Chairwoman Khan Driving the Omnibus
Since the appointment of Chairwoman Khan to the FTC this past summer, the three Democratic commissioners have pushed through 15 omnibus resolutions authorizing staff to use compulsory processes without additional approval from the Commission. Although the use of blanket authorizations is old hat at the FTC, the practice remains controversial because it allows staff to issue civil investigative demands (CIDs) and subpoenas to companies and individuals without consulting with the Commission, as long as the investigation ostensibly relates to an existing omnibus resolution and one commissioner signs off. This gives staff extraordinary latitude and discretion, especially considering the sweeping nature of the resolutions.
Ninth Circuit Clarifies Standards for Equitable Damages in False Advertising Cases
A recent decision in the Ninth Circuit sheds new light on whether, and the standard by which, a false advertising claimant must prove equitable damages under the Lanham Act. In Grasshopper House, LLC v. Clean & Sober Media, LLC, the Plaintiff obtained a jury verdict finding the Defendants liable for false advertising. But the district court cancelled the damages phase of the jury trial after the exclusion of Plaintiff's damages expert, which the court reasoned was Plaintiff's only evidence concerning actual losses as a result of Defendants' misrepresentations. Therefore, the district court held a bench trial concerning equitable relief, where it entered a permanent injunction against Defendants' false advertising, but denied Plaintiff's requests for disgorgement of profits, attorneys' fees, and costs.
FTC Put to the Test on Inadequate Testing Claims
On July 22, 2021, the Third Circuit ruled against the FTC in its case against Innovative Designs, a company that manufactures and sells a product called Insultex House Wrap, a weather-resistant barrier used in building construction. As we discussed last year, the FTC has targeted companies that produce insulation or building materials and make claims that these materials have more insulating power than they actually do. The court's rejection of the FTC's view on what constitutes reliable testing for purposes of substantiation underscores that courts often are more flexible than the FTC in determining whether an advertiser has a reasonable basis for a claim.
To Call, or Not to Call, in Louisiana During a State of Emergency: That Is the Question
Recently, the Louisiana Public Service Commission declared a state of emergency and announced, pursuant to its Do Not Call Program General Order, in no unclear terms, that "NO telephonic solicitor shall engage in ANY form of telephonic solicitation" is permitted during the state of emergency (at least while the Office of Homeland Security and Emergency Preparedness requires the PSC to report to the Emergency Operations Center). The PSC is not kidding around about this, as the emphasis in the announcement is its own.