All About Advertising Law

Regulatory & Litigation Developments for Advertisers and Marketers

Digital Media Link, May 2017 – A Focus on Augmented and Virtual Reality

By Po Yi, Kimberly Culp, Tamany Bentz, Shannon Yavorsky, Andrew E. Bigart, Evan Minsberg and Michael S. Isselin on May 26, 2017

In the most recent edition of Digital Media Link, we explore the legal issues surrounding new technologies, with a particular focus on augmented and virtual reality. As we have seen time and again, new technologies do not necessarily mean new statutes or case law, which usually are slow to catch up. What is a lawyer to do, then, when advising on the legal issues associated with these new technologies? We do what we were trained to do – apply the existing rules and precedents to the best of our ability, use our knowledge of the technology and these laws to project how the law will develop, and track developments as they occur. Virtual reality and augmented reality remain so new – at least from the perspective of legal jurisprudence – that we are still in the stage of applying established rules and precedents to these up and coming technologies. In the articles that follow, we take a look at several different legal issues related to these new technologies.

Please click here to read the full issue.

How Many Calls Does it Take to Get to the Center of a TCPA Claim?

By Stephen R. Freeland on May 25, 2017

The answer is that it may depend on where your case is filed. Some courts have said one may be enough. But, according to two recent decisions from New Jersey, one is not enough (sometimes) and neither is three, at least under the factual scenarios alleged in those cases.

In Zemel v. CSC Holdings LLC, the District of New Jersey held that three text messages allegedly sent to the plaintiff using an autodialer without his prior express consent were insufficient to establish standing under the Telephone Consumer Protection Act (TCPA). There, defendant allegedly sent plaintiff an autodialed text message indicating that his mobile number was recently added to a particular service and inviting plaintiff to “Send STOP to opt out, HELP for info.” Plaintiff initially responded “Help” and received a response directing him to visit the defendant’s website for information. Plaintiff, thereafter, texted “Stop,” and received a response asking him to identify the type of messages – service alerts or appointment alerts – that he no longer wished to receive. Plaintiff alleged that these three text messages violated the TCPA and caused him to suffer “actual harm, including aggravation, nuisance, and invasion of privacy that necessarily accompanies the receipt of unsolicited text messages.”

Spinning Gold Into Straw: FTC Obtains a Court Order Requiring the Sale of Defendant’s Home

By Leonard Gordon on May 24, 2017

gold bars Some marketers move to Florida believing that the state’s constitutional Homestead Act protects their house from the Federal Trade Commission’s (FTC) grasp. A recent case shows that the FTC may not share that belief, and a federal judge recently agreed with the FTC.

Sam J. Goldman tried looking for gold, but it didn’t pan out. In 2011, the FTC charged Goldman and others with violating the FTC Act and the FTC’s Telemarketing Sales Rule in connection with selling precious metal investments. Specifically, the FTC alleged that the defendants promoted a bogus investment scheme that conned consumers into buying precious metals on credit without clearly disclosing significant costs and risks. Subsequently, at the FTC’s request, a federal judge ordered a stop to the defendants’ deceptive practices, froze the defendants’ assets, and appointed a receiver to oversee the business. In 2012, the defendants agreed to a $24 million settlement with the FTC to resolve the matter. The judgement was not suspended. So the FTC sought to collect on same.

Consumer Financial Services Practice Digest

By Andrew Arculin, Allyson Baker, Jonathan Pompan, John Banghart, Alexandra Megaris, Jami Vibbert, Peter Frechette, Andrew Hernacki, Evan Minsberg, Katherine Lamberth and Jennifer Talbert on May 19, 2017

cash and credit cards A circuit split regarding the SEC’s administrative law judges, an internal CFPB playbook and memo on their examination process, and a recent field hearing on small business lending are at the forefront of the May 18 edition of Venable’s Consumer Financial Services Digest.

In this issue, we highlight the circuit split between the Tenth Circuit and the D.C. Circuit regarding the status and appointment of the SEC’s administrative law judges.

We take a look at the CFPB’s Examination Playbook, revealing how key decisions are made throughout the examination process.

We provide an analysis on the CFPB’s field hearing on small business lending, including its goal to create a small businesses financing project.

We discuss how to minimize your risks following the recent ransomware cyberattacks.

Continue reading to review the Digest. You will also find a list of upcoming industry events you may be interested in attending.

Ransomware Cyberattacks: How to Minimize Your Risks

By John Banghart and Jami Vibbert on May 18, 2017

On Friday, an unprecedented cyberattack affected a large number of Microsoft Windows-based computers through a type of malware known as ransomware. Although ransomware has been increasingly prevalent over the last few years, this particular version, called “WannaCry,” spread quickly and widely around the world. Many believe that the cyberattack will continue.

Ransomware is generally spread via email messages that contain infected attachments. When a user opens the attachment, a program runs that encrypts the user’s computer and demands a ransom be paid, typically in bitcoin, for a key that will unencrypt the files. In this case, the attackers are asking for between $300 and $600 to unlock the files.

Consumer Finance Enforcement Activity in a New Administration

By Allyson Baker, Meredith Boylan and Katie Wright on May 10, 2017

Members of Venable’s Consumer Financial Services Practice, along with Paula-Rose Stark, a former attorney at the CFPB, now with Chain Bridge Partners, LLC, ‎recently discussed the current and evolving state of federal and state consumer financial protection law and policy. They outlined what you and your company need to know about what’s ahead and shared their experiences from the front lines, offering insights and strategies to help companies navigate the evolving legal and political landscape.

Topics included:

The impact of the current political climate on enforcement actions;
Interacting, negotiating, and litigating with the CFPB;
Tips for managing risk due to enforcement investigations and actions;
Crisis management strategies;
New administration: prospects for reform and leadership changes;
Examination: lessons learned and preparing for the future; and
CFPB, State Attorneys General, and other enforcement agency developments, and what’s next.

Even Former Judges Can Be Exposed to False Advertising Liability

By Kevin Weigand on May 5, 2017

You think judges are immune to lawsuits? Think again, especially if you are a retired judge seeking to resolve disputes in the private alternative dispute resolution (ADR) business.

A San Diego jury is being asked to decide whether former California Court of Appeal Justice Sheila Sonenshine and ADR powerhouse JAMS, Inc. are liable for false advertising based on representations touting Sonenshine’s experience on JAMS’s website.

Kevin Kinsella, the plaintiff in the case, hired JAMS and Sonenshine to serve as a privately compensated temporary judge in his divorce dispute. Kinsella is a venture capitalist who had a number of profitable business ventures prior to his marriage and claims that he agreed to his now ex-wife’s request to hire Sonenshine because he wanted a judge with expertise in dissolution actions and business matters. Kinsella says that he reviewed JAMS’s website to evaluate Sonenshine’s experience in business, including investment banking, financial markets, business ventures, and private equity funding, but learned too late that Sonenshine’s biography was misleading.

To Be or Not to Be . . . a Call?: Petition Before the FCC Would Clarify Whether a Ringless Voicemail is a Call

By Daniel S. Blynn and Christopher Boone on May 3, 2017

On March 31, 2017, All About the Message LLC (AATM), filed a petition for a declaratory ruling before the Federal Communications Commission (FCC), requesting that the FCC issue a rule that would declare that delivering a voice message directly into a consumer’s voicemail box does not constitute a “call” that is subject to the Telephone Consumer Protection Act’s (TCPA) general prohibition on the use of auto-dialers or pre-recorded voice messages (absent appropriate consent). AATM’s petition follows a similar FCC petition filed by VoAPPs, Inc. on July 31, 2014. There, VoAPPs argued that leaving a voice message directly into the consumer’s mailbox does not constitute a “call” subject to the TCPA because such a message does not cause the type of disruption that the TCPA was enacted to curtail. The FCC has not yet resolved VoAPPs’ 2014 petition.

If the FCC declares that ringless voicemail technology is not a “call” under the TCPA, it may open a new marketing avenue for creative telemarketers. The FCC has issued a public notice seeking comments by May 18, 2017.

We continue to monitor this subject closely and developments in TCPA litigation generally. Please see this list of recent TCPA actions.

Marijuana Advertising Sparks Legal Questions

By Randy Shaheen on May 2, 2017

As of this last election, eight states and our very own District of Columbia have legalized or decriminalized recreational marijuana consumption. The rest of the states have either passed laws only legalizing medical marijuana consumption or marijuana consumption continues to be unlawful. Similarly, marijuana use continues to be illegal at the federal level (so. if you’re in DC. don’t light up on federal property.) However, it seems likely that the number of states decriminalizing marijuana will continue to grow. There are, of course, a whole host of legal issues surrounding the legalization of marijuana, many of which have probably not yet been fully fleshed and thought out. However, since this is an advertising blog, we were curious to see to what extent states have already begun to regulate the advertising of legal marijuana. Somewhat to our surprise, many of the states where marijuana is legal have fashioned some rules around its advertising. In many cases, these rules are similar to those that have been fashioned around the sale of other adult products such as alcohol and tobacco.

NY AG Doesn’t Miss a Beat, Settles Three Cases with Mobile Health App Developers

By Brian Tengel and Randy Shaheen on May 1, 2017

heartbeat As we have written before, mobile apps geared toward health and fitness have become increasingly popular—and an increasingly popular target for regulators. This makes sense. Health and fitness apps can pose a serious risk if consumers rely on them for personal health information that turns out to be inaccurate or misleading. And the risk goes both ways—an app can provide false reassurance that you’re perfectly healthy when you should really be seeing a doctor, or it can prompt you to seek unnecessary medical attention for a medical issue that’s not an issue at all.

It perhaps comes as little surprise, then, that an app that claims to accurately measure your heart rate—a pretty important indicator of health, you could say—would draw the scrutiny of a State AG.

The New York Attorney General in late March announced settlements with three mobile health app developers that allegedly made misleading and deceptive claims about their apps’ ability to accurately measure heart rates and monitor and play fetal heartbeats. Notably, the settlements also included allegations that the developers maintained inadequate privacy policies that failed to inform consumers about the scope of the developers’ data collection and storage practices. These settlements brought to a close the New York AG’s yearlong investigation into the app developers.