comicbook scareScrolling online through the California Business and Professions Code the other day, I was struck by a frightening sight. My pulse raced. My jaw dropped. I called out to an associate for help. I wanted to make sure that what I was seeing was real, i.e., that I wasn’t out of my mind. Many lawyers have read California Business and Professions Code Section 16600 by which California outlaws covenants not to compete. But click a few code sections over and you’ll be shocked!

Section 16603 has to be one of the strangest (and most seasonally appropriate) laws ever. It targets the two-for-one sale of comic books, stating: “Every person who, as a condition to a sale or consignment of any magazine, book, or other publication requires that the purchaser or consignee purchase or receive for sale any horror comic book, is guilty of a misdemeanor” punishable by jail time up to six months or a fine up to $1000. The section goes on to define a horror comic book with specificity:Continue Reading Creepy Code Section Alert: Cal. Bus. and Prof. §16603

financial lawMany time-strapped consumers count on household subscription services to simplify life. One quick purchase agreement with automatically renewing payments, and consumers can receive uninterrupted access to the latest streaming shows, months of lifestyle subscription boxes, or online cloud storage to back up all the family vacation photos. But sometimes consumers aren’t clear on how to unsubscribe or exactly what price they’ll pay after a discounted or free trial period. Thus, many states are enacting or updating their Automatic Renewal Laws (“ARLs”) to ensure consumer protection.

On the heels of increased class action filings under California’s current ARL (see e.g., Kruger v. Hulu; Wahl v. Yahoo! Inc.), the state continues to tighten the reins on automatic renewals and continuous service providers with newly enacted Senate Bill 313. California’s expiring ARL was enacted in 2010. It requires auto-renewing consumer contracts to clearly and conspicuously disclose terms, obtain affirmative consumer consent before imposing a charge, and provide an acknowledgment that contains the terms, the cancellation policy, and a simple cancellation method. California’s 2010 ARL was already broader and more specific than the federal Restore Online Shoppers’ Confidence Act, commonly known as ROSCA and enforced by the FTC. (Read more about ROSCA here.)Continue Reading California Tightens Auto-Renewal Requirements

Last week, Senators Al Franken (D-Minn) and Hank Johnson (D-Ga) revived the Arbitration Fairness Act (“Act”), which would ban arbitration provisions in consumer contracts, as well as employment, antitrust, and civil rights cases, and only allow the parties to agree to arbitration after the dispute arises.  The newfound interest in the Act demonstrates renewed opposition to arbitration as an alternative to litigation.

If passed, the Act would have a clear impact on marketers’ ability to avoid class actions and limit their liability in contracts with consumers.  Online marketers often implement binding arbitration provisions to reduce their exposure to class action lawsuits brought by consumers.  But the proposed Act would ban those provisions and only allow the parties to agree to arbitration after the dispute arises. 
Continue Reading Arbitrate-Shun: Congress’s Proposed Attack on Arbitration Clauses

A recent Federal Trade Commission (“FTC”) settlement with debt buyer Asset Acceptance Capital Corp. is the latest of several actions against companies that profit from consumers in financial distress.  The settlement illustrates the type of pro-consumer disclosures we expect the FTC to demand in connection with investigations and enforcement actions going forward.  We also expect