Consumer Protection Review

The latest legal updates in marketing, consumer products & consumer protection

A customer who is blind has sued Five Guys Enterprises in the Southern District of California, claiming that he could not access the Freestyle Coca-Cola soda machine in a Five Guys restaurant.  The parties each filed a motion for summary judgment on the issue of whether Five Guys violated the Americans with Disability Act (ADA), California’s Unruh Act and California’s Disabled Person Act (DPA) when its employees did not offer to help the customer use…
Key Takeaway: Companies making Made in USA claims should adhere to Federal Trade Commission guidance and state law, as such claims are likely to draw attention from regulators and class action plaintiffs.  Additional detail on regulatory compliance can be found in our prior post. Deceptive Made in USA advertising continues to draw attention from the FTC. The FTC recently settled with hockey puck producer Patriot Puck and recreational equipment sister companies Sandpiper and PiperGearUSA…
Consumers notice and are more likely to buy products that are marketed as Made in USA, but companies face significant legal risk, negative publicity, and decades of government oversight if they overstate the extent to which their products are made in the United States. Companies marketing their products without qualification as Made in USA must at least meet the “all or virtually all” standard, meaning that all significant parts and processing that go into the…
Takeaways: Support any comparative claims and clearly disclose the basis of the comparison. Be specific about claims regarding products or components made in the United States. Last month, the National Advertising Division (NAD), a self-regulatory body, recommended that Telebrands, Corp., discontinue certain advertising claims for the company’s Atomic Beam flashlight, including claims comparing its brightness and durability, associating it with the U.S. military, and identifying its components as made in the United States. NAD recommended,…
You see it and your heart sinks: a one-star review with negative feedback for your business on an online review site. You think it’s unlawful and want it taken down. What do you do? The California Supreme Court recently considered a case showing what not to do. In Hassell v. Bird, Ava Bird left one-star reviews for her lawyer, Dawn Hassell, on Yelp. Ms. Hassell wanted the reviews taken down so she sued Ms.…
California’s updated automatic renewal law (ARL) took effect on July 1, 2018.  We covered these changes in a 2017 client alert, but a reminder is important here because the new law is now “live” and we expect to see more enforcement efforts for alleged noncompliance with the law. The ARL sets rigid rules about transparency for subscription-based business models where the subscription is automatically renewed, and the subscriber is charged, on a recurring basis…
A California appeals court has allowed a putative-class-action complaint to proceed against an online retailer based on a consumer’s allegation that the retailer falsely advertised price discounts and that the consumer would not have purchased the items if he knew he was not receiving a discount. In Hansen v. Newegg.com Americas Inc., Case No. B271477, the Fifth Appellate District of the California Court of Appeals reversed the lower court. The lower court had dismissed for…
  Takeaways: Health-related advertising claims must be supported by competent and reliable scientific evidence, generally consisting of human clinical trials that are methodologically sound and statistically significant to the 95% confidence level. Advertising claims must be clearly expressed as ingredient claims if the substantiation addresses only the efficacy of the ingredients in the product, not the product itself.…
Facebook has implemented a new policy regarding ads related to cryptocurrency. While Facebook previously banned all such ads, under the revised policy effective June 26, advertisers of cryptocurrency content may apply online for approval of their advertisement. “Cryptocurrency content” is considered by Facebook to include “any advertisements or content in any way related to cryptocurrency”. In the application, advertisers are asked about their relevant licenses, whether their company is traded on a public stock exchange,…
The NAD recently recommended that Perdue Farms, Inc. modify or discontinue certain TV and YouTube ads about Perdue’s “Harvestland Organic” chicken. Tyson Foods, Inc. challenged the Perdue ads before the NAD, arguing that they broadly communicated that all of Perdue’s chickens are “happy” and raised “organically” (free-range, non-GMO, 100% vegetarian-fed, and raised without antibiotics). Perdue responded that ads only communicated claims about Perdue’s “Harvestland Organic” sub-brand. The NAD, however, viewed the overall “net impression” conveyed…