Topic: Recent consumer products case law

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Breach of contracts and a social media gaming celebrity

As more and more consumer markets brands turn to influencers and social media stars to promote their products, novel legal issues are bound to arise! Sue Ross and Eva Yang provide their analysis on a case recently litigated in the Southern District of New York that includes claims under California’s Talent Agency Act and the California Business and Professions code. Check out their post, “Social media gaming celebrity and breach of contracts,” on the Social Media Law Bulletin.Continue Reading

Federal court says Prop 65 warnings for glyphosate violate the First Amendment

On June 22, 2020, Judge William Shubb of the US District Court for the Eastern District of California entered an order prohibiting the State of California from requiring Prop 65 warnings for glyphosate, the active ingredient in the herbicide Roundup®. The decision was not based on whether glyphosate had been improperly listed under Prop 65, or whether the amount of exposure to average users was below the no significant risk level. Rather, the court concluded that the warnings were prohibited under the US Constitution’s First Amendment as compelled government speech. This decision is important, as it is the first final … Continue Reading

Class actions against CBD companies proliferate under federal and state law

On the heels of FDA sending out a tranche of warning letters to sellers of cannabidiol (CBD) products, enterprising plaintiffs lawyers have filed a spate of consumer class actions over these types of products. The complaints put forth a number of different theories tied to the current illegality of these products due to FDA regulation. These include allegations that companies:

  • misled consumers by marketing their products as dietary supplements,
  • inaccurately listed CBD dosages or product content; and
  • made unsubstantiated claims about CBD’s ability to treat, prevent, or cure human disease.

Is it worth the risk?

Hemp-derived CBD was legalized in … Continue Reading

Braille on gift cards: ADA accessibility issue or novel shakedown?

As retailers and restaurants are well aware, the proliferation of website accessibility claims filed by serial plaintiffs’ counsel is not slowing down. But now a new wave of lawsuits—Braille on gift cards—is flooding the New York federal courts.

Recent cases

Starting in October 2019, a handful of plaintiff’s counsel have filed more than 200 putative class action lawsuits on behalf of visually impaired plaintiffs in the Southern and Eastern Districts of New York against retailers and restaurants based upon their failure to sell gift cards with Braille. These lawsuits allege that blind or visually-impaired consumers are deterred from visiting retailers … Continue Reading

Drone registry rule grounded by court

Updating our previous post about the Federal Aviation Administration’s rules and regulations regarding the use of drones, an appeals court has struck down one of the more hotly disputed aspects of the program – the FAA’s registration requirement for recreational drone owners.

As part of the FAA’s drone program, FAA regulations require recreational drone users to register their drones. Registration requires users to provide their names, email and physical addresses, pay a $5 registration fee, and display a unique ID number on their drones. Nearly 300,000 drone owners registered within a month of the program’s unveiling.

The registration rule was … Continue Reading

Your product labels could be deceptive based on what’s on a competitor’s labels

In what seems to be an ever-expanding zone of liability for false advertising claims on food products, the Ninth Circuit ruled this week that “external facts” – aka what a competitor does or does not put on their labels – can make the labels of another product misleading by implication.

In Bruton v. Gerber, plaintiff Natalia Bruton alleged that labels on Gerber baby food products advertising nutrient and sugar content were impermissible under FDA regulations (thereby creating a UCL unlawful advertising claim). Bruton’s theory of deception was a combination of two factors: 1) presence of “attractive label” claims such … Continue Reading

ALERT: Merchants face new wave of class actions alleging excessive shipping charges

Recently filed complaints seemingly forecast a new type of class action in California courts: consumer protection claims based on allegations that merchants are overcharging consumers for shipping and delivery charges. Such claims have the potential to affect all companies selling consumer goods online or by mail order.

Even though there is no specific statute forbidding merchants from charging delivery fees that exceed the actual costs of shipping, the new complaints assert that the practice violates California Unfair Competition Law and Consumer Legal Remedy Act, based on ethical guidelines promulgated by the Direct Marketing Association, which state that “shipping or Continue Reading

Discount class action theories broaden in California

The plaintiffs’ bar has a new angle on retailer discounting cases, which attack California retailers who discount merchandise by showing an “original” or “former” price next to a much lower, discounted price to imply tremendous savings.

Initially, plaintiffs relied on California’s False Advertising Law, Unfair Competition Law, and the Consumer Legal Remedies Act to allege that consumers are deceived into purchasing items based on allegedly “false” discounts. The FAL specifically prohibits discount “advertising” of this sort unless the former price was “the prevailing market price… within three months” prior.

Using these cases as a springboard, plaintiffs have recently developed a … Continue Reading

California Court of Appeal refuses to honor jury trial waiver

In today’s business world, companies frequently enter into contractual provisions with their customers to limit jury trial exposure as part of managing future risks. However, if you think that agreeing that any dispute can be resolved without a jury trial is enough to insulate you and your business from this threat – THINK AGAIN.

Just last month, the California Court of Appeal overturned a contractual provision waiving the parties’ right to a jury trial, despite the fact that such waiver was fully enforceable under New York, the law agreed to in the contract’s choice of law section.

In Rincon EV Continue Reading

Update: FTC gets $13.4 million judgment against BlueHippo

 

Updating a prior post, on May 2, 2016, the Federal Trade Commission (FTC) announced its receipt of a $13.4 million judgment against the CEO of BlueHippo, after the Second Circuit overturned the district court’s determination that BlueHippo’s damages were limited to $600,000 in 2014.

BlueHippo marketed computers and electronics to consumers regardless of their credit history, using an installment payment method. If a consumer missed an installment payment, BlueHippo represented that consumers could convert installments already paid to credits, with which they could buy other products from BlueHippo’s online store. The catch is that allegedly, consumers’ use of … Continue Reading

DC Consumer Protection Procedures Act claims worth less than previously thought

Washington, DC’s Consumer Protection Procedures Act allows plaintiffs to recover “treble damages, or $1,500 per violation, whichever is greater” for a broad range of trade related violations, including false advertising, breach of warranty, and false representations regarding repairs. Because CPPA cases involve consumer goods and services that are typically inexpensive, $1,500 is almost always the greater amount, meaning that costly penalties can be racked up for fairly cheap items.

But what does “per violation” mean? The statute does not define the term, producing uncertainty as to how much many CPPA cases are actually worth.

For example, if a person … Continue Reading

Chobani motion to dismiss unceremoniously vacated

Last month, the Ninth Circuit, in an opinion scant on explanation, vacated the order of Judge Koh in the Northern District of California dismissing false advertising class action claims Chobani, LLC, the maker of Chobani Greek Yogurt.

The class action alleged that Chobani falsely advertised its yogurt in two ways: 1) by referring to the sweetener in the yogurt as “evaporated cane juice,” when it is really just “sugar” or “dried cane syrup” and 2) representing that the yogurts contain “[o]nly natural ingredients,” when they actually include artificial colors.

In February 2014, Judge Koh issued an opinion dismissing the Continue Reading

UPDATE: Pom Wonderful victory proves Pyhrric

In 2014, Pom Wonderful made headlines when the Supreme Court, in an 8-0 opinion, ruled in its favor that the Food, Drug and Cosmetics Act does not preclude Lanham Act claims due to conflict between the two statutes.  This opinion allowed Pom Wonderful’s claims against Coca-Cola to survive and between March 11 and March 18, 2016, the merits of Pom’s claims that Coca-Cola deceived consumers with the labeling of its Pomegranate-Blueberry juice were tried to a jury.

Despite Pom’s significant win in the Supreme Court, after less than a day of deliberations, 9 jurors found that Coca-Cola did not … Continue Reading

New REACH guidance on substances in articles

ECHA has recently issued revised guidance on substances in articles under REACH. The guidance follows a September 2015 ruling from the European Court of Justice that invalidated ECHA’s prior interpretation – effectively turning this aspect of REACH compliance on its head.

The REACH Regulation

The REACH Regulation addresses the production and use of chemical substances in the European Union. REACH implements reporting requirements for producers, importers and suppliers of products entering the European Union.

REACH defines an article as:

“an object which during production is given a special shape, surface or design, which determines its function to a greater degree … Continue Reading

UPDATE: Seventh Circuit ascertainability holding petitioned to the Supreme Court

We previously reported on the Seventh Circuit’s decision in Mullins v. Direct Digital, LLC, in which the Court systematically refuted every policy argument made to support holdings like the Third Circuit’s opinion in Carrera, requiring a plaintiff to demonstrate that class members can be identified through a reliable and administratively feasible manner in order to meet the implied ascertainability requirement for class certification.

Since our last post, Direct Digital has petitioned the ruling to the Supreme Court, and the opposition to the request is due to be filed no later than December 28, 2015. Moreover, the Sixth Continue Reading

CA Supreme Court won’t respond to question from Ninth Circuit on privacy law for credit card customers

In addition to refusing to hear an appeal in Harrold v. Levi Strauss & Co., which we previously posted about, the California Supreme Court also declined to respond to a question the Ninth Circuit in Davis v. Devanlay Retail Group, Inc. certified to the Court, seeking clarification of California Song-Beverly Credit Card Act’s reach regarding retailers’ request for credit card customers’ personal identification information at the point of sale.  The Court denied the request for certification pointing to the authority established by Harrold.  Given the Court’s denial of the petition for review and denial of the Ninth Circuit’s … Continue Reading

UPDATE: Cal. Supreme Court refuses review of privacy issue for credit card customers

Yesterday the California Supreme Court refused to hear an appeal in Harrold v. Levi Strauss & Co., a case that clarified the scope of California’s Song-Beverly Credit Card Act, Civil Code section 1747.08, in the context of retailers’ requests for personal identification information from credit card customers standing at the point of sale in a store.  The Court also refused a request for the opinion to be depublished.  Therefore, the opinion from the Court of Appeal stands, establishing binding precedent for lower courts in the state.

For a detailed discussion of Harrold and its impact on retailers, see our … Continue Reading

Seventh Circuit intensifies ascertainability split

Last month, the Seventh Circuit further added to the tension between the circuits regarding the interpretation and application of Rule 23(f)’s shadow ascertainability requirement. As we previously reported, we await a ruling in the Ninth Circuit on this issue; it is almost certain that this recent opinion will now be added to the mix affecting that ruling.

The case, Mullins v. Direct Digital, LLC, is a consumer class action alleging that the product Instaflex Joint Support is falsely advertised to “relieve discomfort,” “improve flexibility,” “increase mobility,” “support cartilage repair,” as well as being “scientifically formulated” and “clinically tested … Continue Reading

UPDATE: Bill to amend California’s “Made in USA” law gets one step closer to becoming law

Following up on our recent post about two bills pending in the California legislature that would amend California’s “Made in USA” law—yesterday the Assembly passed SB 633.  Next, SB 633 will be sent back to the Senate for a concurrence vote, and assuming the Senate approves, the bill would then go on to the Governor’s desk for signature.  The Legislature goes on summer recess today, so we won’t find out the fate of SB 633 for at least another month.  So far that bill has not received any “no” votes, either in committee or on the floor of … Continue Reading

Supreme Court will determine whether class action plaintiffs can be bought off

The Supreme Court has granted cert to decide whether or not class action defendants can make the claims of named plaintiffs invalid by offering early settlements.

This practice, known as “mooting” an action or the “pick-off” strategy, occurs when, prior to class certification, a defendant offers a class representative a full settlement, completely covering any of the named plaintiff’s damages. Even if the named plaintiff does not accept the offer, defendants may then argue that the claims are moot because full relief was offered (and, therefore, no need for a lawsuit) and seek dismissal.

The Supreme Court is poised to … Continue Reading

California Court of Appeal finally issues guidance to retailers on privacy issue for credit card customers

California’s Song-Beverly Credit Card Act, Civil Code section 1747.08, prohibits retailers from requesting or requiring “personal identification information” (PII) in connection with consumer credit card transactions and then recording that information.  Following a February 2011 California Supreme Court opinion in Pineda v. Williams-Sonoma Stores, Inc., plaintiffs filed hundreds of putative class action complaints against retailers throughout California alleging violations of the Act.  But, the extent of the Act’s prohibition in the context of requests for PII at the point of sale in brick and mortar stores has been unclear.

Confusion

The question is whether the Act prohibits … Continue Reading

Bourbon need not be “made by hand” to be advertised as “handmade”

Proving that a false advertising claim can be thrown out on a motion to dismiss (despite recent cases in California indicating the contrary), a Florida federal judge tossed false advertising claims brought against Maker’s Mark Distillery, Inc., determining that consumers could not possibly interpret the phrase “handmade” – used to market the company’s bourbon whiskey – to mean the product was made “predominantly by hand.”

Plaintiffs filed their complaint in December 2014, alleging there was nothing “handmade” about the bourbon whisky “under any definition of the term.” Plaintiffs argued the advertising was deceptive because the bourbon was made “via a … Continue Reading

Plaintiffs’ attorneys told to “get real” with fee award request

Although false advertising class action law in California is generally (and accurately) perceived as bending over backwards to advantage plaintiffs, recent fee award decisions may make plaintiffs’ lawyers more wary about bringing lawsuits that are not slam dunk victories.

This week, Judge George H. Wu out of the Central District of California slammed plaintiff attorneys by awarding them a modest $11,368.25 in fees, out of a requested $1.9 million fee award.

In Red v. Kraft Foods, Inc., plaintiff attorneys filed a class action claiming that Kraft engaged in false advertising under the CLRA, UCL and FAL by falsely … Continue Reading

California’s Made In USA standard survives another test in court

Another court in the Southern District of California has agreed that California’s Made in USA law is more stringent than the federal standard, holding that the law is not preempted by the Federal Trade Commission Act or the Textile Fiber Products Identification Act.  But the court also addressed a new claim—that the California law violates the Dormant Commerce Clause of the United States Constitution.

In Clark v. Citizens of Humanity, LLC, plaintiff alleged that defendants’ jeans were falsely labeled as “Made in USA” when they actually contained fabric, thread, buttons, rivets, or subcomponents of the zipper manufactured outside … Continue Reading

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