>> Business Law and Ethics
Hampton Creek, a food company that makes plant-based egg substitutes, markets a food item under the brand name "Just Mayo." "Just Mayo" is a substitute for mayonnaise that meets the requirements of a vegan diet. Ordinary mayonnaise contains egg yolks, which vegans do not eat. "Just Mayo" uses only plant foods to create a sauce that approximates the taste and texture of ordinary mayonnaise.
Hampton Creek sells two flavors of "Just Mayo": regular and "sriracha." "Sriracha" is the name of a condiment based upon spicy peppers.
On August 12, 2015, William A. Correll, Jr. sent a "Warning letter" to Hampton Creek. Correll is the Director of the Office of Compliance in the Center for Food Safety and Applied Nutrition. The Center for Food Safety and Applied Nutrition is a division of the United States Food and Drug Administration (FDA). The FDA is a unit of the United States Department of Health and Human Services (DHHS). The letter asserts that both "Just Mayo" flavors may not be sold in the United States under its current brand name or with its current label, pursuant to the Food, Drug, and Cosmetic Act (FDCA) and its associated regulations.
Mr. Correll's office was first made aware of the potential noncompliance of Just Mayo with food labeling and marketing law because of a lawsuit, alleging noncompliance by Hampton Creek, filed by the Unilever Corporation. Unilever is the leading American manufacturer of ordinary, egg-based mayonnaise. Unilever's mayonnaise is sold under the brand names "Hellmann's" and "Best Foods." In April 2015, Unilever dropped its lawsuit, without prejudice to its ability to refile.
After it received the warning letter, Hampton Creek conducted a negotiation with the Office of Compliance. Hampton Creek submitted a revised label to the Office. This new label, among other things, retained the original brand name "Just Mayo"; retained the original logo, which includes a picture of an egg; enlarged and made more prominent the words "egg-free"; and offered a definition of the word "just."
On December 18, 2015, the Office of Compliance sent a letter to Hampton Creek that stated that, with the new label, the "Just Mayo" products would be in compliance with the law and could lawfully be sold in the United States.
Imagine that you are an attorney with the Office of the General Counsel in the Food and Drug Administration. Your office is reviewing this matter. Your supervisor has learned from a lawyer at Unilever that Unilever intends to file a formal agency appeal with FDA alleging that Just Mayo, even with its new label, may not be lawfully sold in the United States. Unilever's appeal will allege that the 18 December letter permits unlawful behavior. Your supervisor has also learned from lawyers at Hampton Creek that, should the FDA withdraw, alter, or materially supplement the 18 December letter, Hampton Creek will allege that its initial label is entirely lawful and seek to market its product with that original label. Hampton Creek, in other words, will allege that the 12 August letter misstated and misapplied the FDCA and its associated regulations. Your supervisor tells you that the FDA has no preference between Unilever and Hampton Creek.
Its only goal is correctly to apply the Act and its associated regulations.
Your supervisor also tells you to do no research, and to use only the packet of information that she has prepared. That packet is attached to this document. It includes:
(1) [starting at packet page 5] Relevant sections of the Food, Drug, and Cosmetic Act
(2) [starting at packet page 17] Relevant sections of chapter 21 of the Code of Federal Regulations (CFR)
(3) [starting at packet page 21] Warning letter from FDA to Hampton Creek Foods, August 15, 2015
(4) [starting at packet page 25] Label for jars of Just Mayo prior to August 15 letter (top half of page); revised label after negotiation with FDA (bottom half of page)
(5) [starting at packet page 26] Close-out letter from FDA to Hampton Creek Foods, December 18, 2015
(6) [starting at packet page 28] Amazon.com page for Just Mayo, downloaded April 4,2016
Each of these items is appended to this document. Some material in items (1) and (3) has been removed to make the problem more tractable; omissions are indicated by white space.
Your supervisor asks you to write a memo that:
1. States the argument Unilever is likely to make in its appeal;
2. States the arguments that Hampton Creek is likely to make should FDA modify, withdraw, or materially supplement its 18 December letter; and
3. Recommends to the General Counsel how FDA should respond to these arguments, and what course it should adopt when regulating the sale and labeling of Just Mayo products. Write the memorandum.