginia Supreme Court extended the duty of care owed by an employer beyond just employees to any family members or third parties who may be affected by the employer’s action. In a 4-3 decision, the court ruled in Quisenberry v. Huntington Ingalls, Inc. that if an employer knew or should have known that an employee’s clothing dusted with asbestos could be handled by others, the employer owed a duty of care to those other people. Recognizing that the impact of this decision on tort law and business litigation in general will extend beyond the asbestos claims at issue in the case, the dissent warned that after this decision, “no one will be able to predict who else among the host of possible targets will be subjected to this novel theory of liability.”

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It’s the Law: Don’t Sell Your Homebrew!

Posted in FDA, Food & Beverage Industry, Food Litigation

Homebrewing and drinking craft beer are both widely popular. Currently, there are more than 6,000 craft breweries in the U.S., and over 2,000 homebrew clubs. As brewing for fun and profit has become more widespread, the applicable legal framework has also developed – and compliance is just as important for hobbyists as for professionals.

At the outset, it’s important to note that homebrewing and commercial brewing are subject to very different sets of laws. The most basic distinction is that homebrew can’t legally be sold, a golden rule (and actual rule) those of us in the homebrewing community can’t be reminded of enough. Therefore, homebrewers are unaffected by many of the regulations for-profit brewers must comply with – but are limited in what they can do with the final product (i.e. you can’t sell it).

Brewing at any scale requires a lot of water. On average, seven gallons of water are needed to make one gallon of beer – and most of that water ends up as waste. Commercial breweries must obtain Industrial User permits, allowing them to discharge wastewater to municipal treatment plants, if they discharge an average of 25,000 gallons per day or more of water. Each permit will describe and limit what compounds the discharged water may contain, and heavy fines may be levied if the permit’s terms are violated. In 2016, Pennsylvania brewery Yuengling learned firsthand what the cost of noncompliance can be – the brewery entered a consent decree with the United States to resolve a dispute over alleged discharge permit violations, agreeing to pay nearly $10 million in combined facility improvements and penalties – expenditures of the type we avoid by not selling homebrew. Yuengling’s discharges primarily contained sugar and yeast – not toxic or hazardous compounds – and exceeded permit limits for phosphorus and zinc, pH, and biological oxygen demand.

Fortunately for homebrewers, smaller production volumes obviate the need for discharge permits and much of the concern over wastewater disposal. In Pennsylvania, homebrew production is limited to 300 gallons annually per household – an amount far lower than would trigger discharge permit requirements. So long as you adhere to that limit, you should avoid regulatory scrutiny. Don’t forget – not selling your homebrew helps you avoid regulatory scrutiny as well. While penalties for brewing water disposal are generally not applicable to homebrewers, best practices in water management should be followed. Water used for cleaning brewing equipment or chilling wort can be dumped down the drain or used to water a yard or garden. However, brewing effluent, like other waste, shouldn’t be dumped into storm drains or bodies of water. Particularly in drought-prone areas, water conservation should be a focus. Water that’s piped through a counterflow chiller, for example, generally remains clean and can be used to wash equipment after brewing, or for other purposes. A batch of sanitizing solution – which is mostly water – can be used to clean multiple items before losing effectiveness, and most commercial sanitizers used by homebrewers are biodegradable and non-toxic.

The other main biproduct of brewing is spent grain – malted barley and other grains from which most of the fermentable sugar has been extracted. Despite its name, spent grain still contains nutrition, and lends itself to a variety of uses. Breweries commonly donate or sell spent grain to be used as animal feed, eliminating the need for costly disposal of the would-be waste. This practice is allowed by the FDA, so long as the brewers comply with human food safety regulations, ensure spent grains aren’t commingled with other waste or contaminants, and do not transform the grains after brewing by cooking or otherwise processing them. The agency considered more stringent handling and packaging rules for breweries offering spent grains as animal feed in late 2013, but withdrew the proposal following widespread industry pushback against what were expected to be costly and duplicative requirements.

Homebrewing isn’t subject to these regulations under which the FDA allows spent grains to be sold as animal feed. Therefore, just as you should never sell your homebrew, entrepreneurial homebrewers should not sell their brewing biproducts either – at least, not without researching all requirements governing the intended use of the grains or other waste. Homebrewers can, however, use their spent grains for personal consumption or composting. Because spent grain output from a home operation is much smaller than that of a commercial brewery, local waste management should easily dispose of whatever’s left over once you’ve had your fill of spent grain bread (or granola, or pizza dough, or pretzels, or dog treats…) and your compost bin and your neighbors’ are overflowing.

If you’ve read this far, you’ve probably gathered that you’re not allowed to sell your homebrew. And I can’t accept homebrew in exchange for legal services. I know, it’s a bummer. But look on the bright side: as homebrewers, we deal with far fewer regulatory restrictions on our brewing and waste disposal processes. And we can be innovative and experimental, free to break the law of the Reinheitsgebot.

Oh, one last thing: don’t sell your homebrew!

Kathleen Kline is a litigator and environmental lawyer who handles a variety of matters, including disputes over water pollution as well as professional liability. Kathleen also serves as Legal Advisor to the Philadelphia Homebrew Club, in which capacity she constantly reminds Club members that it’s against the law to sell homebrew.

Illinois Proposes Stricter Lead Rules for Public Intervention, Enforcement Actions

Posted in Consumer Safety

Illinois is proposing a new rule that would lower the state’s “action level” for children with lead in their blood. The new rule would also stiffen penalties for those who violate the Lead Poisoning Prevention Act and Code.

The rule, proposed by the Illinois Department of Public Health (IDPH), would lower the threshold level of lead in a child’s blood that would require state officials to intervene. Currently, that level is set at 10 micrograms per deciliter. The proposed rule would lower the level to 5 micrograms per deciliter, which is the level recommended by the Centers for Disease Control and Prevention (CDC).

Any blood test results showing a child has blood lead levels at or above 5 micrograms per deciliter would require state officials to take various actions, including visiting the child’s home. The rule requires state officials to provide information to the child’s parent or guardian concerning the risks posed by lead and how to reduce a child’s lead exposure. Under the rule, any blood test showing a child has elevated lead levels must be reported to the IDPH within 48 hours.

Public officials expect lowering the action level will affect thousands of children in Illinois. According to the IDPH, of the 229,000 children tested for lead in 2017, more than 7,000 children had blood lead levels at or above 5 micrograms per deciliter. But more than 5,600 of those children had blood levels below 10 micrograms per deciliter, meaning that they would not receive state intervention under the current rule. The CDC has recommended lowering the action level to 5 micrograms per deciliter since 2012 and based the recommendation on a growing number of studies that found even low blood lead levels may cause life-long negative health effects for children.

The new rule would also expand the IDPH’s enforcement authority. It would allow the IDPH to levy fines not only against licensed professionals, like lead abatement contractors, but also against anyone who violates the Lead Poisoning Prevention Act or the Code, which would include property owners who fail to perform lead remediation on properties where affected children live.

The rule would also stiffen penalties for violators, raising the maximum penalty for first-time offenders from $1,000 to $5,000, and the minimum penalty for repeat offenders from $1,000 to $5,000. The rule would also raise fines from $1,000 to $5,000 for violations that cause lead dust or debris to be spread to surrounding areas during remediation work.

The IDPH published its first notice of the proposed rule in the Illinois Register on Aug. 17, 2018 and is accepting public comment through Oct. 1, 2018. The citation for the Lead Poisoning Prevention Code is 77 Ill. Adm. Code 845.

˘ Not admitted to the practice of law

Appellate Court Opens Door to Jury Trials in Proposition 65 Cases

Posted in Class Action Defense Strategies, Class Action Litigation, Class Action Suits, Litigation, Prop 65

The California Court of Appeal, First Appellate District (First District) recently reversed course on an important issue in the Proposition 65 world by indicating that a jury trial may be available to defendants in certain circumstances. The decision, Nationwide Biweekly Administration, Inc., et al., v. The Superior Court of Alameda County, Opinion, A150264, (June 13, 2018), rebuked both the legal reasoning and conclusion of the First District’s precedent on the issue, DiPirro v. Bondo Corp., 153 Cal.App.4th 150 (2007), which held that Proposition 65 defendants did not have a right to a jury trial.

In DiPirro, the court reasoned that jury trials are not available in Proposition 65 cases because the essential character and purpose of the law is to provide equitable relief, not to impose civil penalties. Id. at 180-81. DiPirro was based on a widely recognized principle in American jurisprudence under the Seventh Amendment to the U.S. Constitution – that litigants in traditional legal actions (i.e., monetary damage cases) are guaranteed the right to a jury trial, whereas litigants in equitable actions do not have such a right.

The First District’s recent decision in Nationwide Biweekly Administration expressly calls into question the legal reasoning and conclusion of DiPirro. The First District states that the DiPirro court misconstrued the rule, and that “a right to jury trial does exist as to liability in a government enforcement action seeking statutory penalties” but does not exist as to the amount of those penalties. Of course, Proposition 65 is not strictly an equitable relief statutory scheme – it includes a significant penalty component. On this basis, the First District stated that “we cannot endorse DiPirro’s analysis” given its unsupported conclusion that a right to jury trial does not exist when determining liability for penalties under Proposition 65.

Nationwide Biweekly Administration looks to be a positive development for defendants in Proposition 65 cases, but it does not expressly overturn DiPirro nor undo other fundamental problems with the law, including the fact that the burden of proof is often placed on the defendant. While the First District’s decision is a step in the right direction, it likely will not alter the ultimate conclusion for most Proposition 65 defendants – that settlement is a more cost-effective approach than engaging in lengthy litigation.

Greenberg Traurig’s Gene Livingston to Chair Prop 65 Clearinghouse Annual Conference

Posted in Event, Prop 65

Greenberg Traurig’s Gene Livingston, shareholder and chair of the Proposition 65 & Green Chemistry Practice, will be chairing Prop. 65 Clearinghouse’s 13th Annual Prop. 65 Conference at the Julia Morgan Ballroom in San Francisco. The Conference will take place on Monday, Sept. 24. According to the organization, attendees will be privy to hands-on advice from government, industry, and plaintiff organizations. The conference will include panels on the impact of OEHHA’s changes to the Prop. 65 warning regulations, how new chemical listings affect your business, and the use of litigation to regulate chemicals in food. Register here.


Standing and the Right to Sue Under Illinois’ Biometric Information Privacy Act

Posted in Class Action Suits

Greenberg Traurig Shareholder Brett M. Doran authored an article published in DRI titled “Standing and the Right to Sue Under Illinois’ Biometric Information Privacy Act.” The article examines Illinois Biometric Information Privacy Act (BIPA) class actions and how courts have treated challenges to plaintiffs’ standing or right to sue. Click here to read the full article.

Prop 65 Ruling Based on Old Science

Posted in Prop 65

Greenberg Traurig Shareholder Anthony J. Cortez and Associate Will Wagner co-authored an article in the Tea and Coffee Trade Journal titled “Prop 65 Ruling Based on Old Science,” discussing a recent Proposition 65 ruling that affects the sale of coffee in the state of California. To read the full article, please click here.