Branded keyword advertising (“BKA”)—bidding for your company’s website to feature prominently near a search engine’s results for branded or trademarked terms—has been around for over a decade. Under this practice, search engines auction off keywords, and the highest bidders receive advertising space adjacent to search results for those terms. Brand owners commonly bid on their own keywords and those of their competitors and related third parties.

Concerns that BKA runs afoul of trademark, false advertising, and unfair and deceptive trade practices laws were largely put to rest in 2013 and 2014, when a wave of court decisions held that, on its face, the practice does not constitute trademark infringement or cause customer confusion. However, a new challenge to BKA emerged earlier this year with the filing of Tichy v. Hyatt Hotels Corp., No. 1:18-cv-01959 (N.D. Ill.). In Tichy, a putative class of online consumers alleges that six major hotel chains violated antitrust laws by conspiring with each other and with third-party online travel agencies like Expedia and Priceline to refrain from bidding on each other’s branded keywords. Continue Reading Exposure for Branded Keyword Advertising in Hospitality and Retail

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.

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

A recent Supreme Court ruling regarding sales taxes and new tariffs on Chinese imports instituted by the Trump administration will impact many retailers, which could in turn have an effect on M&A activity in the retail industry. Continue Reading SCOTUS Tax Ruling and New Tariffs Could Affect Retail M&A Activity

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

What is California’s Proposition 65?

California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is one of the most onerous chemical right-to-know statutes in the nation. It prohibits businesses with 10 or more employees, including businesses that merely ship products into California, from exposing people in California to listed chemicals without providing a “clear and reasonable” warning.

Why Should I Care?

Bringing a Prop 65 action is relatively easy and lucrative for private plaintiffs and their counsel. In 2017, there were nearly 700 cases settled with defendants paying more than $25,000,000 in plaintiffs’ attorneys fees and penalties. This does not include defense counsel fees, business interruption and other costs to comply. Continue Reading New California Prop 65 Warning Regulations: What Businesses Need To Know Before August 30, 2018

As website accessibility lawsuits continue to surge, places of public accommodation oftentimes battle multiple lawsuits filed by different plaintiffs represented by different attorneys. Even after entering into private settlements, which include detailed website remediation plans, defendants may continue to be the target of these lawsuits by copycat plaintiffs. The Eleventh Circuit recently addressed this dynamic head-on, and held that a private settlement entered into by Hooters and a first-filed plaintiff did not moot a nearly identical, later-filed website accessibility lawsuit by a different plaintiff. This case underscores the importance of quickly remediating website accessibility issues, as well as taking care to draft settlement agreements to maximize arguments that future lawsuits are barred. Continue Reading Website Accessibility Update: Eleventh Circuit Holds a Private Settlement with One Plaintiff Will Not Moot a Nearly Identical Lawsuit By Another

On June 25, 2018, the Supreme Court upheld a Second Circuit opinion that American Express did not violate antitrust law by prohibiting merchants from encouraging customers to use non-American Express credit cards. As part of their agreements with American Express, merchants were required not to steer customers to use non-American Express credit cards (merchants could still express a preference for cash, checks or debit cards). The state of Ohio, the United States, and several other states brought suit alleging that these “anti-steering” provisions violated Section 1 of the Sherman Act as an “unreasonable restraint of trade.” The Supreme Court opined that the relevant market in which to assess the anti-steering provisions is two-sided; that is, courts must consider competitive effects and benefits on both the consumer payments and payment processing sides of the transactions.