This week, the FTC voted 3–1 to accept a settlement agreement with MoviePass, Inc., its parent company, and two of the now-defunct company’s former employees, after allegations of data security issues and deceptive trade practices. The Commission brought an enforcement action against MoviePass pursuant to the FTC Act and the Restore Online Shoppers’ Confidence Act (“ROSCA”), the latter of which requires disclosure of all material terms, a consumer’s informed consent, and a simple mechanism to stop recurring charges when marketing negative option services.

Continue Reading Now Playing at the FTC: MoviePass Data Security Case and ROSCA Settlement

In a recent case, Trimble Inc. v. PerDiemCo LLC, No. 2019-2164 (May 12, 2021), the Federal Circuit found that, sometimes, threatening a patent infringement action, or entering extensive patent license negotiations prior to filing suit, with a company having a presence in a particular state could subject you to jurisdiction in that state, even if you are located elsewhere.

Continue Reading Forum Shopping: How A Retailer’s Patent-Related Communications May Impact Jurisdiction

The CPSC most commonly works with manufacturers, sellers, or those in the distribution chain to prompt them to issue warnings or recall notices to consumers. Recently, however, the CPSC has taken the far more unusual step of independently issuing its own warnings to consumers about dangerous products in three circumstances involving treadmills, youth ATVs, and bed rails.

Continue Reading Recall Roundup: April

The Second Circuit just affirmed the dismissal of a data breach class action predicated on an alleged increased risk of identity theft on Article III standing grounds.  McMorris v. Carlos Lopez & Assocs., LLC, No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021).  Notably, the district court that dismissed the action raised the issue of standing sua sponte in advance of a scheduled class settlement fairness hearing. Continue Reading Second Circuit Affirms Dismissal of Data Breach Class Action on Article III Standing Grounds, Citing Unanimity of Circuits on “Increased Risk” Claims

In 1973, Congress amended the FTC Act by adding §13(b), giving the Federal Trade Commission (“FTC”) equitable powers to remediate any violation of any law under its purview.  Using that power, the FTC has sought equitable monetary relief, including restitution and disgorgement. The lower courts routinely authorized such relief and Congress seemingly acknowledged the FTC’s power when it reauthorized the FTC Act. Despite those headwinds, today the Supreme Court unanimously held in a highly-anticipated case, AMG Capital Management, LLC v. FTC, that the FTC cannot seek or obtain equitable monetary relief pursuant to §13(b).

Continue Reading In a Rebuke to Longstanding FTC Approach, Supreme Court Rules FTC Cannot Rely on “Injunction” Provision to Obtain Equitable Monetary Relief

The Consumer Product Safety Commission (CPSC) has proposed a Direct Final Rule implementing the new federal upholstered furniture flammability standard.  The Direct Final Rule, published by the CPSC on April 9, 2021, would codify California’s TB 117-2013 flammability standard as mandated by Congress, but with the following significant clarifications: Continue Reading CPSC Proposes Clarifications for New Furniture Flammability Regulation

The Fifth Circuit recently issued an opinion concluding that the CPSC violated the APA when it issued a final rule in 2017 limiting phthalate content in children’s products. The Consumer Product Safety Improvement Act of 2008 (CPSIA) bans children’s toys and child care articles containing more than 0.1 percent of several phthalate chemicals because of concerns that ingestion can have harmful health effects on children. Phthalates are used to make soft and pliable plastics, such as vinyl. The CPSIA also directed the agency to promulgate a final rule regarding phthalates. In 2017, the CPSC issued a final rule expanding the list of phthalates covered by the ban.

Continue Reading Recall Roundup: March

In a February 3, 2021 decision, the US Court of Appeals for the Seventh Circuit determined that the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) may require employers to provide employees with short-term paid military leave. Specifically, if an employer provides short-term paid leave for other comparable purposes such as sick time, jury duty, or bereavement, then the employer may need to do the same for military leave.

Continue Reading Seventh Circuit Ruling Means Retailers May Need to Provide Paid Leave Under USERRA

Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration. Illustrating the interconnectedness of the trending issues, climate change and environmental justice are pillars of ESG.

Continue Reading Environmental, Social and Corporate Governance: What are the Risks, Really?

As California continues to advance its reopening efforts, the state’s retailers are grappling with rapid changes to the law surrounding their operations and the management of their workforce during the COVID-19 pandemic.  One area that has seen frequent change is the sick leave landscape in California.  While the last statewide California sick leave law (applying to businesses with 500+ employees) expired on December 31, 2020, the state has now created a new sick leave entitlement that will create new challenges for retailers in the Golden State.

Continue Reading California Passes New COVID-19 Sick Leave Requirements for 2021