February 28, 2019

Advertising Law News and Analysis

3 min

Stop the Presses: Third Circuit Limits FTC's Access to Federal Court for Past Conduct

The Federal Trade Commission suffered a significant blow this week. In a decision that many saw coming—bloggers here included—the Third Circuit curtailed authority the FTC has been using for decades to confront allegedly unlawful past conduct. The decision has a direct impact on the ability of the FTC to obtain injunctions against defendants for alleged past misdeeds. In its ruling, write Venable attorneys Len Gordon, Michael Blume, Ellen Berge, Mary Gardner, and Matthew Renick, the Third Circuit held that the FTC can go directly into federal court only where it can allege a defendant is violating or about to violate the law.

FTC Sets Its Sights on Fake Customer Reviews

This week, the FTC went back to basics. It announced a settlement with a marketer of weight loss capsules for, among other things, hiring a third-party review site to create and post fake reviews of its product on Amazon to boost its ratings, and thus sales. This is the first such enforcement action by the FTC, writes Venable attorney Alexandra Megaris, although the New York State AG has brought several such cases challenging similar conduct.

Ninth Circuit Affirms FDA Preemption in Tossing Vitamin E Supplement Case

Last month the Ninth Circuit confirmed that plaintiffs cannot successfully allege that a lawful "structure/function" claim misleadingly implies that a dietary supplement will treat, cure, or prevent a disease under state law, write Venable attorneys Kristen Klesh and Len Gordon. While perhaps it is not surprising that the court reached this conclusion, this recent opinion is worth noting because it is the first time that the court has issued an opinion expressly confirming that lawful structure/function claims will have coverage against California's strong consumer protection laws.

FTC Opts Out of Canning the CAN-SPAM Rule

In June 2017, the FTC initiated a regulatory rule review of the Controlling the Assault of Non-Solicited Pornography and Marketing Rule (CAN-SPAM Rule), seeking information about the Rule's costs and benefits, as well as its economic and regulatory impact. The FTC received 92 responses to its request for public comment, write Venable attorneys Matthew Renick and Ellen Berge. The FTC announced recently that it had completed its review of the Rule and public comments it received, and decided to keep the Rule exactly as it is.

FCC Public Notice Requests Stakeholders to Sound Off on Soundboard Technology

The Federal Communications Commission (FCC) issued a Public Notice seeking comment on a petition for an expedited declaratory ruling relating to how the Telephone Consumer Protection Act (TCPA) applies to the use of soundboard or avatar technology, writes Venable partner Dan Blynn. Specifically, the FCC requests comment on whether "calls using recorded audio clips specifically selected and presented by a human operator in real-time, a tool generally referred to as 'soundboard technology,' do not deliver a 'prerecorded message' under the [TCPA]." Comments are due on March 15, 2019; the reply comment deadline is March 29, 2019.

Who Made the Call? Applying the Fundamentals of Pleadings to TCPA Actions

Twombly and Iqbal—two names that invoke fond memories of the first year of law school for (much) younger attorneys—have long defined the bar that each plaintiff must meet to survive a Rule 12(b)(6) motion to dismiss. The lesson the students are supposed to take away, write Venable attorneys Dan Blynn and Stephen Freeland, is that a complaint must connect the dots between a defendant and the claim. In a recent ruling issued by the Southern District of California, Ewing v. Encor Solar, LLC, the court confirmed that this fundamental requirement applies, unsurprisingly, to TCPA claims against multiple defendants.