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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.Continue Reading But Wait, There’s More! . . . Litigation: Federal Court Sustains Lanham Act Claims Against Allegedly False “As Seen On TV” Advertising

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.

Continue Reading Insights into the FTC’s Bureau of Consumer Protection

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.Continue Reading Second Circuit Says Multi-State Consumer Class Actions Might Not Be All-Natural

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.Continue Reading #SaferProductsForAll – Global Developments in Product Safety

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.Continue Reading FTC and House Start Working Together to Address CPSC-related Connected Technology Issues – Stakeholders Should Prepare for Future Government-Wide Cooperation

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.Continue Reading The Internet of Things, Product Safety, and Product Liability: A Risky Combination

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.

Continue Reading North American Product Safety Summit: The real deal? That’s up to stakeholders.

kids and laptopsLast week the International Consumer Product Health and Safety Organization (ICPHSO) and ASTM International held a workshop to discuss the recently-updated age determination guidelines from the Consumer Product Safety Commission (CPSC). The age determination guidelines are a resource provided by the Commission to help manufacturers and consumers understand the age ratings on children’s products and toys and to ensure that products are properly labeled. CPSC staff perform age determinations on toy samples to determine the age group for whom the product is commonly recognized. The Commission then devises a categorical list of recommended age ratings. The recommended ratings are used by manufacturers and help determine the type and severity of tests products undergo to detect hazards prior to market release.

The workshop featured remarks from Acting Chairwoman Buerkle as well as other leadership from the Commission and key industry stakeholders. In her opening remarks, Acting Chairwoman Buerkle stressed the importance of receiving comments on the draft guidelines from the public and particularly from those engaged in the marketing and/or manufacture of children’s products and toys. These statements underscore the Chairwoman’s commitment to increasing CPSC’s engagement with the broad stakeholder community.Continue Reading CPSC’s Revision of Age Determination Guidelines: Updates, New Technology, Enforcement, and Possible International Consequences

Over the past few years, class action plaintiffs have filed a slew of lawsuits against online retailers under the New Jersey Truth in Consumer Contract, Warranty and Notice Act (TCCWNA), which prohibits a seller from offering or entering into consumer contracts that contain any term that violates a “clearly established” New Jersey or federal law. Violations are punishable by a maximum civil penalty of $100, actual damages, or both, and private actions can be brought by “aggrieved consumers” (more on that later).

TCCWNA has been around for years, but class action plaintiffs started using the statute to sue online retailers based solely upon their website terms and conditions without suffering any other injury. From what many retailers can tell, the plaintiffs did this by searching for and then challenging indemnification clauses, limitations of liability, and disclaimers of warranties in website terms of use and terms of sale, merely for the purpose of filing lawsuits.Continue Reading New Jersey Truth in Consumer Contract Warranty and Notice Act: New Jersey Supreme Court Holds That Injury Is Required

On April 2, 2018, the Consumer Product Safety Commission (CPSC) announced a $27.25 million civil monetary penalty (CMP) settlement agreement with Polaris for failure to report to CPSC immediately when it became aware of defects in certain models of RZR and Ranger Recreational Off-highway Vehicles (ROVs).

At the same time, CPSC and Polaris jointly announced the recall of more than 100,000 Polaris Model Year 2014 to 2018 RZR XP 1000 ROVs. According to CPSC’s press release, “if the exhaust silencer fatigues and cracks, the heat shield may fail to manage heat, which may lead to melting of nearby components or fire.” This is yet another recall to repair additional models of ROVs for potential fires.

Everyone always says that product safety should be nonpartisan. But as evidenced by CSPC actions, there are often votes on key policy and enforcement actions that fall right down party lines. Recently, some have even suggested that the current Democratic voting majority is heavily influencing enforcement and compliance efforts. Acting Chairwoman Buerkle has, in fact, been the lone holdout in a recent provocative vote. In February, CPSC commissioners voted 3-1 to sue Britax to recall its jogging strollers. Acting Chairwoman Buerkle voted against suing for the recall. Before the Britax case, the last time the CPSC sued for a mandatory recall was in 2012, and thus the Britax case was a surprise to many stakeholders. Moreover, Acting Chairwoman Buerkle is on record as opposing record-high CMP settlements. (See Statement of Commissioner Ann Marie Buerkle on the Commission’s Growing Civil Penalty Settlements.)Continue Reading Is Product Safety a Partisan Issue? CPSC Announces $27.25M Penalty Settlement with Polaris and an Additional Polaris Recall of More than 100,000 ROVs