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Since July 1, when California’s “Honest Pricing Law” or “Hidden Fees Statute” became effective, the plaintiffs’ bar has filed more than a dozen complaints alleging violations of the statute. These complaints challenge alleged “junk fees” or “drip pricing” structures, including “service fees” charged by merchants through their websites, “processing fees” charged by third-party platforms, and various forms of credit card surcharges and debit card fees.

Background

California’s Honest Pricing Law requires “Total Price” disclosures and prohibits merchants from misrepresenting the nature and purpose of any charges or fees. Under the statute, “Total Price” means that the advertised prices of goods and services must include all mandatory charges and fees other than either government-imposed taxes or fees or postage or carriage charges “reasonably or actually incurred” to ship the physical good to the consumer.Continue Reading A Variety of Fees and Surcharges Implicated in Early Cases Enforcing California’s Honest Pricing Law

This week, California amended its automatic renewal and continuous service offer law (ARL). Key provisions include the addition of “free-to-pay conversions,” consent obligations, misrepresentation prohibitions, request for cancellation procedures, price change notifications, and reminder and recordkeeping requirements. The new law takes effect July 1, 2025.

Express Affirmative Consent Required

The law will require “express affirmative consent” for all automatic renewal and continuous service offers. While the ARL provides no definition, class action plaintiffs’ attorneys, the California attorney general (AG), and California’s Automatic Renewal Taskforce (CART) are likely to interpret it similarly to the Federal Trade Commission’s (FTC) definition of “affirmative express consent,” i.e., “freely given, specific, informed, and unambiguous indication of an individual consumer’s wishes demonstrating agreement by the individual, such as by an affirmative action, following a clear and conspicuous disclosure to the individual.”Continue Reading California Amends Autorenewal Law, with Stricter Consent Requirements and a “One Save” Rule: Fast VAST Update

Not to be left behind by other regulators, the California Privacy Protection Agency (CPPA) recently issued an enforcement advisory on “dark patterns” in the context of the notice and consent required under the California Consumer Privacy Act (CCPA). As we’ve previously discussed, dark patterns are a subset of “deceptive marketing” and are also known as “deceptive design patterns.” The Federal Trade Commission (FTC) released a report in 2022 outlining the various methods companies employ, such as “making it difficult for consumers to cancel subscriptions or charges, burying key terms or junk fees, and tricking consumers into sharing their data.”

The scrutiny of dark patterns has only intensified since then, and states like California are jumping in. The CCPA defines dark patterns as “[u]ser interfaces or choice architectures that have the substantial effect of subverting or impairing a consumer’s autonomy, decision making, or choice” and says consumer agreement obtained through dark patterns does not constitute consent. The CPPA advises companies seeking to obtain consumer information to use language that is easy to understand and to avoid technical or legal jargon.Continue Reading California Privacy Protection Agency Warns Businesses Against “Dark Patterns” and Urges “Symmetry in Choice”

Late last week, the California attorney general released Frequently Asked Questions regarding California’s “Honest Pricing Law” or “Hidden Fees Statute,” which will take effect July 1, 2024. The law is anticipated to have a sizeable impact, given its breadth, and will vastly change how businesses disclose the price of their goods and services to the public. When “advertising, displaying, or offering” a price, the law requires businesses to include all required fees and charges other than certain government taxes and shipping costs.

The Advertised Price Is a Single Price, No Exceptions

The FAQs make clear that the intent of the law is to force businesses to display a single price that includes all required fees and charges that a consumer would pay at the end of the transaction. This is similar to the Federal Trade Commission’s Proposed Rule that businesses display the “Total Price” for goods and services.Continue Reading California Releases FAQs on Complying with Impending Drip Pricing Law

The first rule of comparative advertising has always been that you can say pretty much whatever you want so long as you don’t lie.  But there is a new wrinkle—don’t threaten or stalk the competition.  A recent Ninth Circuit decision in Thunder Studios v. Kazal, has shed new light on the extent of protection afforded by the First Amendment to reprehensible and confrontational speech.  The case is quirky in that the individuals protected by the First Amendment were not US Citizens and were not themselves in the US when the “protests” occurred, but the case is a cautionary tale as to the limits of First Amendment protection of comparative claims.  Importantly, however, the case cannot—and should not—be read to provide for an open invitation for competitors to promote or otherwise engage in extraterritorial smear campaigns with impunity.  Indeed, there is nothing in the Ninth Circuit’s opinion to suggest that it should be read to preclude or immunize parties from claims of defamation, product disparagement, or even invasion of privacy torts arising out of similar behavior.  Nor would it likely protect a party from liability from organizing a secondary boycott.  The case is pending en banc review by the Ninth Circuit so stay tuned.

Following the souring of a multimillion-dollar business deal between Australian citizens Roderick David, on the one side and Charif Kazal, Adam Kazal, and Tony Kazal on the other, the Kazals undertook an international campaign to inform the citizens of Los Angeles, California about the “despicable crimes” allegedly committed by David (then a resident of Los Angeles).  The Kazals sent hundreds of emails to David and his employees, hired protesters to picket and distribute flyers near his residence and business—Thunder Studios Inc., in Los Angeles—and had vans emblazoned with their message driven around the city.  Leaflets and signs held by protesters described David as a “corporate thief” and a “fraudster” who “robbed his business partners of $180 million.”Continue Reading Sticks and Stones May Break Your Competitor, But Protests May Be Protected

On June 17, 2020, the Ninth Circuit Court of Appeals issued a published opinion affirming the dismissal of a consumer class action seeking $32,000,000 against Venable client Premier Nutrition Corporation. The Court held that federal equitable principles must apply to class actions pending in federal court, even where state law rules the underlying causes of action. See Sonner v. Premier Nutrition Corp., No. 18-15890, 2020 WL 3263043 (9th Cir. June 17, 2020).

Plaintiff-Appellant Kathleen Sonner sued Premier on behalf of a class of California consumers claiming that Premier’s product, Joint Juice, did not provide its advertised joint health benefits. Sonner sought damages, restitution, and injunctive relief under the Consumer Legal Remedies Act (CLRA), as well as restitution and injunctive relief under California’s Unfair Competition Law (UCL).Continue Reading Ninth Circuit Blocks Class Plaintiffs’ Efforts to End Run Jury Trial

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 (“UCL”) and the false advertising law (“FAL”)—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.

In Nationwide Biweekly Administration Inc. v. Superior Court, the district attorneys of four counties filed a complaint alleging that mortgage servicer Nationwide Biweekly, its subsidiary and its owner (collectively, “Nationwide”) had violated the UCL and FAL through false and misleading advertising practices and operating without a license, among other allegations. The government sought an injunction, restitution of all money wrongfully acquired by Nationwide from California consumers and civil penalties of up to $2,500 for each violation found.Continue Reading California High Court Holds No Right to Jury Trial for False Advertising and Unfair Competition Claims in State Court

The advertised-discount provision of California’s False Advertising Law, California Business and Professions Code § 17501, lives to fight another day. A coalition of national department stores, having found themselves brought together by the regulatory lasso of the Los Angeles City Attorney, recently took a big swing at the validity of that statute by objecting to its constitutionality on vagueness and free-speech grounds. The stores’ argument connected with the district court, but was ultimately thrown out by the California Court of Appeals.

The statute at issue is undoubtedly wonky:

For the purpose of this article the worth or value of any thing advertised is the prevailing market price, wholesale if the offer is at wholesale, retail if the offer is at retail, at the time of publication of such advertisement in the locality wherein the advertisement is published.

No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement.

Continue Reading California Advertised-Discount Law Safe—For Now

Thought that the FTC and California planned to cool off on enforcing trial and subscription programs? Think again. The FTC and California continue to bring these actions with alarming regularity.

For those of you who haven’t been tracking these issues, last year California’s Automatic Renewal Law was amended to tighten the restrictions on continuity programs. The amendments increased restrictions on companies providing trial or discounted introductory programs, and required companies to provide an “exclusively online” cancellation mechanism for consumers who originally accepted the service agreement online.

In addition, both the FTC and the California Autorenewal Task Force (a team of district attorneys who enforce the statute) have brought multiple challenges against companies offering continuity programs. We wrote a few weeks ago about the FTC’s settlement with Urthbox, which included charges challenging how that company’s free trial and subscription offerings were disclosed.Continue Reading Updates in FTC and California’s Continuing Enforcement of Continuity Programs