Dark Side of Cannabis: Personal Injury Risks and Consumer Protection Lawsuits Arising from Mislabeling, Testing Fraud, and Potency Inflaction
The cannabis industry has undergone a rapid transformation over the past decade, spurred by evolving federal and state legislation. Yet, beneath the promise of legalization and medical innovation lies a growing public safety and misinformation crisis—rooted in testing fraud, labeling inaccuracies, and potency inflation. This article explores the darker undercurrents of the cannabis marketplace, examining how systemic deficiencies in testing, regulation, and enforcement are leading to consumer harm, lawsuits, and a breach of public trust.
Conditioned to believe THC potency correlates with quality and efficacy, many consumers gravitate towards products that purportedly have higher levels of THC. When faced with an array of choices, labels, numbers, and strain names, a flower or pre-roll customer will likely pick the item with the higher THC potency even if just by one or two percent. But if the product is mislabeled and instead of the advertised 42% THC pre-roll it is actually 25%, the consumer is dupped into buying a product he may not have otherwise bought. This not only stifles fair competition – based on true product quality, attention to detail, grow/processing methods, source ingredients, and genetics – but also puts the consumer at a disadvantage in not being able to fully trust labels and the lab reporting they are based on.
The Testing Crisis: Lab Shopping and Potency Inflation
Laboratory testing is the linchpin of cannabis product safety and consumer trust. Yet, despite stringent testing regulations and requirements, the practice of lab shopping—where producers seek laboratories that provide favorable results—has become pervasive and widespread. The biggest motivators that result in lab shopping are potency inflation (to sell at a higher price) and passing contaminated products (to not have to destroy products). Some microbial methods that are used to test cannabis do not recover common molds like botrytis (aka bud rot), leading to extreme under-reporting of mold and yeast.
For example, a recent NBC10 Boston news report highlighted these issues in Massachusetts where off-the-shelf marijuana sold at licensed dispensaries had elevated levels of mold and fungi. See https://www.youtube.com/watch?v=DsiD_1aXj0g. While the risks are low for most healthy consumers who purchase contaminated flower, for those who are immunocompromised mold exposure can lead to serious lung infections, systemic illness, and even hospitalizations. The owner of ProVerde Labs has warned the Massachusetts Cannabis Control Commission for years about these issues with little movement and says more oversight and off-the-shelf testing is needed.
Inaccurate labeling can lead to misdosing, unexpected effects, and potentially more serious health concerns. Prolonged exposure to heightened levels of mold, bacteria, and mycotoxins can lead to chronic health issues especially for immunocompromised individuals who are susceptible to fungal infections.
MJBizDaily highlights the probability that many of the products sold at licensed dispensaries in regulated states do not conform to applicable health and labeling laws. See https://mjbizdaily.com/colorado-cannabis-testing-experiment-yields-damning-pesticide-microbial-potency-results/. A frustrated manufacturer had flower and pre-rolls randomly purchased at local Denver area dispensaries tested for potency and contaminants by a state-regulated cannabis laboratory and the results were astounding:
Only 2 of the 15 purchased products (13%) complied with state regulations
Some products were found to have dangerous levels of contaminants
80% of products had THC content outside the 15% variance allowed under Colorado law
Four of the 15 cannabis samples tested (27%) revealed the presence of coliform bacteria (essentially feces) above the state limit for industrial hemp, and one pre-roll was found to have 12,000 CFU (colony-forming units) per gram, 120 times the legal limit for hemp products
One pre-roll sample was shown to have 780,000 CFU per gram, meaning it had 78 times the legal limit of viable microorganisms
Potency levels printed on labels averaged 34.2% higher than what was discovered in the tests
Besides the obvious health issues associated with clearing marijuana products for sale that should fail for pesticides, yeast, mold and/or microbial contamination, unreliable potency tests create an unfair marketplace where consumers often make purchases based on high-THC claims that are unfounded.
At the end of January, a Massachusetts testing laboratory filed a lawsuit accusing a slew of competitor labs of “fraudulent” practices that have led to inflated THC potency and manipulation of safety results thereby causing potentially tainted and contaminated products to flood the market. See https://www.wbjournal.com/article/framingham-cannabis-testing-lab-sues-competitors-claiming-deceptive-practices-result-in. Combating “lab shopping,” plaintiff MCR Labs LLC called out eight labs for purposefully reporting inaccurate test results to cater to the whims of cultivators and manufacturers looking to boast high THC levels. MCR Labs alleged that its unscrupulous competitors stole clients and business from honest labs that diligently and faithfully report accurate test results.
MCR Labs claims that because all competing laboratories should follow accepted and reliable scientific testing methodologies customers should receive consistently similar results across the board. Therefore, the differentiators for labs competing for the same clients should be price points and customer service, and not a willingness to artificially inflate potency results, conceal found contaminants, and provide favorable rather than accurate test results.
This is happening everywhere. Towards the end of 2024, representatives from two of New York’s 16 licensed testing labs wrote a letter to the New York cannabis regulatory body, the Office of Cannabis Management (OCM), asserting serious problems with testing laboratories inflating THC potencies and reporting impossible cannabinoid profiles for vape cartridges. Recently, a study conducted in New Jersey revealed that pre-rolls purchased at licensed dispensaries contained high levels of mold, yeast, and contaminants as well as did not have the THC potency advertised. In two of the tested products, yeast and mold levels were five times higher than the allowable limit.
Lab testing fraud, skewed results, data manipulation, and false reporting for profit and market share is a widespread problem affecting nearly every legalized state and recreational market resulting in mislabeling, deception, and increased consumer safety risks.
Lawsuits and Injuries
Mislabeled products with overinflated THC and/or CBD potencies may spur lawsuits from competitors for unfair competition, deceptive practices, and false advertising. The Lanham Act provides a cause of action for anyone harmed by “any false or misleading description of fact” or misrepresentation of the quality of the marketed goods, however, given the intrastate nature of cannabis commerce, competitors and consumers may fail to satisfy the “interstate commerce” requirement, especially as it relates to strictly state-regulated THC products as opposed to federally legal hemp-derived products. See 15 U.S.C. § 1125(a)(1)(B); see also Warner-Lambert Co. v. BreathAsure, Inc., 204 F.3d 87, 91-92 (3d Cir. 2000). Nevertheless, many states, including New Jersey, New York, and Pennsylvania have state specific unfair competition, deceptive practices, and consumer protection laws that may be invoked.
In August 2023, the Missouri Division of Cannabis Regulation (the “DCR”) initiated a recall of products sold by Delta Extraction “due to a credible and imminent threat to public health or public safety” arising out of Delta’s use of out-of-state hemp derived THC-A, which it then converted to THC distillate that it used to infuse vape cartridges, gummies, and edibles. Missouri regulations like those of most regulated states prohibit licensed producers from using THC products, including hemp-derived THC-A, that were produced or sourced outside of the state’s regulated program.
In other lawsuits consumers have alleged Δ8 products they consumed contained more Δ9 than legally permissible. In February 2024, a Georgia consumer brought a class action against Cloud 9 Online Smoke & Vape and other sellers of Delta-8 vape pens alleging that their products contained an unlawful concentration of Delta-9 THC. See Ledbetter, et al. v. Cloud 9 Online Smoke & Vape, LLC, et al., Case No. 1:24-cv-00538 (N.D. Ga. 2024). A recent class action filed against popular cannabis brand Stiiizy Inc. in Illinois federal court is the second lawsuit involving Delta-8 THC and THC potency, and should put Δ8 THC manufacturers on alert for similar lawsuits. See Byron, et al. v. Stiiizy, Inc., Case No. 3:24-cv-1082 (S.D. Ill. 2024). The lawsuits assert consumer protection violations, negligent misrepresentation and fraud due to health and safety risks posed by cannabis products said to contain more Δ9 THC than the federal limit.
In California, Central Coast Agriculture faced a class-action lawsuit alleging that their cannabis products contained lower THC levels than advertised. The court, however, dismissed the case, citing insufficient evidence connecting the lab test results to the specific products purchased by the plaintiffs.
In the underbelly of cannabis manufacturing plants workers sometimes perform their daily tasks in less than favorable conditions, exposed to potentially harmful molds, dust, contaminants, and allergens. Following the unexpected death of a 27-year old cannabis employee who collapsed while rolling joints in cannabis manufacturing facility in Massachusetts, the family filed a wrongful death suit against the company. Other such lawsuits including a flurry of recent lawsuits alleging Neptune’s Resources manufactured and sold a product dubbed “gas-station heroin” it knew or should have known could cause serious injury and death. See https://feldmanshepherd.com/firm-news/feldman-shepherd-files-wrongful-death-lawsuit-against-maker-of-neptunes-fix-following-death-of-32-year-old/. Plaintiffs contend that Neptune’s Fix contained tianeptine, which has been linked to seizures, coma and death and the subject of various FDA and state health department public warnings and announcements.
Lawsuits are expensive and the potential for multi-million-dollar verdicts, judgments, and liability exposure, it would behoove cannabis operators, re-sellers, and dispensaries to have indemnity contracts with manufacturers, adequate and appropriate insurance, and legal stewardship.
Florida DABT Clarifies 13CT “Caterer’s” License Requirements Through Updated Rule
The Florida Division of Alcoholic Beverages and Tobacco (DABT) promulgated updated language for Rule 61A-3.057, governing catered event enforcement and recordkeeping requirements for 13CT licenses. The changes represent DABT’s response to ongoing compliance challenges that have consistently frustrated both state and local permitting agencies.
The 13CT license framework has long been plagued by a fundamental issue: the absence of a clear definition for “catered event,” the very concept that underpins the entire licensing model. This definitional gap creates confusion among regulators and licensees alike, making consistent enforcement difficult and compliance uncertain.
Compounding these definitional challenges, the relative ease of obtaining a 13CT license and the absence of specific regulatory requirements contributed to a troubling trend of illegal “license rental” arrangements, where unlicensed vendors operate under the banner of legitimate 13CT licensees. This practice undermines the regulatory framework and creates unfair competitive advantages for non-compliant operators.
The updated rule introduces several key changes designed to strengthen oversight and ensure compliance. The rule now requires licensees to maintain comprehensive records, clarifies that the event contract and receipts associated with a specific “catered event” must be maintained with the newly promulgated form during the entire duration of the event, and retained for a period of three years following the date of the event.
Further, the rule now specifies that a representative of the 13CT licensee must be present at all times during the catered contracted event, which targets the illegal renting of a license by ensuring that the person responsible for the sale of alcoholic beverages is in fact associated with the identified licensee rather than a third-party.
These changes signal DABT’s commitment to closing regulatory loopholes when such items are addressable and ensuring that 13CT licenses operate within their intended parameters. The enhanced recordkeeping requirements and mandatory compliance demonstrations will likely make it more difficult for unlicensed operators to exploit the 13CT framework through rental arrangements. The updated rule also provides greater clarity for legitimate caterers seeking to understand their obligations, while giving enforcement officials clearer standards for evaluation and compliance verification.
Operators currently holding 13CT licenses should review their current practices to ensure alignment with the new requirements, particularly regarding on-site representation, documentation retention, and the ability to demonstrate statutory compliance through sales records.
While this updated rule addresses many of the operational compliance issues that have plagued the 13CT licensing framework, the underlying definitional challenges around “catered events” remain unresolved. Future regulatory developments may need to tackle this fundamental definitional gap to provide complete clarity for the industry.
Operators currently holding 13CT licenses should review their current practices to ensure alignment with the new requirements, particularly regarding on-site representation, documentation retention, and the ability to demonstrate statutory compliance through sales records.
2025 New York Legislative Session: 3 Alcohol Law Bills Await Governor’s Action
During the 2025 New York legislative session, three notable bills affecting the Alcohol Beverage and Control (ABC) Law passed both houses of the Legislature and will be delivered to Gov. Kathy Hochul during the second half of 2025 for her approval or veto.
S. 409-A would permit some retail licensees to purchase a small amount of wine and liquor from certain other retail licensees. Under the three-tiered system of alcohol production, retailers purchase alcohol from wholesalers, who in turn receive the product from manufacturers. New York retailers have been prevented from purchasing alcohol from other retailers under New York’s tied-house law. As a result, when an on-premises liquor establishment such as a restaurant runs out of a particular product, it has not been permitted to purchase any wine or liquor from an off-premises retailer such as a liquor store to address this shortage on an emergency basis. S. 409-A would allow on-premises retailers to purchase up to six bottles of wine or liquor in the aggregate per week from off-premises retailers for sale and consumption. The law would take effect 90 days after the governor signs the bill.
A. 6277-A would add a new section to the ABC Law to establish a brand owner’s license, allowing its holder to contract with New York manufacturers for the production of alcohol, appoint a New York wholesaler as an exclusive brand agent to negotiate payment for alcohol beverages, and sell alcohol to New York wholesalers. According to the Sponsor’s Memorandum, the purpose of the legislation is to encourage business opportunities in the manufacturing sector by allowing alcohol beverage producers to engage in contract manufacturing with major or emerging brands. The bill would permit co-packing arrangements common in the food and beverage industries but not previously allowed by the ABC Law with regard to New York alcohol sales.
A. 7040-B would authorize private membership establishments to apply for on-premises liquor licenses. A new license category for For-Profit Clubs engaged in recreational, patriotic, political, benevolent, or other purposes would be created, with an annual fee of $20,000. To date, New York has only licensed not-for-profit membership clubs. The legislation sponsors assert that the measure would support the nightlife and hospitality industry, an important economic driver for the state.
Other efforts to reform the ABC Law to ease burdens on liquor license applicants, especially those in New York City, were unsuccessful this year. These include proposals to reform or repeal the “200-Foot Rule,” which prohibits new liquor establishments within 200 feet of a church or school, and the “500-Foot Rule,” which requires applicants seeking an on-premises license within 500 feet of three or more existing liquor licenses to demonstrate to the New York State Liquor Authority that granting an additional license in the vicinity is in the public interest.
Federal Jurisdiction and Review Standards at Issue in Cases Ranging from Terrorism to Tobacco – SCOTUS Today
With six more decisions, the U.S. Supreme Court decided no fewer than 11 cases in two business days last week, following 12 others over the previous two weeks.
In other words, summer vacation is upon us, as the Court’s term is likely to end soon.
The most recent decisions are, as predicted, more controversial than the spate of unanimous or near-unanimous decisions of earlier weeks. None of the newest decisions, nor indeed any of the cases yet to be decided, are likely to provoke the level of public attention given to the Court’s decision in United States v. Skrmetti, upholding a state’s law prohibiting certain medical treatments for transgender minors.
However, the latest batch of decisions offers considerable guidance to litigators with respect to the level of review that federal courts may exercise under several very active statutory regimes and as to important procedural issues such as standing and venue.
Justice Barrett delivered the Court’s opinion in Food and Drug Administration v. R.J. Reynolds Vapor Co., upholding the right of retailers who would sell new tobacco products if not for the order of the Food and Drug Administration (FDA) denying approval to seek judicial review. Justice Jackson, joined by Justice Sotomayor, dissented. The issue in the case was whether retailers, as opposed to manufacturers, were “person[s] adversely affected” by an FDA ruling under the terms of the Family Smoking Prevention and Tobacco Control Act (TCA). One might fairly say, albeit with tongue slightly in cheek, that this is a “liberal” decision from a “conservative” Court. In any event, the Court applied traditional standing analysis in determining that the plaintiff retailers were within the “zone of interests” that the statute protects. “Adversely affected,” as well as variations such as “adversely affected or aggrieved,” are terms of art with a “long history in federal administrative law.” Many statutes, including the Administrative Procedure Act (APA), use the term, which entitles anyone “adversely affected or aggrieved by agency action within the meaning of a relevant statute . . . to judicial review.”
The Court interpreted “adversely affected” broadly as covering anyone even “arguably within the zone of interests to be protected or regulated by the statute . . . in question.” Thus, the Court rejected the argument of the FDA that the capacious understanding of “adversely affected” is unique to the APA but should not apply to the TCA, which, it argues, requires that a person “actually”—not “arguably”—fall within the statute’s zone of interests. Accordingly, the Court interpreted the TCA as echoing the APA and that retailers “fit the bill” of persons who may petition for judicial review. As the Court notes, “If the FDA denies an application, the retailers lose the opportunity to profit from the sale of the new tobacco product—or, if they sell the product anyway, risk imprisonment and other sanctions. . . . Accordingly, the retailers are ‘adversely affected’ by a denial order and are therefore proper petitioners. . . .”
The dissenters read the TCA, as did the FDA, as only empowering manufacturers to appeal. The majority countered that the term “any” suggests a congressional intent to cover a more expansive category of potential plaintiffs. The FDA argued for the first time in the Supreme Court that each petitioner in a joint petition for review must independently establish venue. However, the Court notes that the FDA did not make that argument in the U.S. Court of Appeals for the Fifth Circuit, and the Supreme Court refused to address an argument raised for the first time before itself. The dissenters decried the fact that the decision allows manufacturers and others to do an “end run” around the TCA’s venue restrictions to courts of corporate residence or the D.C. Circuit, as well as forum shop to the perceived most favorable Circuits, thus avoiding the effect of earlier adverse rulings.
Author’s note: As many readers of this blog over the last several terms of the Court might recall, the Court has been increasingly strict in the assessment of standing and venue. This is not to debate the issue of consistency but to suggest that the Court’s decision affording standing to parties whose alleged harm is derivative of the direct harm of a primary party, i.e., a retailer, as opposed to an applicant manufacturer, is likely to add fuel to regulatory challenges brought not only under the APA, but also under other statutes.
Esteras v. United States is another 7–2 decision, this one also written by Justice Barrett, with Justices Alito and Gorsuch dissenting. The case involved a convict, Edgardo Esteras, who had pleaded guilty to conspiring to distribute heroin and was sentenced to imprisonment for 12 months, followed by six years of supervised release. While in the latter status, Esteras was arrested and charged with domestic violence and other crimes. The U.S. District Court for the Northern District of Ohio then revoked Esteras’s supervised release and ordered him reimprisoned for 12 months, explaining that his revocation was intended to “promote respect for the law.”
However, the Supreme Court rejected this view and held that a decision to revoke release may not be based on an excluded section of the statute applied here, “which covers retribution vis-à-vis the defendant’s underlying criminal offense.” While the statute sets forth 10 factors that govern initial sentencing, it excludes two of them from the factors to be considered as to revocation. One of those two excluded factors is the one applied by the trial court, which “references ‘the need for the sentence imposed . . . to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense.’ . . . This provision speaks to the retributive purpose of punishment.”
The Court held that the structure of the statute, excluding from consideration in a revocation proceeding two of the 10 factors available at original sentencing, confirms the negative inference that the excluded factors cannot be considered in assessing revocation for the limited universe of supervised release. With an impermissible factor that was used to support the revocation decision as to Esteras and others having been rejected by the Court, the case was remanded for other proceedings, apparently allowing the consideration of permissible factors.
McLaughlin Chiropractic Associates, Inc. v. McKesson Corp. involved a statute, the Telephone Consumer Protection Act (TCPA), that this writer has litigated at both the trial and appellate levels, so the Court’s decision lands on fertile ground. This one was a 6–3 decision with a stereotypical division between jurisprudential conservatives and liberals. Writing for the Court over the dissents of Justices Kagan, Sotomayor, and Jackson, Justice Kavanaugh opined that the Hobbs Act (the statute governing appeals of agency action, discussed recently in this blog in another context) does not bind a district court in a civil enforcement proceeding to an agency’s interpretation of a statute. Much as was the case with Loper Bright, which overturned the Chevron doctrine, the Court held that “[d]istrict courts must independently determine the law’s meaning under ordinary principles of statutory interpretation while affording appropriate respect to the agency’s interpretation.”
The TCPA protects against intrusive telemarketing by banning unsolicited advertisements to fax machines without providing an opt-out, allowing recipients to avoid receiving future faxes. The statute provides for private rights of action and statutory damages per violation. The health care company, McKesson, through a subsidiary, sent unsolicited fax advertisements without the required opt-out notices to various medical practices, including the petitioner. The petitioner then sued, seeking certification of a class of fax recipients who received the advertisements in question either on personal fax machines or through online fax services. While the lawsuit was pending, the company petitioned the Federal Communications Commission (FCC) for a declaratory ruling on whether the TCPA applies to faxes received through online fax services.
Months after class certification, the FCC issued an order that interpreted “telephone facsimile machine” in the TCPA to exclude online fax services. The Northern District of California deemed the order binding and granted summary judgment to McKesson on claims involving online fax services, and the Ninth Circuit affirmed. It then decertified the class, leaving the petitioner to contest 12 faxes received through traditional machines. The Supreme Court accepted the case to decide whether the Hobbs Act bound the district court to the agency’s interpretation.
In reaching the conclusion that it did not, Justice Kavanaugh, who appears to have succeeded the retired Justice Breyer as the Court’s most authoritative voice on administrative law matters, opined that pre-enforcement review statutes such as the Hobbs Act that are silent about judicial review in both pre-enforcement and enforcement proceedings, but that don’t prohibit it, are subject to a default rule. Accordingly, the case was remanded for independent consideration by the district court.
The disagreement between the Court’s majority and minority turned on the application of the default rule to enforcement proceedings. That rule mandates that “district courts must independently determine whether an agency’s statutory interpretation is correct, rather than being bound by the agency’s interpretation.” The dissent argues that application of the rule to enforcement proceedings that might occur years after promulgation of the contested action to the benefit of a party that declined to seek judicial review at the outset reads into the Hobbs Act language inconsistent with the statute’s understood meaning that it prevents “later, collateral attack on agency orders that could have been challenged at the time they issued.” Notwithstanding that the majority did not adopt this thinking, an attorney would do well to consider advising early challenges, though pre-enforcement actions come with their own difficulties.
Diamond Alternative Energy, LLC v. Environmental Protection Agencywas yet another Clean Air Act (CAA) case (the Court having decided two others the same week) and another in which the Court considered the issue of standing. Justice Kavanaugh again wrote for the Court, and this time, only Justices Sotomayor and Jackson dissented. Pursuant to the CAA, the Environmental Protection Agency (EPA) approved California regulations requiring automakers to manufacture more electric vehicles and fewer gasoline-powered ones, with the goal of decreasing toxic emissions. Producers of gasoline and other liquid fuels sued, arguing that the EPA’s approval of the California regulations violated the CAA.
The issues before the Court were whether those producers had standing and, if so, whether they could state a claim that was redressable. As Justice Kavanaugh stated, “This case presents the ‘familiar’ circumstance where government regulation of one business ‘may be likely’ to cause injuries to other linked businesses. Alliance for Hippocratic Medicine, 602 U. S., at 384. California’s regulations force automakers to manufacture more electric vehicles and fewer gasoline-powered vehicles, likely causing downstream economic injuries to fuel producers,” in that “fuel producers make money by selling fuel. Therefore, the decrease in purchases of gasoline and other liquid fuels resulting from the California regulations hurts their bottom line. Those monetary costs ‘are of course an injury’ United States v. Texas, 599 U. S. 670, 676 (2023). . . . As for redressability, invalidating the California regulations would likely redress at least some of the fuel producers’ monetary injuries.”
The majority and minority disagreed over whether the case should have been taken in the first place, given the dynamism of the market. As the dissent puts it, “The Court shelves its usual case-selection standards to revive a fuel-industry lawsuit that all agree will soon be moot (and is largely moot already). And it rests its decision on a theory of standing that the Court has refused to apply in cases brought by less powerful plaintiffs. This case gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.” The majority, however, found enough immediacy to compel the current review.
Stanley v. City of Sanford was a case that will particularly interest practitioners of employment law. The case concerned whether a retired employee who neither held nor sought a job was a “qualified individual” under Title I of the Americans with Disabilities Act (ADA). The statute defines such a person who is protected against discrimination on the basis of disability to be “an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.”
Karyn Stanley was a firefighter for the city. When she was first hired, the city offered health insurance until age 65 to those who retired with 25 years of service and those who retired earlier because of a disability. The city later changed that policy as to individuals who retired before age 65 because of disability, now limiting them to 24 months of insurance unless the retiree started receiving Medicare benefits sooner. Stanley retired with a disability before she had 25 years of service and before she was 65. Thus, she was subject to the 24-month limitation on insurance.
She brought suit under the ADA, claiming that she was being discriminated against because her employer provided different benefits to those who retire with 25 years of service and those who retire because of disability. However, the district court dismissed her ADA claim, reasoning that the alleged discrimination occurred after she retired, when she was not a “qualified individual” under Title I of the ADA, and no longer held or sought a job with the defendant. The Eleventh Circuit affirmed, and, resolving a split among the circuits, so did the Supreme Court, with enough Justices attaching themselves to various parts of a decision written by Justice Gorsuch to form a majority that affirmed the holding of the Eleventh Circuit.
Perhaps of special interest to employment law specialists, the majority made the natural comparison between Title I of the ADA and the more widely known Title VII of the Civil Rights Act of 1964. It found that this comparison reinforced its reading of the ADA to the detriment of Stanley’s position. Title VII protects “employee[s] . . . without temporal qualification, sometimes covering former employees.” But where Title VII links “employee” to present-tense verbs referring to current employees, the story is different. Here, “the ADA’s ‘qualified individual’ yoked to present-tense verbs suggests current job holders or seekers. Court precedent supports this interpretation.”
In seeking what some might argue to be judicial legislation, Stanley invoked the ADA’s purpose of eradicating disability-based discrimination and argued that this purpose would be served by a judicial extension of Title I’s coverage to retirees. Several Justices seemed at least sympathetic to this policy argument. But Justice Gorsuch brought this argument up short while nevertheless noting that other laws besides the ADA may protect retirees from discrimination and “[i]f Congress wishes to extend Title I to retirees, it can do so. “
Fuld v. Palestine Liberation Organization dealt with several lawsuits filed under the Antiterrorism Act of 1990 (ATA). The ATA creates a federal civil damages action for U.S. nationals injured or killed “by reason of an act of international terrorism.” The respondents are the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA), organizations responsible for the functions of government for parts of the West Bank and Gaza Strip.
The question presented to the Court was “whether the exercise of personal jurisdiction over respondents under the Promoting Security and Justice for Victims of Terrorism Act (PSJVTA) violates the Due Process Clause of the Fifth Amendment.” All the Justices agreed that the answer to that question is “no.” The Chief Justice wrote for all of the other Justices, save for Justices Thomas and Gorsuch, who concurred with the result.
The PSJVTA cites the PA and PLO specifically and provides that they “shall be deemed to have consented to personal jurisdiction” in ATA cases under two circumstances. The first of these relates to respondents’ paying salaries to terrorists in Israeli prisons and to families of deceased terrorists—conduct Congress has condemned as “an incentive to commit acts of terror.” The second ties jurisdiction to respondents’ activities on U.S. soil. The petitioners alleged that the respondents engaged in conduct triggering both jurisdictional predicates. Reversing the Second Circuit, the Supreme Court held that “[t]he PSJVTA’s personal jurisdiction provision does not violate the Fifth Amendment’s Due Process Clause because the statute reasonably ties the assertion of jurisdiction over the PLO and PA to conduct involving the United States and implicating sensitive foreign policy matters within the prerogative of the political branches.”
The Court’s opinion is lengthy, but its fundamental principle is concise and quite recognizable to any law student learning civil procedure. “The Fourteenth Amendment personal jurisdiction framework derives from International Shoe Co. v. Washington, 326 U. S. 310, and requires that a defendant have sufficient ‘contacts with the forum State so that maintaining suit is ‘reasonable’ and ‘does not offend traditional notions of fair play and substantial justice.’” General jurisdiction lies in the forum of the defendant’s domicile or “home.” That would not apply to the PLO and PA. “Specific jurisdiction is different: It covers non-resident defendants less intimately connected with a State, but only as to a narrower class of claims . . . so long as there exist ‘minimum contacts’ between the defendant and the forum State.” The requisite contacts “for this kind of jurisdiction often go by the name ‘purposeful availment.’” That means taking some act by which a defendant “purposefully avails itself of the privilege of conducting activities within the forum State.” And actionable claims must be connected with those activities.
But while the terms of the due process clauses of the Fifth and Fourteenth Amendments are nearly identical, the Court’s opinion was based on the Fifth Amendment, with the Court declining to import the minimum contacts analysis of the Fourteenth into the Fifth. “Rather, the Due Process Clause of the Fifth Amendment necessarily permits a more flexible jurisdictional inquiry commensurate with the Federal Government’s broader sovereign authority.” Much of the Court’s discussion of the relationship between the two amendments would seem academic. Indeed, the demands of the Fifth Amendment could end up being on the same constitutional footing as the more expansive Fourteenth. But even if they do,
the PSVJTA easily comports with the factors we have previously applied to determine “the reasonableness of the exercise of jurisdiction” even under the Fourteenth Amendment. . . . Reasonableness, . . . will depend in each case “on an evaluation of several factors,” including “the burden on the defendant, the interests of the forum State, and the plaintiff ’s interest in obtaining relief.” . . . The PSJVTA ticks all three boxes.
The Court continued. “For largely the same reasons that we conclude there is a close connection between the PSJVTA’s predicate conduct and the United States, it follows that the forum sovereign has a substantial interest in adjudicating the dispute.” The United States has “an exceedingly compelling interest” in thwarting international terrorism and holding terrorists accountable for their actions against Americans. The defendants also have a history of being able to litigate ATA suits and do not claim that compelling them to do so in the United States “would force them to bear an unfair or unmanageable burden.” And “the PSJVTA reasonably ties the assertion of federal jurisdiction over the PLO and PA to conduct that involves the United States and implicates sensitive foreign policy matters within the prerogative of the political branches.” Accordingly, the Supreme Court held that the personal jurisdiction provision of the statute comports with the Due Process Clause of the Fifth Amendment. This decision disposes of the instant case and two others of a similar nature.
This week could be as busy as what we’ve just seen. Be ready for it.
Agencies’ Listening Sessions to Focus on Lowering Drug Prices Through Competition
The Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ), along with the U.S. Department of Commerce and the U.S. Department of Health and Human Services (collectively, “the agencies”) have planned to host three listening sessions to discuss ways to lower pharmaceutical prices via increased competition.
According to a statement by the agencies, the listening sessions will feature practitioners and scholars who will provide comments addressing anticompetitive conduct and regulatory barriers that lead to higher drug prices. It is not clear whether industry participants will also be able to make remarks.
The listening sessions are part of efforts to implement President Trump’s Executive Order No. 14273, “Lowering Drug Prices by Once Again Putting Americans First.” Notably, this executive order requires the Secretary of Health and Human Services to issue recommendations designed to accelerate competition for high-cost prescription drugs.
The specific topics to be addressed during the listening sessions include anticompetitive conduct that impedes generic or biosimilar competition; formulary, benefit, and regulatory practices that impact drug competition; and how to turn insights into action. The dates and times of the listening sessions are as follows:
Monday, June 30, at 2 p.m. ET
Thursday, July 24, at 2 p.m. ET
Monday, August 4, at 2 p.m. ET
The three sessions will be streamed live on the DOJ and FTC websites, with videos and transcripts being posted after the events.
Direct-to-Consumer Drug Ads Are Under Attack – Pharmaceutical Companies Beware
On June 12, 2025, Senators Bernie Sanders (I-VT) and Angus King (I-MN) introduced the End Prescription Drug Ads Now Act (the Act) that would prohibit pharmaceutical companies and arguably any other entity engaged in advertising drugs, including telemedicine companies, from conducting direct-to-consumer (DTC) advertising of prescription drug products.
If signed into law, the Act would amend the Federal Food, Drug, and Cosmetic Act (FD&C Act) at 21 U.S.C. § 352 (titled “Misbranded drugs and devices”) by adding the following language to the end of the section that begins with “A drug or device shall be deemed to be misbranded—:
(hh)(1) If it is a drug approved under section 505 or licensed under section 351 of the Public Health Service Act, and subject to section 503(b)(1), and the holder of the approved application under section 505 or of the license under such section 351 has conducted direct-to-consumer advertising of the drug within the most recent 30-day period.
(2) For purposes of this paragraph, the term ‘direct-to-consumer advertising’, with respect to a drug subject to section 503(b)(1), means any promotional communication targeting consumers, including through television, radio, print media, digital platforms, and social media, for purposes of marketing such a drug.”
There are three notable definitions in the Act worthy of discussion:
1. What is a “drug approved under section 505 or licensed under section 351 of the Public Health Service Act, and subject to section 503(b)(1)?”
New prescription drugs are typically approved under section 505 of the FD&C Act (21 U.S.C. § 355), which allows for the approval of a new drug application following demonstration of a drug’s safety and effectiveness, whereas biological products such as vaccines, blood, and protein products are licensed under section 351 of the Public Health Service Act (PHSA) (42 U.S.C. § 262). Drugs subject to section 503(b)(1) of the FD&C Act (21 U.S.C. § 353b) are those limited to being dispensed by prescription (and thus would not cover over-the-counter drugs approved under section 505). Taken together, the proposed language means that both approved prescription drugs and biologics would be in scope for the new legislation. The provisions of the proposed Act would not apply to over-the-counter, compounded, or unapproved prescription drugs, medical devices, dietary supplements, or cosmetics.
2. Who is “the holder of the approved application under section 505 or of the license under such section 351?”
This term means that the proposed legislation will explicitly apply only to new drug applicants and the biological license applicants, which are typically the manufacturers of these products. However, pharmaceutical manufacturers are not the only entities engaged in advertising of prescription drug products and biologics. Arguably, other entities such as wholesalers, pharmacies, and telemedicine companies that do not have contractual relationship with a drug or biologic manufacturer could advertise a prescription drug product or a biologic even if the Act is enacted. It remains open as to whether this ambiguous loophole will be addressed if the bill moves forward.
3. What is a “promotional communication targeting consumers” … “for purposes of marketing such a drug?”
Traditionally, prescription drug promotion includes the name of a drug product and at least one claim about the intended effects of the drug product and refers to promotion targeting consumers and health care professionals. DTC promotion specifically targets lay individuals who may be prescribed (or seek to be prescribed) a specific drug product. Currently, there are several different types of drug promotion. A reminder promotion is designed to increase product name recognition; it does not mention the drug’s uses or make any medical claims. Help-seeking promotion talks about a disease or medical condition, not a particular drug, and encourages consumers to see their doctor if they think they have the condition. A full product promotion describes a specific drug, including information about its uses, benefits, and risks. Under the proposed Act, drug product promotional communications of any kind by pharmaceutical manufacturers would arguably no longer be permitted.
What is the Impetus Behind the End Prescription Drug Ads Now Act?
The Act comes on the heels of an attempt earlier this year by Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) to close perceived “legal loopholes” in the U.S. Food and Drug Administration’s (FDA) ability to enforce its regulations against false and misleading prescription drug promotions by social media influencers and telehealth companies, introduced by the Protecting Patients from Deceptive Drug Ads Act. Our blog “Telehealth Companies and Social Media Influencers May Face New FDA Laws” discusses that legislation.
In addition to the End Prescription Drug Ads Now Act, it has been reported that the White House is discussing policies to restrict DTC drug advertising. Secretary of Health & Human Services, Robert F. Kennedy, Jr., has raised concerns about the state of DTC drug advertising and has discussed goals to require more clear disclosures of adverse side effects within drug advertisements to better inform patients and prescribers of the risks. Secretary Kennedy has also discussed a proposal to remove the ability to deduct DTC drug advertising as a business expense for tax purposes. In each case, the proposed policies would result in prescription drug advertising being more expensive for manufacturers.
Pharmaceutical DTC advertising continues to be a sizeable way of promoting drugs to reach new consumers, with some analysis noting a return on investment for DTC drug ads “ranging as high as 100%-500%, depending on the drug.” In addition, judicial precedent has historically favored drug manufacturers with courts ruling that such advertising is protected under the First Amendment’s Constitutional guarantee of the right to free speech.
What to Expect Next?
It is unclear whether the Act will pass or to what extent the White House’s efforts to restrict drug advertising will be pursued. What is clear, however, is the growing bipartisan interest in banning or significantly curtailing DTC advertising of prescription drug products across all media platforms. Such a change would trigger a significant departure from current pharmaceutical practices and would bring the United States in line with the rest of the World; New Zealand is the only other country that currently allows DTC drug advertising.
Want to Learn More?
Scientific Information on Unapproved Uses of Medical Products: FDA’s Final Guidance on Firm Communication to Health Care Providers
FDA’s Final Rule on Direct-to-Consumer Advertising – Presentation of Risk Information
DTC Promotional Labeling and Advertisements: Quantitative Efficacy Wins Over FDA in Final Guidance on Presenting Risk Information
Guide to Ozempic/Wegovy Vision Loss Lawsuits and Settlements
What types of eye injuries does Ozempic/Wegovy cause?
Ozempic/Wegovy are two of the most common weight-loss medications known as GLP-1 drugs. Other GLP-1 drugs include Mounjaro, Rybelsus, Saxenda, Victoza, Trulicity, and Zepbound. All of these products are made by one of two main drugmakers, Novo Nordisk and Eli Lilly.
It has been known for a while now that scientific studies indicate that Ozempic/Wegovy and other GLP-1 drugs can cause serious gastrointestinal injuries.
Recently, scientific studies show that Ozempic/Wegovy and other GLP-1 drugs can also cause vision loss through an eye injury called non-arteritic anterior ischemic optic neuropathy (“NAION”).
Even more recently, Ozempic/Wegovy and other GLP-1 drugs have been medically linked to vision loss through an increased risk of developing neovascular age-related macular degeneration (“nAMD”), particularly in patients with diabetes.
How do eye injuries fit into the current Ozempic/Wegovy litigation?
Federal claims against Novo Nordisk Eli and Lilly have been consolidated in a Multi-District Litigation (“MDL”), in the Eastern District of Pennsylvania, under Judge Gene E.K. Pratter. The MDL includes certain gastrointestinal injury claims. The MDL does not include eye injury or vision loss claims.
Eye injury and vision loss claims have not yet been consolidated and are being filed separately in federal and state courts across the country.
How do I know if I have an Ozempic/Wegovy vision loss claim?
The science is still advancing, but a recent scientific study showed that with even limited treatment using GLP-1 drugs, there was a clear association with NAION in diabetic and overweight patients.
In addition, the most recent study showed that: in patients with diabetes, who took GLP-1 drugs for at least six months, the risk of developing nAMD basically doubled.
Based upon what we know now, to have a viable claim you should be able to show through your medical and pharmacy records that you took a GLP-1 drug made by Novo Nordisk or Eli Lilly. If you took an off-brand GLP-1 drug made by a compounding pharmacy, you likely will not have a viable claim.
You must also be able to show that you took the GLP-1 drug for an extended period of time. While studies differ, the more viable claims will entail several months of treatment, with injuries occurring while treating or shortly after stopping treatment.
Finally, you must have been formally diagnosed with NAION, nAMD, a similar eye injury, or general vision loss.
How do I find an Ozempic/Wegovy vision loss attorney?
You have been diagnosed with eye injury or vision loss close to using Ozempic/Wegovy or other GLP-1 drugs for an extended period of time. You now need to talk to legal counsel with experience in national pharmaceutical litigations and Ozempic/Wegovy vision loss claims in particular.
Do your homework and research the firm you will be working with — there is a really good chance it will not be the same lawyer who handled your last speeding ticket, or the people answering the phone at the other end of one of the 800 numbers that flash across your television screen late at night.
USDA TO THE RESCUE! First, Immigration Policies — Will MAHA be Next?
The U.S. Department of Agriculture (USDA) has been around for more than 150 years, stressing the importance of American agriculture to a bountiful food production system since Abraham Lincoln first signed it into being in 1862. Lincoln himself, in fact, in his 1864 final annual message to Congress, christened USDA “the people’s Department,” just before commending it “to the continued attention and fostering care of Congress.” From industrialization to the mechanization of farming, through the post-industrial era and into the digital age, farmers are among the first to remind the rest of us of that universal truth: “we still gotta eat.”
Ensuring that capability has been among the most important missions of USDA, and recently that role has been tested by the new Administration’s emphasis on “controlling our borders” as a centerpiece issue for President Trump. In recent weeks, there have been mass deportation efforts specifically targeting geographic locations and industries identified as likely to house and employ significant numbers of undocumented immigrants. Among affected industries is farming, where up to 40 percent of those who work in food production occupations — as farmworkers or at food handling and processing facilities — are estimated to be undocumented.
Consequently, as the Administration’s deportation efforts ramped up in recent weeks, farm labor was reported to be impacted, either directly, with laborers being detained or arrested, or via rumors of enforcement sweeps keeping workers away from their jobs out of fear of the same. Then, to the surprise of many, in the last week, President Trump suggested that some undocumented workers have been here in the United States for years, working hard without incident, paying taxes, and breaking no laws — and should thus be allowed to stay, or at least not targeted for deportation as an enforcement priority.
The President specifically cited how the agricultural industry (along with the hospitality industry) was dependent on such labor and would otherwise suffer, with the resulting effects impacting the nation’s food supply. It was reported that U.S. Secretary of Agriculture Brooke Rollins was pivotal in conveying the concern of farmers and agricultural groups and emphasizing the need to have immigration enforcement policies that acknowledge and consider how important the undocumented workforce is to U.S. food production. And yet the suspension of worksite enforcement operations targeting farms, hotels, and restaurants was short-lived, with the Trump Administration apparently reinstating it again mere days later.
Meanwhile, the Administration’s “MAHA Report,” released on May 22, 2025, with Secretary Rollins as one of the Make America Healthy Again (MAHA) Commission members, essentially condemns the U.S. food supply as horrible and dangerous. The word “food” appears 260 times in the 68-page report, with repeated emphasis on the modern food production system resulting in ultra-processed food as it goes from farm to table with a stop in between for corporate players to foist dangerous methods of production, products, and the manipulation of consumer tastes upon it and us.
The MAHA Report frames the United States as a whole as “unhealthy,” with little, or at least too little, regulation by government agencies that have been “captured” and otherwise manipulated by corporate interests intent on defending and continuing a woeful status quo. The food industry generally, with farmers using conventional production methods (various crop inputs such as fertilizers and pesticides, sizable farming operations), is often referred to by critics as “Big Ag” — a reference to what many consider to be the scale and methods of production which characterize modern farming and food production. The MAHA Report, while citing the wonderfulness of farmers in their ability to be so productive, effectively holds the modern food production system, including farmers (or at least current farming methods), responsible for making America unhealthy.
On May 23, 2025, just one day after the MAHA Commission’s sweeping condemnation of modern food production practices, came Executive Order (EO) 14303: “Restoring Gold Standard Science.” Issued by President Trump, the EO declares that all federal agencies (USDA included) must base decisions on “the highest standards of scientific integrity.” That sounds good on paper, but it raised eyebrows in the Ag world. While the EO calls for transparency, peer-reviewed data, and decisions insulated from ideology, farm groups may be left wondering which science the Administration wants to elevate — because the science behind large-scale food production didn’t get much airtime in the MAHA Report.
Farm groups, anticipating what was to come in the MAHA Report, released a “Statement from Farmers of Major U.S. Agriculture Groups on Pending MAHA Report” two days before the Report itself was released:
The Make America Healthy Again Commission is expected to soon release a report that will have significant bearing on America’s farmers, producers and ranchers, and the public’s trust in our food system. In anticipation, the American Soybean Association, National Corn Growers Association, National Association of Wheat Growers, International Fresh Produce Association, and in turn, the farmers these groups represent, are imploring the administration to consider the consequences of this MAHA Commission report before it is finalized.
The statement goes on to add:
Despite the effort of many of our organizations to work with the MAHA Commission to provide factual information about American food production, we have heard disturbing accounts that the commission report may suggest U.S. farmers are harming Americans through their production practices and ‘creating foods that is [sic] destroying our microbiome and bodies—leading directly to our chronic disease crisis.’ Nothing could be further from the truth. Nutrition matters, health matters, and the confidence of consumers in the food supply matters tremendously.
Where is, or was, USDA?
This statement is but one of many alarms sounded by farm groups concerned about possible fallout from the work of the MAHA Commission. And the biggest fallout of all for those with a hand in American farming could be a new effort, endorsed by the Trump Administration, echoing the concerns of critics of Big Ag over the years. With criticism aimed at large acreage farms, large animal feedlots, a reliance on synthetic inputs, and the use of current food processing techniques and the argument being that the result of these things is dangerous (or at least unhealthy) food products being widely distributed in our homes, schools, and on grocery store shelves, there is more than enough fallout to go around.
With over 250 food and agricultural groups signing onto a June 17, 2025, letter to Secretary Rollins, U.S. Secretary of Health and Human Services Robert F. Kennedy Jr., and U.S. Environmental Protection Agency Administrator Lee Zeldin, urging that food and agriculture “have a seat at the table during the development of policy recommendations” related to the MAHA Report, it is now even clearer what farmers, and many agricultural stakeholders, think — that the MAHA Report is not scientifically supported (gold-standard or otherwise) and that it is in need of some serious revision. Putting aside the question of what role USDA played, or didn’t play, in the MAHA Report, will Secretary Rollins and staff be able to persuade the President that another initiative may need modification before its impact on farming could affect his standing in a rural America which up to now has been an anchor of support for his Administration?
With 42 out of 50 states — red and blue alike — directly represented in the letters’ signatories, as well as groups representing commodities as varied as pork and mint, hazelnuts and Christmas trees, and special interest groups as diverse as American Agri-Women and the National Black Growers Association, it seems that it is once again the farmers reminding us: we all still gotta eat.
Snack Wars: Mondelez Challenges Aldi’s Packaging Design Strategy in Trademark Infringement Lawsuit
The Aldi supermarket chain has built a loyal and growing following—Aldi is on pace to open more than 225 new stores this year and promotes itself as a lower-cost alternative to traditional brands. Aldi’s slogan is “like brands, only cheaper.” Under this business model, and similar to many other large retailers, Aldi promotes its private-label branded products. But food giant Mondelez International Brands is now alleging that Aldi has taken their slogan too far when it comes to product packaging of some of Mondelez’s brands.
Mondelez is challenging Aldi’s packaging design strategy, filing a lawsuit in the U.S. District Court for the Northern District of Illinois alleging Aldi’s store brand packaging designs are too “like brands” Oreo, Wheat Thins, Nutter Butter, Chips Ahoy, Ritz, Premium, and Nilla Wafters, all owned by Mondelez. The suit was filed May 27, 2025, and accuses Aldi of willful trade dress infringement and unfair competition.
The goal of trademark and trade dress protection is twofold: (1) to protect consumers from being misled or confused about the origin of the product so consumers can reasonably identify and select products based on the brand expecting a certain quality and reputation; and (2) to safeguard the goodwill and reputation a business has built around a brand, ensuring that others do not unfairly profit from or dilute that investment. For instance, if a customer picks up a package of Oreo cookies, based on the goodwill that Mondelez has built up the Oreo brand, that customer reasonably knows what to expect in terms of quality.
At the heart of this case is what Mondelez claims to be the systemic copying by Aldi of the visual design of at least seven of its most recognizable brands. These identical types of products (i.e., cookies and crackers) are alleged to have packaging designs with similar colors, fonts, layouts, and imagery as the Mondelez brands.
For example, Aldi’s Original Sandwich Cookies with Vanilla Filling are packaged in a blue and white bag, with the cookies in the center and a red logo in the upper left corner. The layout, design, and color scheme resemble the Oreo packaging design. But the question for the court is, “Does this similarity constitute trade dress infringement?”
Mondelez argues that it does, calling Aldi’s packaging in question “blatant copies” that are “likely to deceive and confuse” customers. Mondelez is seeking monetary damages and injunctive relief.
Last year, Aldi lost a similar lawsuit in Australia. An Australian court ruled that its packaging infringed the copyrights of Hampden Holdings’ Baby Bellies, a children’s snack brand.
While it is common for private-label brands to share some general features with their national brand equivalent products, signaling to consumers that this is a lower-cost alternative, this case could have broad implications on how closely the private-label brands can resemble national brands without violating trademark and trade dress infringement.
Will more major brands be increasingly willing to litigate to protect the look and feel of their products, and not just their names as retailers like Aldi grow their private-label offering and increasingly complete directly with national brands? This case underscores what appears to be a growing tension between national brand owners and retailers over how far private labels can go in mimicking established protects.
Companies should ensure their products designs are distinctive and legally defensible, balancing cost-effective branding and clever marketing with legal compliance to avoid infringement claims. Like for trademarks, clearance research and analysis should be done for trade dress, including packaging designs, prior to use.
The case is Mondelez International, Inc. et al. v. Aldi Inc.
FDA Commissioner Outlines Priorities in JAMA Article
On June 10, 2025, FDA Commissioner Marty Makary and FDA CBER Director published an article in JAMA that listed their “priorities for a new FDA.” These priorities included accelerating drug development, using AI for scientific review, “healthier food for children,” “harnessing big data,” and reducing patient costs.
The JAMA article pointed to FDA’s “phase-out” of synthetic food dyes as an example of the agency already taking action to address an “increasingly chemically manipulated diet” in the US. As a practical matter, FDA has of yet not taken any regulatory action with respect to synthetic colors (outside of Red No. 3). The article also called attention to a hastily assembled FDA Expert Panel on Talc that occurred on May 20, and stated that FDA had started working to define ultra-processed foods (UPFs).
The FDA’s prioritization of AI reviews follows the recent launch of its new generative AI tool “Elsa,” which is part of Commissioner Makary’s initiative to use AI throughout the agency by June 30. According to the JAMA article, FDA has already completed its first AI-assisted scientific review. However, the New York Times reported that the new AI tool was far from perfect, as it is limited in the number of characters it can review and sometimes hallucinates and produces false information.
Separately, Regulatory Focus, an online news publication, reported that Commissioner Makary sent an agency-wide letter to FDA staff on June 11 announcing his plans to “centralize and enhance key operational functions.” This would include consolidating various departments such as human resources, acquisitions, and communications.
USDA Approves SNAP Waivers in Additional States
U.S. Secretary of Agriculture Brooke Rollins is continuing to approve waivers that allow states to prohibit certain food items from qualifying under the Supplemental Nutrition Assistance Program (SNAP). In May 2025, we reported that Nebraska received the first-ever waiver that allows the state to restrict the purchase of certain “junk” foods and beverages, such as candy and soda. Five additional states have now received SNAP waiver approvals, including Arkansas, Idaho, Indiana, Iowa, and Utah.
Idaho and Indiana restrict the purchase of both soft drinks and candy, while Utah only restricts the purchase of soft drinks. Arkansas—in addition to restricting soft drinks and candy—also restricts the purchase of fruit and vegetable drinks with less than 50% natural juice and “unhealthy drinks.” With the exception of Arkansas whose implementation date is July 1, 2026, SNAP restrictions in other states begin on January 1, 2026.
The language of Iowa’s SNAP waiver is unique in that it “restricts all taxable food items as defined by the Iowa Department of Revenue except food producing plants and seeds for food producing plants.” Some of the taxable food items that will face restrictions include candy, chewing gum, carbonated and non-carbonated soft drinks, sweetened naturally or artificially sweetened water, and dried fruit leathers.
Several other states, including Colorado, Louisiana, Montana, Texas, and West Virginia, have submitted SNAP waivers to prohibit the purchase of certain food and beverage items and are pending approval. Arizona and Kansas had also introduced legislation to restrict SNAP funding for certain products, but both bills have been vetoed.
Keller and Heckman will continue to monitor developments related to SNAP.
House Appropriations Committee Releases FY26 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill
On June 10, the House Appropriations Committee released the full committee markup of Fiscal Year 2026 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill. A summary of the bill can be found here.
The bill puts forth the proposed 2026 budget for several federal agencies including the U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA). Currently, the bill provides roughly $6.7 billion for FDA and $22 billion for USDA.
The act highlights restrictions on how the allocated money can be spent and what the money can be spent on. For example, FDA is prohibited from promoting any new guidelines or regulations applicable to food manufacturers for Listeria monocytogenes until FDA considers the available new science in updating Compliance Policy Guide (CGP), Sec. 555.320. FDA is also prohibited from developing new long-term guidelines on sodium reduction until it considers the impact of its short-term sodium reduction targets.
The bill also clarifies that until the compliance date of the new healthy rule (February 25, 2028), industry may rely on either the previous or the new requirements, and that states are preempted from enacting any different requirements.
Among the provisions related to animal feed, the bill provides that all ingredients listed in the AAFCO Official Publication Chapter 6 are GRAS unless FDA has made a contrary determination. Separately, FDA would be directed to develop standards for “natural” claims for animal food.
The bill also places protections on the hemp industry by forbidding the use of any funds allocated by this act to prohibit the “transportation, processing, sale, or use of hemp … within or outside the State in which the hemp is grown or cultivated.” It would also narrow the definition of “hemp” to cover only products with a total tetrahydrocannabinol (THC) concentration of not more than 0.3% on a dry weight basis (as opposed to the current definition’s focus only on the delta-9 THC content).
This bill is, of course, subject to change as the appropriations process moves ahead. Keller and Heckman will continue to monitor activities involving FDA’s funding for FY26.