Jason Foscolo, Esq. jason@foodlawfirm.com (631) 903-5055 Food Safety Modernization Act Enforcement Prepared by Lauren Handel, Esq.
FDA s Enforcement Powers and Rights of Regulated Entities The Food Safety Modernization Act ( FSMA ) substantially increased FDA s powers to enforce federal food laws. This section provides an overview of the primary tools now available to FDA to enforce the requirements of the federal Food, Drug and Cosmetic Act (the Act ) and related regulations. This section also discusses the rights of regulated entities in defending against FDA enforcement actions. The FDA has a wide variety of enforcement tools at its disposal which it may use to conduct its mission. These tools graduate in severity, beginning with purely administrative inspection reports and letters of caution up to and including criminal prosecutions of the most egregious violators. FDA has discretion to choose which enforcement tools it uses to prosecute any particular violation. It also has discretion to decide not to take enforcement action. The agency s choice of which enforcement tool (or tools) to use in any given circumstance depends on a number of factors including the agency s objectives, the seriousness of the alleged violation, the potential risk to human or animal health that may result from the violation, and the resources available to the agency. FDA s enforcement tools fall into three general categories: (1) administrative actions that the agency itself may take against a regulated entity; (2) civil actions in federal court for seizures and injunctions; and (3) criminal actions in federal court. Like most federal agencies, FDA cannot appear on its own behalf in court proceedings. Therefore, FDA refers civil and criminal actions to the U.S. Department of Justice for prosecution. I. Administrative Enforcement Actions Administrative powers are those that the agency has authority to exercise itself, without going to court. The principal administrative enforcement tools that FDA has in its toolkit are: inspections, warning letters and untitled letters, administrative detention, product recall, and suspension of facility registration. Inspections The Act authorizes FDA to conduct inspections of factories, warehouses, establishments, and vehicles in which food in interstate commerce is manufactured, processed, packed, held, or transported. 1 FSMA requires FDA to inspect registered food facilities at a mandatory frequency based on risk. 2 Under FSMA, high-risk facilities must be inspected at least once in the first five years following enactment of the law and then at least once every three years thereafter. Non-high-risk facilities must be inspected at least once in the first seven years following enactment and then at least once every five years thereafter. For now, FDA is categorizing facilities as high-risk or non-high-risk, primarily on the basis of: the known safety risks of the food manufactured, processed, packed, or held at the facilities; the facilities compliance history; the establishment type or type of activity conducted at the facility (manufacturer/processor, repacker/packer, etc.); and 1 "21"U.S.C." "374. 2 "21"U.S.C." "350j.
the number of years since the facility s last inspection. When the data becomes available to the agency, FDA also will consider the rigor and effectiveness of a facility s hazard analysis and risk-based preventive controls in determining whether the facility is highrisk or non-high-risk. The Act gives facility owners a few very important rights during the inspection process. The Act requires that inspections be conducted by authorized officials who show credentials and provide written notice (FDA form 482) to the owner or person in charge of the facility. The Act also states that inspections must occur at reasonable times generally, within business hours and must be conducted within reasonable limits and in a reasonable manner. In considering what are reasonable limits and a reasonable manner of conducting inspections, courts generally have given FDA broad leeway. The Act expressly permits FDA to inspect certain things. The Act specifically provides that FDA may inspect equipment, finished and unfinished materials, containers, and the labeling of all products within the facility. 3 The Act also permits FDA to take and test samples of materials, and requires that it give the facility owner or operator a written receipt, a split sample, and a copy of any analysis results FDA obtains. 4 In addition, the Bioterrorism Act of 2002 amended the Act to authorize FDA to inspect records when it reasonably believes that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals. FSMA further broadened this record-inspection power to include not only records relating to the particular food articles believed to be adulterated and dangerous, but also to other articles of food likely to be affected in a similar manner. 5 The Act prohibits inspection of financial data, sales data, pricing data, personnel data, and research data. In practice, FDA inspectors often do more than the Act expressly permits them to do. For example, even though the Act does not specifically authorize interviews, FDA inspectors routinely question facility managers and employees and sometimes ask individuals to sign written statements or affidavits. Likewise, inspectors often take photographs, even though the Act says nothing about that. In addition, FDA inspectors might ask to see records in circumstances other than those specifically provided for in the Act. As long as the facility owner or operator consents to these activities, they generally are permissible, and FDA can use any evidence obtained through such tactics to establish that violations have occurred. Moreover, even if the facility owner or operator does not consent, such inspection methods are likely to be considered reasonable and therefore lawful. Following an inspection, FDA provides a List of Inspectional Observations (FDA form 483) to the facility owner or operator. The agency expects the company to take corrective action on any observed deficiencies. If corrective action is not taken to FDA s satisfaction, the agency may pursue further enforcement action. Warning Letters and Untitled Letters In most cases when FDA becomes aware of a violation, it takes informal action by issuing a warning letter or, in less serious circumstances, a so-called untitled letter to the responsible company. Such letters 3 "21"U.S.C." "374. 4 "21"U.S.C." "372(b),"374(c)4(d). 5 "21"U.S.C." "350c(a),"374(a)(1).
explain FDA s position on the law and how the recipient is in violation. FDA issues such letters in order to prompt corrective action, to document its finding of a violation, and to document that it provided notice of the violation to the recipient. In the event that the company repeats the violation, the agency can use the letter to show that the company is a repeat-offender that knowingly broke the law. Such communications may be the basis for future FDA action, so they should not be considered lightly. A warning letter advises the recipient that it may respond within a certain period of time, generally 15 days. If the response satisfies the agency that corrective action has been taken, FDA might not pursue formal enforcement action. However, the issuance of a warning letter does not commit FDA to any particular course of action. And it may take formal enforcement action without first issuing a warning letter. Administrative Detention Under the Act, FDA may order the administrative detention food products when it has reason to believe that an article of food is adulterated or misbranded. 6 An administrative detention order temporarily prohibits food from being moved, consumed, altered, or tampered with for up to 30 days. The purpose of the order is to prevent the products from entering the supply chain or reaching consumers and to preserve the status quo while FDA initiates or considers whether to initiate other enforcement action, such as an action for seizure or injunction. The power of administrative detention is more broad than most would assume. It is well within the imagination of any consumer or producer that the FDA may detain food products if they pose a threat to the health or safety of those who would consume a product. What most food producers and processors do not understand, however, is that the FDA s power of administrative detention covers food that is misbranded. The FDA considers any product which is not labeled in conformity with all of its labeling regulations to be misbranded. In other words, it must be noted that the FDA can detain any item of food with an inaccurate label, even if the label deviates in a relatively minor way. FSMA significantly expanded FDA s administrative detention power. Under prior law, FDA could order administrative detention only when it had credible evidence or information indicating that an article of food presented a threat of serious adverse health consequences or death to humans or animals. The more liberal standard provided by FSMA allows FDA to detain food products upon a mere belief that the products are adulterated or misbranded, without regard to the actual risk the products pose. The owner of products detained by FDA may appeal the order to FDA and may request a hearing. The appeal process generally follows the rules for regulatory hearings set forth in 21 C.F.R. Part 16 (discussed below) with some modifications. 7 Given that detention orders can last no more than 30 days, the administrative appeal process is expedited with appeals relating to perishable goods proceeding on a faster track than for non-perishable goods. The presiding officer hearing the appeal must issue a final agency decision confirming, modifying or terminating the order of detention within five days after the appeal is filed. No party may petition for further administrative reconsideration of the officer s decision. If the government files an action in court for seizure or injunction, the appeal is automatically terminated. 6 "21"U.S.C." "334(h)(1)(A). 7 "See#21"C.F.R."Part"1,"Subpart"K.
Product Recall Before FSMA, FDA had no authority to order recalls of food products. It only could recommend to companies that they voluntarily recall products that were misbranded or adulterated. Under current law, as amended by FSMA, FDA may order firms to recall a food article when there is a reasonable probability that it is adulterated or misbranded with regard to allergen labeling and the use of or exposure to such article will cause serious adverse health consequences or death to humans or animals. 8 Before ordering a recall, FDA first must give the responsible party an opportunity to cease distribution and conduct a voluntary recall of the products at issue. If the responsible party refuses, FDA may order the party to cease distribution and to notify others in the supply chain of the recall. As required by the Act, FDA must provide an opportunity for an informal hearing as soon as possible and no later than two days after the recall order is issued. The hearing provides the party responsible for the recalled products to challenge the actions required by the recall order and to present its case on why the recall is inappropriate. After the hearing, if FDA determines that the recall is necessary, it may, as appropriate, amend the recall order, set a timetable for the recall, require reporting on the progress of the recall, and notify the public of the recall. Alternatively, if the agency determines that the recall order was not warranted, it will vacate or modify the order. It can be assumed that FDA will follow its general procedures for regulatory hearings (discussed below) in conducting hearings on mandatory recalls. However, that is not entirely clear because the agency has not issued regulations or published guidance on the procedures it will follow. 9 Suspension of Facility Registration FSMA gave FDA a new enforcement power to suspend the registration of a noncompliant food facility and thereby prevent it from doing business. If a facility s registration is suspended, it is prohibited from introducing food into commerce in the United States and from importing or exporting food. 10 FDA used this new authority for the first time on November 26, 2012, when it suspended the registration of Sunland Inc., a manufacturer of nut products, due to Salmonella contamination. FDA may order a suspension of facility registration when it determines that food manufactured, processed, packed, received, or held by a facility registered [in accordance with the Food, Drug & Cosmetic Act] has a reasonable probability of causing serious adverse health consequences or death to humans or animals. 11 FDA may suspend the registration of any facility that created, caused, or was otherwise responsible for the risk, as well as any facility that packed, received, or held the food and that knew or had reason to know of the risk. 12 The Act requires that the registrant be given an opportunity for an informal administrative hearing to be held within two days after the order is issued or on another date agreed to by the registrant and FDA. At 8 "21"U.S.C." "350l. 9 "See"GAO,"FDA s"food"advisory"and"recall"process"needs"strengthening"(july"2012). 10 "21"U.S.C." "350d(b)(4). 11 "21"U.S.C." "350d(b)(1). 12 "21"U.S.C." "350d(b)(1).
the hearing, the registrant may challenge the actions FDA has required for reinstatement of its registration and present its case for why the registration should be reinstated. 13 If, after the hearing, the agency determines that the suspension of registration remains necessary, the registrant must submit a corrective action plan. Alternatively, based on its findings after the hearing, FDA may vacate or modify the order of suspension. FSMA requires FDA to issue regulations on the procedure it will use in suspending registrations; but FDA has not yet done so. In the meantime, based on the November 26, 2012, order to Sunland, it appears that FDA will follow its general procedures for regulatory hearings (discussed below) to the extent that they do not conflict with the procedures specifically required in the Act. II. Civil Enforcement Actions In addition to using its administrative powers, FDA can enforce the law by referring cases to the U.S. Department of Justice to bring civil actions in federal court for seizure 14 or injunction 15. The seizure process is relatively quick and efficient compared to the injunction process and, therefore, has been used more often. It is highly advisable for any food producer involved in a civil enforcement action to retain legal counsel. In the seizure process, the court immediately issues an order arresting (seizing) particular goods with a hearing to be held after the seizure. If a party with a claim to the products appears at the hearing and contests the seizure, the government must prove a violation. If it fails to do so, the court will release the goods from seizure. If the government is successful in proving its case, the court will order that the goods are condemned. The condemnation order may require the goods to be destroyed, sold, or reconditioned (corrected) so that they can be sold. The court also may order condemnation if no one challenges the seizure or if the owner of the goods consents to the condemnation order. In some cases, it may be in the owner s best interest to consent to condemnation to quickly resolve the action for example, before perishable goods spoil or lose value. In an action for injunction, the government seeks an order requiring a party to do something, such as to cease violations, clean up a facility, temporarily shut down operations, or permanently go out of business. Injunction actions are appropriate when it is likely that the defendant will continue to violate the law. FDA rarely seeks injunctions because they are resource intensive and take more time than other enforcement measures. For those reasons, FDA generally pursues injunctions only in cases when other enforcement efforts have failed and a company or person has repeatedly broken the law. III. Criminal Enforcement Actions Anyone who commits an act prohibited by the Food, Drug & Cosmetic Act may be prosecuted criminally and subject to fines and possible imprisonment. For a first offense that does not result in death, the law authorizes up to one year in jail and fines up to $100,000 for an individual or up to $200,000 for a 13 "21"U.S.C."350d(b)(2). 14 "21"U.S.C." "334. 15 "21"U.S.C." "332.
corporation. 16 For a misdemeanor that results in death, a second conviction under the Act, or for a violation with intent to defraud or mislead, a person may be sentenced to up to three years in jail and subject to fines up to $250,000 for an individual or $500,000 for a corporation. The Act imposes strict liability, which means that a person may be held criminally liable even if he did not intend to commit a violation. The government may prosecute companies as well as individuals responsible for a violation. Despite the low bar for establishing strict criminal liability, FDA s practice has been to seek criminal prosecution only in cases involving willful wrongdoing or fraud on consumers or where violations have resulted in serious injuries or death. Before referring a case to the Department of Justice, the person to be prosecuted has the opportunity for an administrative hearing. 17 IV. Rights of Regulated Entities in Administrative Enforcement Actions Entities regulated by FDA have a variety rights to defend themselves in enforcement actions. A company s rights in dealing with the agency come partly from the legislative limits on FDA s powers and partly from the procedural protections the law affords to regulated entities. Perhaps more important than any formal legal rights a company may have, it can protect its interests by actively engaging with the agency at every step of the process. A company may represent itself throughout the administrative process or it may engage an attorney to represent it in any dealings with the agency. Protecting a Company s Interests During an Inspection To best protect its interests in an FDA inspection, a company needs to manage the inspection as much as possible while cooperating with the agency s legitimate demands. It is in a company s best interest to cooperate with FDA inspectors and provide reasonable access to requested information. Indeed, it is a violation of the Act not to allow FDA inspectors to do their work. 18 However, it is possible to cooperate with the inspection while also taking steps to ensure that the scope and manner of inspection are reasonable, that business and confidentiality concerns are protected, that the information gathered by the agency is accurate and representative of all relevant circumstances, and that the company has all of the facts and evidence it will need to defend against any alleged violations. Before FDA inspectors show up at the plant, a company should have a policy in place for how it will handle inspections, and employees should be trained on the policy. Such a policy should cover; Appointing an employee or owner who will serve as a point person and primary contact for the inspectors; Staff guidelines for what materials or records may be shared with inspectors, and what records need not be shared with inspectors; Guidelines for responding to an inspector s questions during an inspection; 16 "21"U.S.C." "333;"maximum"fines"altered"by"the"Criminal"Fine"Improvement"Act,"21"U.S.C." "3571. 17 "21"U.S.C." "335. 18 "21"U.S.C." "331(f).
A procedure to handle FDA s requests for documents, photographs, samples, interviews, and sworn statements; When to call an attorney for supplemental guidance. By effectively managing the inspection process, a company can ensure that it is in the best possible position to defend against any deficiencies FDA may allege and possibly to prevent the agency from taking formal enforcement action. Rights To Be Heard and To Appeal At various points in the enforcement process, a company has rights to present evidence and make arguments to try to persuade FDA that no violation has occurred or that enforcement action is not needed. After an inspection, a company may respond to any alleged violations noted on Form 483, particularly by pointing out facts that are inaccurate or incomplete and by identifying any corrective actions that the company has taken to address FDA s concerns. A recipient of a warning letter certainly should respond in writing by the deadline set in the letter. And, if FDA takes formal administrative action such as, by issuing an order for detention, product recall, or suspension of a facility s registration the Act and regulations provide procedures for presenting evidence and argument in written appeals and hearings. It is highly advisable for any food producer to fully utilize all of these appeal options as assertively as possible. Regulatory Hearings As discussed above, when FDA issues an order for administrative detention, product recall, or suspension of a facility s registration, it must provide an opportunity for a hearing. FDA s general procedures for administrative hearings are set out in the regulations at 21 C.F.R. Part 16. These rules apply to the extent that they are not inconsistent with hearing procedures provided in the parts of the Act or regulations that specifically govern the enforcement action at issue. The rules provide that FDA must give the company charged with a violation notice of the opportunity for a hearing. The company then has a set amount of time to request a hearing. Even if a hearing is timely requested, FDA may deny the request unless the company shows that there is a legitimate factual issue to be resolved at the hearing. Thus, in requesting a hearing, a company should demonstrate that FDA s version of the facts is not accurate or complete. It is not enough to argue that FDA wrongly applied the law. If the request for a hearing is granted, FDA will appoint a presiding officer to hear the appeal. Before the hearing date, both sides are required to exchange information about the evidence they will present. FDA also must provide a comprehensive statement of its reasons supporting the enforcement action. At the hearing, both parties present their evidence and have the opportunity to cross-examine witnesses. Following the hearing, the presiding officer will make a recommendation to the Commissioner of FDA on whether to issue a final decision confirming, repealing or modifying FDA s order. In some circumstances, the presiding officer will make the final decision. When the Commissioner makes the final decision, a party generally can petition the Commissioner to reconsider his or her decision. Judicial Review
If a company loses its administrative challenge, it may appeal the matter to federal court. Importantly, a party cannot challenge the agency s action in court until it has exhausted the administrative appeal process. The court will review not only factual issues, but also legal arguments. After hearing all of the evidence and legal arguments, the court may affirm the agency s action or it may set it aside for several reasons, including that the agency s decision was arbitrary, unlawful, outside the agency s powers, or not supported by the facts.