Last week, the Federal Trade Commission (FTC) announced a $1.76 million settlement with Truly Organic, Inc. and its founder and CEO Maxx Harley Appelman regarding false “organic” claims. This is the first time the FTC has obtained monetary relief for deceptive “organic” claims, and the buzz around this settlement signals it may not be the last. The Commissioners’ vote was unanimous, and Commissioner Rohit Chopra released a statement in support of the settlement calling for the FTC to issue a Policy Statement setting forth the Commission’s approach to enforcement in cases involving dishonesty or fraud.

Truly Organic is a bath and beauty retailer that makes and sells a variety of personal care products, including hair care products, body washes, lotions, baby products, and cleaning products. As the brand name suggests, Truly Organic markets its products as wholly organic or certified organic in compliance with the United States Department of Agriculture’s (USDA’s) National Organic Program (NOP), the program that enforces national standards for organically produced agricultural products. Truly Organic conveyed the organic theme through a variety of claims, including “100% organic,” “truly organic,” “certified organic,” and “USDA certified organic.” The company also claimed its products were “vegan.”


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Dollar General, Dollar Tree and Family Dollar will pay $1.2 million in fines and restitution to the New York Attorney General to resolve allegations that they routinely sold expired medicines and failed to comply with New York’s bottle deposit law. The bulk of the penalty – $1.1 million – will be paid by Dollar General, which is accused of selling two types of motor oil that have been obsolete for almost 30 and 90 years, respectively.

Investigators began secretly shopping at the discount chains in March 2016, inspecting shelves for expired products. At stores throughout the state of New York, they found over-the-counter medicines for sale months past their expiration dates. At Dollar General stores, they also found at least two types of store-brand motor oil that is not suitable for most modern car engines. One type of motor oil has been obsolete since 1988, and the other since 1930. These motor oils were placed on store shelves next to, and used packaging with the same or similar descriptors as, brand-name motor oils that are suitable for modern engines. There were no signs or other indicators to warn customers that they should be used only on antique vehicles.


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Bimbo Bakeries and U.S. Bakery recently found out that consumer confusion, like politics, is local, and that “local” means what the local consumer says it means. Let’s unbraid this loaf.

In Bimbo Bakeries USA, Inc. v. Sycamore, No. 2:13-CV-00749, 2019 WL 1058234 (D. Utah Mar. 5, 2019), the jury originally awarded Bimbo $8,027,720 in damages on its false advertising claim against U.S. Bakery, which tried multiple times to convince the court that what makes bread “local” is really a matter of the seller’s opinion, or at least that claiming bread is “local” is mere puffery. According to U.S. Bakery, “local” is a geographical term, but not a geographically descriptive term entitled to Lanham Act protection, because “local” is not a specified location.


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Many retailers carry products with the phrase “As Seen on TV.” What if a product bearing that phrase, however, had not actually been seen on TV? A recent case in federal court in the Southern District of New York ponders that question.

In an advertising war between copper cookware competitors, plaintiff Emson sued its competitor Masterpan under the Lanham Act challenging claims made for the “The Original Copper Pan” (“OCP”). These claims included Masterpan’s use of the “As Seen On TV” logo; that the OCP was “original;” and that the OCP was “copper-infused,” “made of ultra-tough copper,” and made with “copper construction.” Emson alleged, among other things, that: (a) Masterpan falsely represented the OCP with its “As Seen On TV” label; (b) Masterpan’s “original” advertising deceived the public into believing that the OCP was the first copper pan of its kind; and (c) Masterpan mischaracterized the amount of copper in the OCP. Emson contended that these false claims diverted sales from Emson’s own “Gotham Steel” products, traded off its goodwill, and deceived consumers. Masterpan moved to dismiss Emson’s claims for lack of personal jurisdiction, improper venue, and failure to state a claim.


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The Federal Trade Commission (FTC) plays a significant role in regulating consumer financial services providers and vendors, including advertisers and marketers. A recent webinar from the Consumer Financial Services Committee of the American Bar Association featured an interview with Andrew Smith, director of the FTC’s Bureau of Consumer Protection (BCP). Mr. Smith, who was confirmed in May 2018, shared his personal views of his role at the FTC, the FTC’s development, and enforcement trends and focus in the consumer financial services sector. Below we highlight the main areas of focus that Mr. Smith touched upon that in our view are relevant to the consumer financial services sector.

Because of the nature of the webinar, this summary is not intended to be a complete transcript, does not reflect the views of the FTC, and does not necessarily reflect the views of Mr. Smith or any individual at the FTC.


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Consumer class actions predicated on state laws alleging deceptive claims are one of the scourges of modern marketing. In a recent decision, the Second Circuit laid out some important guidance on whether and how putative class actions based on laws of different states can move forward.

In Langan v. Johnson & Johnson Consumer Companies, Inc., Langan, a Connecticut resident, sued J&J for violating the Connecticut Unfair Trade Practices Act (CUTPA), alleging that two Aveeno Baby washes were deceptively marketed as containing “natural oat formula” when they allegedly only contained 1% natural ingredients. Langan sought class certification on behalf of Connecticut consumers and consumers in 17 other states who purchased the two baby washes under those states’ “mini-FTC Acts”.

A Connecticut federal district judge certified a class of consumers who had purchased the products in 18 states—rejecting J&J’s arguments that the Plaintiff lacked Article III standing to bring a class action under multiple state laws and that the state consumer protection laws were too varied to satisfy the predominance requirement of Rule 23.


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On June 25, 2018, four major online retailers, Alibaba (for AliExpress), Amazon, eBay, Rakuten-France, and the European Commission signed a Product Safety Pledge to remove dangerous products in which they committed to the following for the benefit of European consumer safety:

  • “React within two working days to authorities’ notices made to the companies’ contact points to remove listings offering unsafe products. Companies should follow up and inform the authorities on the action taken.
  • Provide a clear way for customers to notify dangerous product listings. Such notices are treated expeditiously and appropriate response is given within five working days.
  • Consult information on recalled/dangerous products available on the EU Rapid Alert System for dangerous non-food products and also from other sources, such as from enforcement authorities and take appropriate action with respect to the products concerned, when they can be identified.
  • Provide specific single contact points for EU Member State authorities for the notifications on dangerous products and for the facilitation of communication on product safety issues.
  • Take measures aimed at preventing the reappearance of dangerous product listings already removed.
  • Provide information/training to sellers on compliance with EU product safety legislation, require sellers to comply with the law, and provide sellers with the link to the list of EU product safety legislation.”

See the full European Commission press release here.


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Internet connected devicesRobust conversations about IoT, smart technology, and product safety continue across the federal government. On May 16, 2018, the Consumer Product Safety Commission (CPSC) held a public hearing on the Internet of Things (IoT) and consumer product hazards. (See previous related blog posts here and here about the hearing.)

On June 13, the House Energy and Commerce Committee’s Subcommittee on Digital Commerce and Consumer Protection (SDCCP) voted to send H.R. 6032, the State of Modern Application, Research, and Trends of IoT Act (SMART IoT Act), to the full committee for consideration. The SMART IoT Act directs the Secretary of Commerce to conduct a study on the state of the internet-connected devices industry and is authored by SDCCP Chairman Latta and Rep. Peter Welch. It will be interesting to see whether or how quickly the SMART IoT Act actually becomes a law. Smart IoT technology is one of the hottest topics these days other than blockchain and bitcoin. Many different stakeholders have vested interests in how the government chooses to engage on this issue. The SMART IoT Act is a first step for Congress to actively engage and survey the federal government on this issue.


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Internet connected devicesOn May 16, 2018, the Consumer Product Safety Commission held a public hearing to receive testimony on the Internet of Things (IoT) and issues related to product safety (IoT Hearing). Thirteen diverse stakeholders presented at the IoT Hearing. Of the thirteen presenters, there were three representatives of consumer organizations, one academic, one security expert and researcher, one representative from a testing lab coalition, one representative from a testing and voluntary consensus standards organization, two representatives from international interests, and three representatives from industry trade associations or coalitions. While each presenter had his/her own agenda, there was some agreement: There are potential significant safety, privacy, and product liability issues associated with emerging IoT technologies. At the hearing, the CPSC learned there are currently 8.4 BILLION connected things, and 5 BILLION consumer applications—numbers allegedly on track to double by the year 2020.

How can the CPSC address the related safety issues?

The consumer activists described the situation as “urgent” and pressed the Commissioners to provide a certification process for IoT devices and stronger mandatory regulations for manufacturers that incorporate software technologies into their products. The industry trade associations/coalitions advocated for a voluntary consensus-based, industry-led approach—which they have already started to address. They argued that their approach would be the most cost-efficient and efficient way to implement the most up-to-date technologies to address the growing problem.


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In February 2018, at the International Consumer Product Health and Safety Organization’s (ICPHSO) Annual Meeting, the U.S. Consumer Product Safety Commission (CPSC), the Department of Health of Canada (Health Canada), and the Consumer Protection Federal Agency of the United Mexican States (PROFECO) signed a trilateral Memorandum of Understanding (MOU) committing to increasing cross-border cooperation. The MOU was “intended to memorialize cooperative efforts already underway, as well as to facilitate future joint activities,” all with the goal of advancing the flow of consumer products throughout North America.

As a follow-up to the MOU signing at ICPHSO, the CPSC hosted the 4th North America Consumer Product Safety Summit (Summit) on May 3 and 4, 2018, at CSPC headquarters in Bethesda. Previous summits were held in 2011 at the CPSC, 2013 in Ottawa, and 2015 in Mexico. The goal of the 2018 Summit was to build on the momentum of trilateral cooperation among the three product safety regulators. On May 3, closed-door meetings were held between the government representatives of the three nations, while the meetings on May 4 were open to the public. The May 4th public Agenda included sessions on: North American regulatory cooperation; e-commerce challenges and opportunities; updates on high-energy Lithium-Ion battery hazards and risks; and a final panel soliciting feedback from North American stakeholders. Presenters included: various representatives from the CPSC, Health Canada and PROFECO, as well as industry representatives.


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