The New CFPB – A Review of Actions Taken by Acting Director Mulvaney During the First Three Months of his Tenure

From the outset it was clear that Mr. Mulvaney’s tenure as acting director of the CFPB would be a political flashpoint. His contentious appointment set the stage for a potential sea change in the agency’s enforcement and rulemaking agenda. Many anticipated that the former South Carolina congressman and current director of the Office of Management and Budget would completely overhaul the CFPB. After only three months on the job, Acting Director Mulvaney has already made several moves indicative of his intent to temper the aggressive stances taken by his predecessor, Richard Cordray, including halting the implementation and enforcement of certain rules against payday lenders, issuing a revamped strategic plan for the agency and seeking public input through broad requests for comment and information.

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This is the seventh in a series of articles from Hunton & Williams LLP discussing reform efforts related to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

FTC v. AT&T Mobility: “Good News for Consumers” Per FTC Chairman

The Ninth Circuit Court of Appeals rules en banc in FTC v. AT&T Mobility, LLC, that the FTC could challenge AT&T’s broadband data throttling practices, despite the fact that AT&T is a “common carrier” subject to exemption under the FTC Act. The court ruled that the common carrier exemption was activity-based rather than status-based. Therefore, the FTC may challenge a carrier’s non-carriage unfair or deceptive acts or practices. Simply put, “a phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology means that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more.” Acting FTC Chairman Maureen K. Ohlhausen issued a statement praising the Ninth Circuit’s decision as “good news for consumers.” Continue Reading

SEC Staff Permits Exclusion of Shareholder Proposal Under Economic Relevance Exception

At the end of February, the SEC staff issued a No-Action Letter to Dunkin’ Brands Group, Inc., permitting the company to exclude a shareholder proposal under Rule 14a-8(i)(5), often referred to as the economic relevance exception. This is the first no-action relief granted under the rule since the SEC issued Staff Legal Bulletin No. 14I (“SLB 14I”) on November 1, 2017, and it could have implications for other retailers seeking to exclude shareholder proposals under the rule in the future. Continue Reading

Circuit Courts Recognize Employment Protections for Sexual Orientation Under Title VII

Last week, the United States Court of Appeals for the Second Circuit, sitting en banc, became the second federal appellate court to officially recognize a discrimination claim under Title VII based solely on the plaintiff’s sexual orientation. The Court’s decision in Zarda v. Altitude Express follows on the heels of the Seventh Circuit’s decision last April in Hively v. Ivy Tech Community College of Indiana, in which the Seventh Circuit also overturned its prior cases to recognize protections based on sexual orientation under Title VII. Continue Reading

Despite Growing Value of Bitcoin, Retailers and Merchants Take a Cautious Approach

Bitcoin has received considerable media attention in recent months as its value soared to $20,000 in December 2017, then retreated to around $9,000 in February 2018, fueling growing speculation regarding its future. While some investors embrace bitcoin, many members of the general public struggle to understand it. And despite the interest in cryptocurrency by investors, as evidenced by the high market value of bitcoin (even after the recent drop in value), very few retailers and merchants accept cryptocurrency as a form of payment. Retailers and merchants appear to (wisely) be taking a cautious approach. The below article considers the reasons why.

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Recall Roundup: February

The CPSC has flexed its regulatory muscle during the first months of 2018 with respect to products that pose risks to children. With the U.S. Department of Justice’s (“DOJ’s”) help, the CPSC secured a $5 million civil penalty against a drug company for its allegedly deficient child-resistant packaging. In December, the DOJ filed a complaint in federal court against the drug company alleging that it knowingly violated the Poison Prevention Packaging Act and the Consumer Product Safety Act by distributing five household prescription drugs with non-compliant child-resistant packaging and failing to report the noncompliance to the CPSC. The complaint alleges that the drug company’s engineers drafted a “risk analysis” memo identifying the packaging as non-compliant. Rather than halt distribution and immediately report the non-compliance to the CPSC, the drug company continued distribution with non-compliant packaging while concurrently developing compliant packaging. The company also waited nearly 15 months before notifying the CPSC of its non-compliant packaging. In January, the federal court entered a consent decree for the matter. The drug company agreed to pay a $5 million civil penalty, implement and maintain a compliance program, and maintain and enforce a system of internal controls and procedures. Continue Reading

Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

TA Sciences Prohibited from Making False and Unsubstantiated Health Claims

Telomerase Activation Sciences, Inc. (“TA Sciences”) has agreed to stop making certain claims as to the anti-aging and other health properties of two of its supplement products, in response to FTC allegations that it made false or unsubstantiated claims regarding the products’ health benefits. The FTC’s order prohibits TA Sciences from misrepresenting that its products are clinically proven to reverse human aging, prevent or repair DNA damage, restore aging immune systems or increase bone density, or misrepresenting that such evidence or studies exists. The order also prohibits the company from (1) representing that paid commercial advertising is independent programing; (2) failing to disclose material connections between a product endorser and the company; (3) representing that any endorser is an independent user of the product; or (4) helping anyone else make false or misleading health and efficacy claims about its products. Continue Reading

Why Blockchain’s Impact on the Retail Sector Is Growing

This was a breakout year for blockchain, the technology providing the platform for cryptocurrencies and the emerging market for initial coin offerings and token sales. With bitcoin capturing headlines because of its soaring price, blockchain’s impact is often misunderstood as narrowly affecting the financial sector. Hunton & Williams LLP’s corporate lawyers Scott H. Kimpel and Mayme Beth Donohue discuss with Law360 why “retail and consumer products companies can no longer afford to ignore blockchain as a passing trend.”

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GrubHub Driver Ruled Independent Contractor in First of Its Kind Gig Economy Trial

In a highly anticipated opinion, a Federal Judge in California ruled in favor of GrubHub, an internet food ordering service, finding it properly classified a delivery driver as an independent contractor.

In Lawson v. GrubHub, the plaintiff, a delivery driver, alleged that GrubHub violated California’s minimum wage, overtime and employee expense reimbursement laws by misclassifying him as an independent contractor when he was really an employee. He brought the case on behalf of himself and as a representative action pursuant to the California Private Attorney General Act. Continue Reading

Palm Springs Retail Revitalization Potentially at Risk

A local newspaper, The Desert Sun, has reported that downtown Palm Springs is in the midst of an economic revitalization. Locals have noticed an increase in foot traffic with the opening of several new stores (including Starbucks, MAC Cosmetics and H&M), and further development is planned. The city held a “grand opening” for the area in late 2017, and Palm Springs city council member Christy Holstege has even referred to a “Palm Springs renaissance.” Continue Reading