This past week, several consumer protection and regulatory actions made headlines:
FTC Announces Substantial Maximum Civil Penalties Increases Due to “Catch-Up” Cost-of-Living Adjustment
Pursuant to the Federal Civil Penalties Inflation Adjustment Act of 2015, the FTC has approved new maximum civil penalties for 16 law provisions governed by the Agency. Many of the maximum penalties had not been adjusted in decades and are increasing substantially under the statutorily mandated “catch up” cost-of-living adjustment. Of special note, the maximum civil penalty amount increased from $16,000 to $40,000 for violations of:
- Section 5(l) of the FTC Act (violations of final Commission orders issued under section 5(b) of the FTC Act).
- Section 5(m)(1) of the FTC Act (violations of certain trade regulation rules and other laws enforced by the FTC with civil penalty provisions).
- Section 7A(g)(1) of the Clayton Act 9 (violations of premerger reporting and waiting requirements under the Hart-Scott-Rodino Improvements Act).
The new maximum penalties will take effect in August 1, 2016. It is important to note that both the FTC and the courts have discretion on whether to impose a maximum civil penalty, and will consider a number of factors when making that determination.
Plaintiffs Allege Banana Boat Slips Up Over False SPF Advertising
Last week, two putative class actions were filed in federal court in New Jersey and California against the makers of Banana Boat brand sunscreen. According to the complaints, Banana Boat Kids SPF 50 and Banana Boat Kids Tear-Free Sting-Free Lotion are claimed to have an SPF of 50. Plaintiffs in both lawsuits point to tests conducted by Consumer Reports earlier this year suggesting the actual SPF in the products was well below the American Academy of Dermatology’s recommended SPF of 30.
The suits allege that Edgewell Personal Care Co., Playtex Products LLC and Sun Pharmaceutical, LLC (joint-manufacturers) knew that the products did not actually provide the stated SPF protection on their labels and have profited off these knowingly false statements.
Seventh Generation “Natural” Detergent Class Action Settled
Seventh Generation, Inc. has agreed to pay a class action settlement of $4.5 million to settle claims that it deceptively and misleadingly marketed products as “natural.” The products at issue were “natural” dish and laundry detergent that contained synthetic ingredients. As such, the class brought claims that Seventh Generation was misleading consumers by marketing and labeling these products as “natural.” In addition to paying the $4.5 million settlement, Seventh Generation will no longer market or label products containing synthetic ingredients as “natural.”