This past week, several consumer protection and regulatory actions made headlines:
Mars Petcare Settles With the FTC Over False Advertising Claims
Mars Petcare U.S., Inc., (“Mars Petcare”) has agreed to settle FTC allegations that the company falsely advertised its Eukanuba dog food.
The FTC’s complaint alleges that, in 2015, Mars Petcare claimed in TV, print and Internet ads that its dog food could increase a dog’s lifespan by 30 percent or more. This claim was allegedly based on a 10-year study of dogs who were fed Eukanuba. According to the FTC, the claim was false or unsubstantiated.
The proposed consent order prohibits Mars Petcare from: (1) making any false or unsubstantiated claims that Eukanuba or any other pet food will increase a pet’s lifespan by 30 percent or more; (2) making any unsubstantiated claims regarding the health benefits of its pet food; and (3) misrepresenting any studies or falsely claiming that any claimed health benefits are scientifically proven.
Comcast Sued by Washington AG Over Service Plan
The Washington Attorney General filed suit against Comcast in state court alleging 1.8 million violations of Washington’s Consumer Protection Act.
The suit alleges that Comcast deceptively marketed its “Service Protection Plan”; more specifically, the Attorney General alleges that Comcast misrepresented the scope of coverage under the plan, charged improper service fees and improperly ran credit checks on certain customers.
The Attorney General is seeking more than $100 million from Comcast as well as a permanent injunction restraining Comcast from engaging in the alleged conduct.
NARB Recommends Changes to T-Mobile Claims
The National Advertising Review Board (“NARB”) recommended that T-Mobile USA, Inc. improve its disclosures to customers related to its “Ditch and Switch” campaign, as well as either alter or discontinue claims capping consumer reimbursements.
In the underlying case, the National Advertising Division (“NAD”) found that there was no evidence to support T-Mobile’s claims that customers who switched to T-Mobile would not have to pay their device balance with their previous carriers because T-Mobile would provide a reimbursement sufficient to cover that expense. The NAD recommended that T-Mobile discontinue certain claims, including that it would “pay off your phone,” “pay off every last cent” or “cover every penny” when a customer switched. The NAD also recommended that T-Mobile stop claiming that it would reimburse up to $650 per phone because T-Mobile represented that there was, in fact, no monetary limit on the reimbursement.
T-Mobile appealed, and a NARB panel considered whether the claims related to paying off customers’ phones were literally false. The panel found that with clear and conspicuous explanatory language, customers would understand T-Mobile’s claim. However, it found that the language used by T-Mobile did not explain how the reimbursement worked and was not conspicuous, and found it necessary for T-Mobile to improve its disclosures. With respect to the reimbursement limit, the NARB panel recommended that T-Mobile change or discontinue the “up to $650” language to accurately reflect any limits on reimbursement.
Pennsylvania Judge Dismisses Majority of “All Natural” Claims Against Herr Foods
A federal judge in Pennsylvania dismissed several claims in a putative class action against Herr Foods Inc. (“Herr”), including claims for violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, fraudulent misrepresentation, negligent misrepresentation, breach of contract and unjust enrichment.
In Whitaker v. Herr Foods, Inc., the plaintiff alleged that Herr’s packaged snacks were mislabeled as free from preservatives, MSG and trans fat, and as “all natural.” The plaintiff also alleged that he paid a higher price for the products based on those representations.
The court dismissed the plaintiff’s breach of contract claim for lack of privity, finding that he failed to allege that he purchased any product directly from Herr’s. The court dismissed several other claims, stating that under Pennsylvania’s economic loss doctrine, “no cause of action exists for negligence that results solely in economic damages unaccompanied by physical or property damage.”
Herr’s did not seek dismissal of the breach of warranty claim, which the court noted was the appropriate action for injury flowing from a customer’s “disappointed expectations as to the product he purchased.”
“Nothing Artificial” Suit Against Duncan Hines Will Move Forward
A Missouri federal judge denied a motion to dismiss a putative class action bringing claims for violation of the Missouri Merchandising Practices Act and unjust enrichment.
The plaintiff in Thornton v. Pinnacle Foods Group, LLC alleged that Duncan Hines mislabeled its Simple Mornings Blueberry Streusel Premium Muffin Mix as containing “Nothing Artificial.” The plaintiff also asserted that she paid a premium based on that misrepresentation.
Duncan Hines moved to dismiss the suit on the grounds that a reasonable consumer would not have been deceived because the ingredient list was disclosed on the box. The court found it plausible that a consumer could rely on the representation without looking at the ingredients or may not know that a particular ingredient is artificial. Ultimately, the court held that whether “a reasonable consumer would be deceived by a product label is generally a question of fact that cannot be resolved on a motion to dismiss.”