This past week, several consumer protection and regulatory actions made headlines:
Court of Appeals Rules Spokeo Requires Actual Harm
A three-judge appellate panel dismissed the case in Hancock et al. v. Urban Outfitters, a putative class action against two retailers, Urban Outfitters and Anthropologie, who were alleged to have violated District of Columbia consumer protection laws by seeking consumers’ zip code information.
The D.C. Circuit held that the Supreme Court’s recent decision in Spokeo v. Robins requires an allegation of actual harm for the lawsuit to survive. Here, plaintiffs acknowledge there was no allegation of actual harm, but the court held “an asserted injury to even a statutorily conferred right ‘must actually exist’…and must have ‘affect[ed] the plaintiff in a personal and individual way[.]’” Thus, the Court found the plaintiffs did not have standing to bring this cause of action, reversed the lower court’s ruling and remanded the case to the trial court with instructions to dismiss the case.
California Judge Says No Sale to Lawsuit Against Fashion Accessories Retailer Dooney & Bourke
A federal judge in California dismissed a putative class against Dooney & Bourke over alleged claims brought under California’s Unfair Competition Act, Consumer Legal Remedies Act and negligent misrepresentation.
In Rael v. Dooney & Bourke, the plaintiff alleged Dooney & Bourke misled consumers in their outlet stores by showing a fake “original” price and a “sale” price, which led consumers to believe they were getting a deal. According to the plaintiff, Dooney & Bourke never actually charged anyone the “original” price, so consumers were not actually receiving a discount.
The court found that the plaintiff failed to plead specific facts to support its allegations. For example, according to the court, it was not clear from the complaint what the basis was for the allegations that the prices were false, how this basis was determined or whether the plaintiff was alleging the products were inferior. The court did provide leave for plaintiff to amend.
Sony Sued Over PlayStation’s Websites’ Terms and Conditions
A putative class action has been filed in a New Jersey federal court alleging that Sony Entertainment’s terms and conditions on its PlayStation websites bind customers to an unfair and illegal contract that requires them to waive their consumer protection and warranty rights.
Specifically, the complaint alleges the terms and condition (“TOCs”) violate the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act’s (“TCCWNA’s”) ban on contracts that “violate any clearly established legal right of a consumer” by depriving users to seek legal action against Sony for any harm its website might cause.
The complaint alleges the TOCs suggest that by using the website, customers agree to a binding contract absolving the company to protect consumers from false content or the sale of substandard products.
Plaintiffs allege the class includes thousands of New Jersey residents who made purchases on or used the PlayStation websites. Plaintiffs are seeking the statutory penalties for each violation of the TCCWNA, interest, cost, attorneys’ fees and injunctive relief.
CARU Finds Boy’s Life ”Collect It” Feature is Editorial, Not Native Advertising
The Children’s Advertising Review Unit (“CARU”) determined Boys Life did not act inappropriately when it featured “Captain America: Civil War” action figures in its “Collect It” section. At issue was whether the magazine improperly blurred the lines between advertising and editorial content.
Boys Life’s “Collect It” is a regular feature where readers tell the magazine what they like to collect. The June 2016 issue of Boys’ Life recommended “Captain America: Civil War” action figures, and included a link to Hasbro’s Marvel product page. Boys Life indicated to CARU that “Collect It” was not an advertisement, but editorial content, and that its editors had tested and studied the product and were, indeed, recommending it. Accordingly, CARU determined that the feature did not present a concern under CARU’s Guidelines.