On February 19, 2020, the Seventh Circuit, aligning with previous decisions of the Eleventh and Third Circuits, held in Gadelhak v. AT&T Services, Inc. that a defendant’s dialing system did not constitute an “automatic telephone dialing system” (ATDS) under the meaning of the Telephone Consumer Protection Act where it was not capable of generating random and sequential numbers.
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On February 12, 2020, the FTC announced its intention to review its Endorsement Guides (formally known as the “Guides Concerning the Use of Endorsements and Testimonials in Advertising”). These guides, first enacted in 1980 and revised in 2009, provide guidance to businesses, influencers and endorsers on how to make sure endorsements or testimonials abide by the requirements of the FTC Act. While advisory in nature, the Commission can take action under the FTC Act if an endorsement or testimonial is inconsistent with the Guides.
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On February 5, 2020, the FTC announced two settlements totaling nearly $3.4 million against Quantum Wellness Botanical Institute, LLC and their principals for claims made to older adults that the “ReJuvenation” pill was an “anti-aging wonder drug.” For example, they represented that the pill could boost HGH levels and add stem cells to the body, thereby repairing age, cell, and heart attack damage; reversing deafness or blindness; and reversing damage from any disease, including Alzheimer’s, Parkinson’s, and Crohn’s disease.
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On February 3, 2020, the FTC announced a $350,000 settlement with Shop Tutors Inc., d/b/a LendEDU, a website that ranks and rates consumer financial products such as student and personal loans. The FTC’s complaint alleged that LendEDU and its principals violated the FTC Act by misleading consumers into believing that their website offered consumers “objective,” “accurate” and “unbiased” information, despite the fact that the company was alleged to be selling rankings and ratings to the highest bidder.
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The Florida legislature has introduced identical bills in the Florida House of Representatives (HB 963) and the Senate (SB 1670) (collectively the Act) that, if adopted, will require companies operating websites and other online services in the state to inform Florida consumers whether it is collecting personal information, and to provide an opportunity for the consumer to opt out of the sale of the personal information.
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A new bill introduced in Congress earlier this month could increase litigation risk for the retail industry by leaving companies unable to prevent the Consumer Product Safety Commission (CPSC) from disclosing inaccurate or premature information about potential product hazards. The Safety Hazard and Recall Efficiency (SHARE) Information Act, introduced on January 9, 2020, by U.S. Representative Bobby L. Rush (D-IL), would also increase the maximum civil penalty for violations of the Consumer Product Safety Act (CPSA) from $15 million to $50 million. Largely seen as a response to public criticism over the perceived delays in the CPSC’s disclosure of hazards associated with infant inclined sleepers over the last year, the SHARE Information Act would allow the CPSC to tell the public that a product may pose a safety issue before the hazard has been confirmed.
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Innovation and developments in technology bring both opportunities and challenges for retailers, and Hunton Andrews Kurth has a sophisticated understanding of these issues and how they affect retailers. On January 23, 2020, our cross-disciplinary retail team, composed of over 200 lawyers, released our annual Retail Industry Year in Review.
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Responding to a challenge brought by HelloFresh (Grocery Delivery E-Services, USA), the National Advertising Division (NAD) affirmed that Home Chef (Relish Labs, LLC) offered reasonable grounds on which to base its claims that its meal kit delivery service offers consumers more flexibility than HelloFresh’s similar service. In particular, NAD noted that Home Chef’s “Customize It” feature provides ample variety, permitting consumers to upgrade or increase the amount of protein in their weekly meal selections, or even change recipes entirely by switching out the protein.
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