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With tariffs creating an atmosphere where “imported” may soon come to mean “expensive,” American businesses might be tempted to use their advertising and packaging to emphasize the American origin of their product, no matter how little of the product originates in the USA. But, considering the regulations in place and the recent attention to challenges for false advertising, it’s a good time to review the rules for making Made in the USA claims. A recent jury verdict shows the potential consequences a company may suffer for not following the rules.

Earlier this month, a California jury found a popular tea company, R. C. Bigelow, liable for damages of $2.36 million in a class action lawsuit challenging the company’s Made in the USA claim. The plaintiffs relied on the standard set forth in the Federal Trade Commission’s (FTC) Made in USA labeling rule to show that Bigelow had violated the California Consumers Legal Remedies Act (CLRA), which makes it unlawful to misrepresent the “source, sponsorship, approval, or certification of goods or services.”Continue Reading Tariffs May Encourage Made in the USA Claims, but You Need to Be Careful

The Trump administration transformed global trade policies by implementing a series of sweeping tariffs. Advertisers should ask the following questions.

1. How can I comply with pricing and transparency laws when my costs increase?

    Tariffs are typically calculated as a percentage of a product’s value, paid by importers, and collected by U.S. Customs and Border Protection (CBP). Although Trump now imposes a 10% across the board tariff on most countries, China’s total tariff rates can now exceed 145%. Because tariffs often increase the landed cost of imported products, companies might need to raise prices.

    When incorporating the tariffs into pricing, companies should monitor states’ tariffs announcements and state price gouging laws. (COVID-19 price increases resulted in aggressive enforcement.) Companies should follow “drip pricing” laws requiring the upfront advertised price to reflect all fees (including tariffs and surcharges). Companies should brace for class actions under California’s “Honest Pricing Law,” and challenges to “junk” fees.Continue Reading Eight Questions Advertisers Should Be Asking About Tariffs

    On Wednesday, the Supreme Court heard oral arguments in Federal Communications Commission v. Consumers’ Research (consolidated with SHLB Coalition v. Consumers’ Research), a case about the role of executive administrative agencies and congressional delegations of power to those agencies that could revitalize the long-dormant nondelegation doctrine.

    This case has broad implications for administrative law generally, but for agencies that are empowered to assess fees or that delegate to private entities in particular. Notably, similar arguments about the doctrine were used to challenge some of the FTC’s more aggressive efforts under Lina Khan, former chair of the Federal Trade Commission (FTC) . An affirmance would invite more aggressive challenges to all sorts of agency actions where arguably Congress’s delegation is unclear or goes too far.Continue Reading Supreme Court Hears Oral Argument in Nondelegation Case Implicating the Powers of Administrative Agencies

    We’ve written previously about the Trump administration’s effort to increase his influence over independent agencies such as the FTC and to review regulations promulgated by these agencies. The White House is also reportedly directing agencies, including the FTC, to prepare for reductions in force. But, given these developments, what will the FTC under Chairman Ferguson prioritize for the Bureau of Consumer Protection? Some clues and some speculation follow.

    On February 26, Chairman Ferguson announced the creation of a task force including staff from the Bureau of Consumer Protection, Bureau of Competition, Bureau of Economics, and the Office of Policy Planning to focus on protecting consumers in their role as workers, which are similar to previously proposed efforts under the prior administration. The directive to the FTC staff identifies conduct that should be part of the effort, including:

    • Deceptive job advertising
    • Deceptive business opportunities
    • Misleading franchise offerings
    • Job scams

    Continue Reading Some Hints About and Clues to the FTC’s Consumer Protection Priorities

    The Federal Communications Commission (FCC) under new chair Brendan Carr has issued an enforcement advisory addressing complaints that radio stations are coercing musical artists to perform for free at station events by threatening to reduce their airplay if they refuse.

    The advisory warns that arrangements requiring performers to play at broadcast station events in exchange for airplay, particularly when coupled with threats of reduced airplay for non-compliance, could violate the FCC’s payola rules. These rules prohibit broadcasters from making programming decisions based on receiving anything of value without on-air disclosure of such consideration. A band’s coerced free performance could constitute such consideration and, if not disclosed during subsequent airplay, would violate payola policies.

    The FCC characterized these practices as “covert manipulation of radio airplay,” noting that “[w]hen payola causes stations to broadcast programming based on their financial interests at the expense of community responsiveness, the practice is inconsistent with localism.” While commercial stations can negotiate increased airplay in exchange for event appearances, any agreement for free performances must be disclosed to listeners each time the artist’s songs are played.Continue Reading FCC Enforcement Advisory Issued Regarding Payola and the Sponsorship Identification Requirements

    Last week, President Trump issued two executive orders aimed squarely at upending the long-accepted authority and independence of certain federal agencies. The first order, Ensuring Accountability for All Agencies, derides “so-called independent regulatory agencies” that traditionally promulgate rules and regulations without requiring preclearance by the president.

    The order declares such actions to be unaccountable to the American people and contrary to the Trump administration’s position that all executive power must be supervised and controlled by the president. Relatedly, the order declares that the opinions of the president and the attorney general are the only authoritative interpretations of law for the executive branch, without exception.

    The order requires all executive agencies to submit all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA), which sits within the Executive Office of the President, before publication in the Federal Register. Notably, the order carves out the Federal Reserve, perhaps indicating the administration is cognizant of the potential ramifications for the broader economy if the Federal Reserve’s independence were to come into question.Continue Reading New Executive Orders Declare “So-Called” Independent Agencies No Longer Independent

    This week, the U.S. Court of Appeals for the Fifth Circuit vacated the Federal Trade Commission’s (FTC) Combatting Auto Retail Scams (CARS) rule. Industry groups had challenged the rule, arguing that:

    • The FTC violated Section 18(b) of the FTC Act by failing to issue an advance notice of proposed rulemaking (ANPRM) before promulgating the CARS rule.
    • The FTC arbitrarily and capriciously failed to articulate a reasoned basis for the rule.
    • The FTC’s cost-benefit analysis was arbitrary and capricious.

    The decision highlights the Fifth Circuit’s hostility to the “Administrative State” and the two different rulemaking schemes under which the FTC operates.Continue Reading The Fifth Circuit Slams the Brakes and Vacates FTC CARS Rule

    These days, it seems like there are three guarantees in life—death, taxes, and monumental Supreme Court administrative law opinions in the summer. As you’ve probably heard by now, the trend continues this year, including perhaps the largest fireworks display possible (in the administrative law context, that is). If for some reason you’ve been ignoring the news, just recently in Loper Bright Enterprises v. Raimondo, the Supreme Court overruled the Chevron decision and held that courts need not defer to an agency’s interpretation of a statute; rather, courts must exercise independent judgment when determining whether an agency acted within its statutory authority.

    There’s a lot to unpack in the 109 pages of majority, concurring, and dissenting opinions. So, we’ll just focus on what this could mean for the recent uptick in agency action coming out of the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB).Continue Reading The Loper Bright Impact: Agency Action Likely to Face More Scrutiny in Light of the Supreme Court’s Disposal of Chevron Deference

    On February 15, 2024, the Federal Trade Commission (FTC) announced a two-step approach to tackling impersonation fraud. First, the FTC finalized a rule regulating the impersonation of businesses and government entities (the Impersonation Rule). Later that day, the FTC proposed a revision to the Impersonation Rule to extend liability to those impersonating individuals.

    The Impersonation Rule deems it unfair or deceptive to falsely pose as or misrepresent affiliation with a government or business entity. This could include using government seals, business logos, or spoofed email addresses. Even more broadly, the rule prohibits using government or business lookalike insignias or marks without prior authorization. The rule will become effective 30 days after it has been finalized.Continue Reading Impersonation Rulemaking: FTC Takes Steps to Tackle AI

    On January 29, 2024, Congressman Frank Pallone, Jr. introduced the Do Not Disturb Act, a bill that would amend the Telephone Consumer Protection Act (TCPA) and “fix” the Supreme Court’s ruling in Duguid that limited the definition of “automatic telephone dialing system” (ATDS).

    Robocalls, the New ATDS

    The bill would delete the term “automatic telephone dialing system” from the TCPA and would instead replace it with “robocalls.” The bill defines “robocalls” as calls and text messages sent using equipment that makes calls or sends text messages to stored telephone numbers or telephone numbers generated by a random or sequential number generator, or using an artificial or prerecorded voice or an artificially generated message.Continue Reading New Bill to Modernize the TCPA Would Significantly Expand Potential Liability