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

Federal Court in Florida Grants FTC a Win in Gastric Bypass Alternative Case

A U.S. district court in Florida has ruled in favor of the FTC in its longstanding litigation against Roca Labs, Inc., a seller of weight-loss powders advertised as an alternative to gastric bypass surgery. The court found that Roca Labs had made deceptive weight-loss claims and misrepresented that one of its promotional websites was an objective information site. The court also found that Roca Labs’ gag clause, which the company used to sue and threaten to sue customers who shared negative comments or complained about their dissatisfaction with the product, was unfair under the FTC Act. After additional briefing, the court will decide how much of the defendants’ $26.6 million in gross sales should be awarded in consumer redress. Continue Reading Consumer Protection in Retail: Weekly Roundup

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

“Black Truffle Flavored Extra Virgin Olive Oil” Case Dismissed Against Trader Joe’s

On August 30, 2018, the Southern District of New York dismissed class action claims for consumers who purchased Trader Joe’s “Black Truffle Flavored Extra Virgin Olive Oil.” The complaint alleged that the product label contained the words “black truffle” in large black letters, with the words “flavored” and “extra virgin olive oil” in smaller cursive letters underneath. However, DNA testing revealed that the oil did not contain actual truffle, but rather 2,4-dithiapentane, a petroleum-based synthetic injection that imitates the taste and smell of truffles. Continue Reading Consumer Protection in Retail: Weekly Roundup

Just weeks after a federal judge called the science behind the alleged carcinogenicity of glyphosate “shaky,” a California state court jury hammered Monsanto with a $289 million verdict, blaming a former groundskeeper’s non-Hodgkin’s lymphoma on his exposure to the Roundup® chemical. The August 10, 2018, verdict in Johnson v. Monsanto Co., No. CGC16550128 (California Superior Court, County of San Francisco)—which included $250 million in punitive damages—was just the first in the nearly 8,000 Roundup-related cases currently pending against Monsanto, many of which are consolidated in multidistrict litigation in California federal court. The intense publicity surrounding the verdict has left retailers whose products contain ingredients that might have been treated with glyphosate wondering whether their products may be targeted next.

Read our full alert.

On August 29, 2018, despite industry criticism, the California state legislature passed AB 2998 (the “Bill”), which will require that levels of chemical flame retardants in covered products be below 1,000 parts per million. The Bill, which the governor is expected to sign into law, states that starting January 1, 2020, distributing children’s products, mattresses and upholstered furniture containing most chemical flame retardants will be illegal in the state of California. Samples of covered products sold to consumers will be provided to California’s Department of Toxic Substances Control for testing, and if a product is found to be noncompliant, a fine may be assessed against the manufacturer, distributor and/or retailer.  Continue Reading California Bans Use of Most Chemical Flame Retardants in Children’s Products and Furniture as the CPSC Prepares to Take Action on the Flammability of Upholstered Furniture

This month marks the 10th anniversary of the Consumer Product Safety Improvement Act (“CPSIA”), which was signed into law on August 14, 2008. CPSIA was a bipartisan response to unsettling events in the world of consumer products that occurred in 2007. During that landmark year, reports emerged about lead contamination in a wide range of consumer products—including children’s toys—that forced the CPSC into the national spotlight and facilitated over 400 recalls. The CPSIA aimed to significantly enhance the CPSC’s regulatory and enforcement power by doubling its budget, increasing its staff levels, prohibiting the sale of recalled products and increasing its civil penalties. For example, before CPSIA, the CPSC could impose civil penalties in the amount of $8,000 per violation, with a maximum of $1.825 million. But in 2008, CPSIA increased significantly the amount of civil penalties to $100,000 per violation, with a maximum of $15 million, adjusted for inflation. Continue Reading Recall Roundup: August

The Federal Trade Commission announced the opening dates of its Hearings on Competition and Consumer Protection in the 21st Century, a series of public hearings that discuss whether broad-based changes in the economy, evolving business practices, new technologies or international developments might require adjustments to competition and consumer protection law, enforcement priorities and policy. The FTC and Georgetown University Law Center will co-sponsor two full-day sessions of hearings on September 13 and 14, 2018, to be held at the Georgetown University Law Center facility.

Panelists at the hearings will consider, among other topics, the regulation of consumer data and whether the U.S. economy has become more concentrated and less competitive. The FTC invites public comment on any of the issues.

More information is available on the FTC’s website.

Consumer lawsuits under the Telephone Consumer Protection Act (“TCPA”) have surged following a 2015 declaratory order from the Federal Communications Commission (“FCC”), which included an expansive interpretation from the FCC of what constitutes an “automatic telephone dialing system” (“ATDS”). The D.C. Circuit’s much-awaited decision in ACA International v. Federal Communications Commission, 885 F.3d 687 (D.C. Cir. 2018) earlier this year set aside much of the FCC’s prior interpretation of what qualifies as an ATDS. ACA International was widely seen as a win for businesses and advertisers, but the decision has done little thus far to stem the tide of TCPA lawsuits, especially as the scope of the decision continues to play out. Continue Reading Businesses Yet to See Major Relief from TCPA Lawsuits Following ACA International Decision

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

FTC Used Car Lot Sweep Finds 70 Percent Compliance with New “Buyers Guide”

Last month, the FTC announced the results of its compliance sweep of 94 car dealerships in 20 cities across the country, conducted after the FTC’s amended Used Car Rule (the “Rule”) took effect earlier this year. The revised Rule requires dealers to display a revised “Buyers Guide” containing warranty and other important information—such as a new description of an “As Is” sale—on the window of each used car offered for sale. According to the FTC, 70 percent of the 2,300 vehicles inspected displayed a buyer’s guide; over half of those with the guide displayed the updated version. As a follow-up, the FTC sent letters to each dealership inspected, detailing their findings and providing businesses with guidance material to help aid in compliance. Continue Reading Consumer Protection in Retail: Weekly Roundup

As reported on Hunton’s Privacy and Information Security Law blog, on June 28, 2018, the Governor of California signed AB 375, the California Consumer Privacy Act of 2018 (the “Act”). The Act introduces key privacy requirements for businesses, and was passed quickly by California lawmakers in an effort to remove a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative. The Act will take effect January 1, 2020. Continue Reading California Consumer Privacy Act Signed, Introduces Key Privacy Requirements for Businesses

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

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted. Continue Reading Consumer Protection in Retail: Weekly Roundup