On April 17, 2019, the United States Environmental Protection Agency (EPA) issued a final “significant new use rule” (SNUR) prohibiting over one dozen uses of asbestos from returning to the marketplace without EPA review and approval.
The National Advertising Division (“NAD”) has recommended that Goya Foods, Inc. toss claims that its Excelsior brand pasta is “Puerto Rico’s Favorite Pasta,” following a challenge by Goya’s competitor, Riviana Foods, Inc. Riviana, the maker of Ronzoni pasta, argued that Goya had not substantiated its “favorite” claim through consumer survey or sales data. Goya responded that its claim was classic puffery. NAD disagreed with Goya, finding that “favorite” is objectively measureable and means a product is preferred over all others. NAD recommended that Goya discontinue the claim. Goya stated that it will appeal NAD’s finding.
The U.S. Department of Justice announced major news in the world of consumer products this month. A federal grand jury recently indicted two corporate executives for their roles in an alleged scheme involving residential dehumidifiers. The executives were charged with conspiracy to commit wire fraud, conspiracy to defraud the CPSC, and failure to furnish timely information under the Consumer Product Safety Act.
On March 20, 2019, the Securities and Exchange Commission adopted amendments to simplify and modernize disclosure requirements. These amendments implement recommendations from the Fixing America’s Surface Transportation (FAST) Act and are intended to make disclosures easier to read and navigate and to reduce repetitive and immaterial information.
The FTC teamed up with the U.S. Food and Drug Administration, sending warning letters to three companies: NutraPure, LLC, PotNetwork Holdings, Inc., and Advanced Spine and Pain LLC (d/b/a Relievus) that advertised CBD supplements as treatments for serious diseases such as cancer, Alzheimer’s disease, fibromyalgia and “neuropsychiatric disorders.” The two agencies told the companies to steer clear of false or unsubstantiated health claims and instructed the companies to notify the FTC within 15 days of the specific action taken to address the agencies’ concerns.
The FTC recently sent warning letters to eight marketers of lab-created diamonds concerning implied claims on social media that their diamonds are mined (rather than simulated) and that their jewelry is “eco-friendly” or “sustainable.” The FTC’s Jewelry Guides contain specific requirements for disclosing lab-created properties and avoiding misperceptions that gems are natural. Moreover, the FTC’s Green Guides require that marketers have a reasonable basis for all express and implied environmental benefits claims.
In a case signaling that the FTC intends to continue its crackdown on review manipulation, snack company UrthBox, Inc. has reached a settlement with the FTC after allegedly misrepresenting that its customer reviews were independent, despite the fact that reviewers had been incentivized with free products and other goodies. According to the FTC, UrthBox also failed to adequately disclose to consumers key terms of its “free trial” automatic renewal programs. The settlement requires UrthBox to take all reasonable steps to remove any reviews or endorsements with which it has a material connection from online review websites, to disclose negative option and free trial features, and to pay $100,000 in consumer redress.
Each year, the California Chamber of Commerce (“Chamber”) identifies proposed state legislation that the Chamber believes “will decimate economic and job growth in California.” The Chamber refers to these bills as “Job Killers.” In March, the Chamber identified the first two Job Killers of 2019: AB 51 and SB 1. Both bills would negatively impact retailers in California. You can view the Chamber’s Job Killer site here.
Ghost kitchens are one of the hottest trends in food. Ghost kitchens (also known as dark kitchens, cloud kitchens, and virtual restaurants, among a slew of other flashy names) are delivery-only restaurants found almost exclusively on food delivery apps like UberEats and Grubhub. Rather than storefronts with dining areas, they usually operate out of existing restaurants, commissary kitchens or food trucks.
The FTC has announced that it will host a workshop on July 16, 2019, called Nixing the Fix: A Workshop on Repair Restrictions, aimed at examining manufacturer restrictions on consumer and third-party product repairs and the extent to which such restrictions implicate consumer protection. The announcement lists covered topics, including the interplay between repair restrictions and consumer protection laws like those in the Magnuson-Moss Warranty Act; the impact of repair restrictions on extended warranties and service agreements; the types of repair reductions in the United States and extent to which these restrictions are used; and consumers’ understanding about the existence and effects of repair restrictions, among other subjects.