On August 2, 2017, the U.S. Senate confirmed one of President Trump’s two management-side appointees, Marvin Kaplan, to the National Labor Relations Board (“NLRB”) in a contentious vote along party lines. Kaplan was sworn in on August 10, 2017, for a term ending on August 27, 2020. Continue Reading
The Santa Barbara City Council, in an effort to combat the retail malaise on State Street in Downtown Santa Barbara, has approved a pilot program that would streamline the permit and review process for potential commercial tenants. Continue Reading
This past week, several consumer actions made headlines that affect the retail industry.
FTC Extends Comment Period for Paint Claims
On August 7, 2017, the FTC extended the public comment period related to four proposed settlements with paint companies. According to the original complaints from June 2017, Benjamin Moore, Imperial Paints, ICP Construction and YOLO Colorhouse deceptively claimed that their paint products were either emission-free or contained zero volatile organic compounds, including during and immediately after application. Continue Reading
As an update to our Recall Roundup’s focus on the fidget spinning craze from June and July, the Consumer Product Safety Commission (“CPSC”) has released spinner safety tips. Although the CPSC still reports no fidget spinner recalls, Acting Chairman Ann Marie Buerkle used the CPSC’s bully pulpit to warn of the choking dangers that result when fidget spinners break and release small pieces. In addition, she references “reports of fires involving battery-operated fidget spinners.” Continue Reading
On August 7, 2017, the FTC announced that it obtained a court order temporarily halting an online marketing scheme that deceptively lured shoppers into expensive negative option plans. The FTC alleged in its complaint that defendants used initial low-cost “trial” offers to hook consumers into expensive monthly shipments for tooth-whitening products without properly disclosing the terms and conditions of the deal or properly obtaining their consent. Continue Reading
The Ninth Circuit will decide whether Great Lakes Reinsurance must defend clothing company, In and Out, against a trademark infringement suit by Forever 21. The dispute focuses on exclusionary language in the general liability policy issued by Great Lakes to In and Out, which broadly bars coverage for claims stemming from violations of intellectual property rights, but which also excepts from the exclusion claims for copyright, trade dress and slogan infringement occurring in the company’s advertisements. The appeal concerns last year’s ruling by a California federal judge that Great Lakes owed a defense because the underlying complaint raised a potential that In and Out’s advertising infringed Forever 21’s trade dress. Continue Reading
In late May 2017, the American Law Institute met to approve the Proposed Final Draft of the first ever Restatement of the Law, Liability Insurance – the culmination of over seven years of work on this project. Not surprisingly, many of the issues discussed in the Restatement have been hotly contested by insurers. The proposed Restatement is important for retail industry insureds because courts around the country may look to this new Restatement in ruling on common insurance coverage disputes arising out of product liability actions, recalls and environmental contamination. For example, some of the most hotly debated sections of the proposed Restatement include, (1) policy interpretation principles, such as when a term is deemed ambiguous; (2) the standard for determining the insurer’s duty to defend; (3) the insurer’s duty to make reasonable settlement decisions; and (4) the allocation of liability in long-tail environmental claims. Continue Reading
In a video roundtable series, Hunton & Williams LLP partners Lisa J. Sotto and Steven M. Haas and special counsel Allen C. Goolsby, along with Stroz Friedberg’s co-president Eric M. Friedberg and Lee Pacchia of Mimesis Law, discuss the special consideration that should be given to privacy and cybersecurity risks in corporate transactions. Continue Reading
Many retailers today face an increasing risk related to product recalls, which can result in extensive losses and a variety of liability claims. For example, a major supplier of meats was recently forced to recall more than seven million pounds of its product after customers found bone fragments and pieces of cartilage in their hot dogs and sausages. The large scope of this recall, and the associated challenges, is by no means unique to this company. Specialized insurance policies should provide protection to minimize most recall losses and exposure from liability claims. However, insurers often seek to rescind recall policies by asking courts to void the policies from their inception, meaning that the polices would not provide any coverage for any pending or future claims. A large number of these recall claims are being brought under New York law. Continue Reading
On July 26, 2017, an amusement ride named “Fire Ball” at the Ohio State Fair broke apart, killing one passenger and injuring seven others. This deadly incident may trigger a CPSC investigation into the matter.
Prior to 1981, the CPSC exercised jurisdiction over all amusement rides. But after several high-profile cases challenged the CPSC’s jurisdiction over amusement rides with mixed results, an amusement parks trade group successfully lobbied Congress to exempt stationary amusement rides from the CPSC’s jurisdiction. In 1981, Congress passed the Consumer Product Safety Amendments, which amended the definition of “consumer product” to explicitly exempt stationary amusement rides.