Automatic Renewal Programs: Reducing Risks During the COVID-19 Pandemic
Although the coronavirus pandemic has impacted every business over the past few weeks, companies offering negative option and subscription programs face a unique set of issues. On the one hand, the subscription model offers consumers benefits that are difficult to provide outside of this context (such as streaming services, online learning programs, and uninterrupted access). On the other hand, business interruptions — in addition to consumers tightening their budgets — have presented significant hurdles to the subscription model during the current pandemic.
"USA, USA, USA…" – Recent Updates on "Made in USA" Claims
Country of origin claims in advertising, particularly "Made in USA," have been around for a long time — many companies want to showcase products that have been made in the United States by marking them with the phrase or using the Stars and Stripes in advertising. Before making claims like "Made in America" or "Built in the USA," though, sellers must understand the strict federal and state laws and standards for making such claims. In September 2019, the Federal Trade Commission held a public workshop "to consider 'Made in USA'" and other types of U.S.-origin claims and specifically sought comments from the public on whether it should update its "Made in USA" Enforcement Policy.
California High Court Holds No Right to Jury Trial for False Advertising and Unfair Competition Claims in State Court
The California Supreme Court has held that causes of action under two of the state’s most prominent consumer protection statutes — the unfair competition law and the false advertising law — are to be tried by the court rather than a jury. In doing so, the court affirmed decades of California Court of Appeal precedent and overturned a lower court’s ruling that a jury trial is required when civil penalties are sought in state court.
Barr v. AAPC Oral Argument: Will SCOTUS Flush the TCPA Down the Toilet?
On Wednesday, May 6, 2020, the Supreme Court heard oral arguments in Barr v. American Association of Political Consultants, Inc., a case that will answer whether the government debt exception to the Telephone Consumer Protection Act (TCPA), which allows for government-backed debt collection calls to be placed to cell phones via autodialer without the prior express consent of the debtor, is unconstitutional under the First Amendment. If the answer is yes, then the Court will also decide whether the Exception — passed in 2015 — is severable from the rest of the TCPA — passed in 1991. A toilet flushing was heard during Justice Kagan's questioning of AAPC's counsel — not figuratively, but literally. Does this flushing foreshadow the fate of the TCPA? We likely will see in the next few months, when a decision is expected.
FTC Files Lawsuit Against Company Selling CBD Products, Claiming to Prevent or Treat COVID-19 and Cancer
Recently, the FTC filed its first lawsuit involving COVID-19 disease claims, but the Commission took an approach it had largely abandoned in consumer protection cases, by filing for a temporary restraining order and preliminary injunction in federal court and simultaneously filing an administrative action. Although COVID-19 claims are new, the procedural approach taken by the FTC is one that it has not used in years.
Make No Bones About It: NAD Finds Petco Is "Setting a Bold New Standard for Nutrition" but Recommends "No Artificials" and "Better Nutrition" Claims Should Be Discontinued
Recently the National Advertising Division (NAD), as part of its routine monitoring program, evaluated whether certain claims made by Petco Animal Supplies, Inc. (Petco) in marketing and advertising materials for its "no artificial ingredients" advertising campaign were adequately substantiated. The NAD determined that Petco presented sufficient evidence to demonstrate that it is "setting a bold new standard for nutrition" and that it "will continue to evaluate and evolve [its] standards and assortment to take pet nutrition to new levels." However, it recommended that Petco modify certain claims that it was removing "all" artificial ingredients or that there would be "no more artificials" in any of the pet food or treats it carries. The case provides some important guidance on the rules for making claims regarding "no artificial ingredients."