January 28, 2016

Advertising Law News & Analysis - January 28, 2016

4 min

Special Announcement:

CFPB Draws a Bead on Arbitration Clauses

The Consumer Financial Protection Bureau (CFPB) has released an outline of a possible rule limiting arbitration clauses in consumer financial product and service agreements and is currently working on a proposed rule for public comment. The outline indicates that the proposed rule would eliminate arbitration agreements that limit consumer participation in class actions. It would require the submission of arbitral claims and awards to the CFPB (and, potentially, public posting).

Entities offering credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto loans, short-term, small-dollar loans, and private student loans, among others, would be subject to the rule. Moreover, the CFPB may expand the rule to include additional consumer financial products and services, such as payment processing.

On February 3, Venable will host a practical conversation about what the arbitration clause ban would mean for companies and consumers. Members of Venable's CFPB practice group ‎will review the current state of the rulemaking process and outline what you and your company need to know about what's ahead.


SCOTUS Says Settlement Offers Can't Kill Class Actions

In a hotly anticipated decision, the Supreme Court of the United States (SCOTUS) ruled last week that defendants cannot end class action cases by offering to pay damages and make named plaintiffs whole before they move for class certification, write Venable attorneys Angel A. Garganta, Laura Reathaford, and Cody S. Lonning in a client alert.

Many in the class action defense bar hoped the court would overturn an earlier Ninth Circuit decision and enable defendants to use early settlement offers to end most class actions involving statutory damages. However, in a six-to-three decision penned by Justice Ginsburg, the Court affirmed the Ninth Circuit and followed the reasoning of Justice Kagan's dissent in Genesis Healthcare Corp. v. Symczyk, a 2013 SCOTUS case that dealt with similar facts.

Although the Court did not hand defense counsel a kill switch for class actions, it did leave open the possibility that defendants can accomplish the same goal by tendering a payment to plaintiffs, rather than merely offering to satisfy their claims fully. How lower courts answer that question remains to be seen.

Read the client alert to learn more about the implications of the Campbell-Ewald decision.

FinCEN AML Action Targets Precious Metals Dealer

On December 30, 2015, the Financial Crimes Enforcement Network (FinCEN) announced its first anti-money laundering (AML) enforcement action against a dealer in precious metals, precious stones, and jewels, write Venable attorneys D. E. (Ed) Wilson, Jr. and Samuel D. Boro in a recent client alert.

The action resulted in a $200,000 civil money penalty against the Los Angeles-based wholesale precious metals business, its owner, and its compliance officer for willfully violating federal AML laws.

This enforcement action, the authors write, is FinCEN's warning shot across the bow to companies – especially retailers – in the jewelry and precious metals industries indicating that they, like any other financial institution, must take AML obligations seriously.

Read the client alert to learn how FinCEN expects companies to assess risks, implement AML programs, and respond to red flags.

Upcoming Events:

Digital Entertainment World

February 9-11 | Los Angeles, CA

DEW is a three-day conference dedicated to the monetization of digital content. The conference will provide a first-class platform for leading intellectual property rights holders from video, music, games, and publishing to access the entire digital value chain of technology and service providers, digital distributors, and device manufacturers, to build the partnerships necessary to create and monetize digital content across all significant platforms. Join Venable Partner Po Yi for a discussion of the Future of Virtual Reality on Wednesday, February 10 at 3:00 p.m. PT.

Electronic Retailing Association's Great Ideas Summit

February 22-24 | Orlando, FL

The Great Ideas Summit brings together the direct-response industry's most influential leaders to hold high-powered meetings, close global deals, and develop new digital marketing strategies. Join Venable partners Randal M. Shaheen and Claudia Lewis for their Masters Series session titled "Matching Claims to the Evidence: Brainstorming with the Experts" on February 23 at 1:30 p.m. ET.

Grocery Manufacturers Association Legal Conference

February 23-25 | Rancho Mirage, CA

The GMA Legal Conference is the preeminent gathering for consumer packaged goods professionals focused exclusively on issues that affect food, beverage, and consumer product manufacturers. Top in-house counsel, defense attorneys, and regulatory experts will cover a wide array of legal topics, with an emphasis on how to protect the company brand from litigation risks and complying with government regulations.