April 1, 2010Client Alert

New Healthcare Legislation Requires Most U.S. Chain Restaurants and Vending Machines Operators to Disclose Caloric Information

As part of its recent passage of The Patient Protection and Affordable Care Act, the United States Congress has promulgated a national standard regulating the disclosure of specific nutritional information for certain menu items. The new measure – entitled Nutrition Labeling of Standard Menu Items at Chain Restaurants – amends the U.S. Federal Food, Drug, and Cosmetic Act by establishing a federal standard of menu labeling requirements. Unlike many of the state and local ordinances enacted in recent years, the federal law applies to U.S. food establishments that are part of a chain with twenty or more locations doing business under the same name (regardless of the type of ownership of the locations) and offering for sale substantially the same menu items. Restaurants fitting that definition will be required to provide calorie information on their menus, menu boards and drive-thru displays for each “standard menu item” and for each serving of food at a salad bar or a buffet line (or similar self-service facility), as well as a “succinct statement concerning suggested daily caloric intake,” which is designed to enable the public to understand the significance of the caloric information provided.

The legislation also requires covered establishments to inform customers that additional nutritional information for each standard menu item will be provided upon request. The additional information to be provided would be similar to what is currently required by the Nutrition Labeling Education Act for packaged foods, which deems a food misbranded unless its label bears nutrition information that provides: (i) the serving size or other common household unit of measure customarily used; (ii) the number of servings or other units per container; (iii) the number of calories per serving and derived from total fat and saturated fat; (iv) the amount of total fat, saturated fat, cholesterol, sodium, total carbohydrates, complex carbohydrates, sugars, total protein, and dietary fiber per serving or other unit; and (v) subject to conditions, vitamins, minerals or other nutrients.

The new legislation requires the Food and Drug Administration (“FDA”) to propose specific regulations no later than a year after the enactment. Those regulations will be finalized through a formal rulemaking process and the FDA must provide quarterly reports on its progress to Congress. While the new requirements will also apply to operators of 20 or more vending machines, the menu labeling bill exempts small businesses and does not apply to items that are not typically listed on a menu or menu board (such as condiments), daily specials, customized orders or temporary menu items. It remains to be seen whether the federal legislation will override state or local ordinances that require more detailed nutritional information to be disclosed upfront, as opposed to only upon request under the federal legislation.

Some critics contend that, despite its laudable intentions, the measure does not go far enough in protecting restaurant owners and vending machine operators from potential class action lawsuits over the accuracy of the information provided. Two years ago, Applebee’s Weight Watchers menu items attracted a number of (still pending) class action and consumer lawsuits alleging that the company misrepresented the fat and caloric content of some of its popular items. Other well known chains, including Chili’s, Romano’s Macaroni Grill and On the Border, have similarly been the target of class action lawsuits over alleged mislabeling.

The concern over copy-cat litigation is high, particularly so because a recent study by Tufts University reported a trend of under-reporting of caloric content of foods sold in restaurants and retail stores. The researchers determined that restaurant meals averaged 18% more calories than posted, while packaged foods had an average of 8% more calories than their labels suggested. The researchers examined meals from a variety of national full-service and quick-service restaurant chains along with grocery store frozen meals. The authors concluded that the sample was too small to conclude that underreporting is rampant. As presently formulated, the new regulations provide that a restaurant or similar retail food establishment shall have a reasonable basis for its nutrient content disclosures, including nutrient databases, cookbooks, laboratory analyses and other reasonable means. The regulations do not provide immunity from liability for good faith, albeit inaccurate, disclosures.

Although the new law will not go into effect until implementing regulations are agreed upon, all restaurant chains and operators of vending machines are advised to review the new legislation, consult legal counsel to determine whether it applies, review the testing of their standard menu items and ensure their caloric data is accurately disclosed in a clear and conspicuous manner.

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