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Venable’s Advertising and Marketing Group hosted its 11th Advertising Law Symposium at our offices in Washington, DC on March 20. The symposium brought together both business and legal professionals, including in-house counsel and marketing executives, to connect on trends, opportunities, and challenges in the industry. The sessions covered a breadth of interesting topics on the latest and greatest in advertising law.

If you couldn’t make it, here are some themes that ran through some of the day’s engaging conversations:Continue Reading Key Takeaways from Venable’s 11th Annual Advertising Law Symposium

Last month, New York quietly proposed a bill intended to protect children from advertising of unhealthy foods and the “disastrous health outcomes that follow the overconsumption of these products,” suggesting that such marketing is “inherently misleading.” While the law’s stated goal is to protect children from these negative health consequences, the law goes much further and would open the floodgates to litigation.

The law would expand New York’s Agricultural and Markets Law to state “[a]n advertisement concerning a food or food product shall not be false or misleading in any particular” and require courts to give special consideration to advertising directed at a child.

However, it would also amend New York GBL 350, New York’s general false advertising statute, by requiring courts to consider specific additional factors when determining whether any advertising is false or misleading. Specifically, a court would need to consider under GBL 350 such factors as “whether the advertisement targets a consumer who is reasonably unable to protect their interests because of their age, physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement, or similar factor.”Continue Reading New York Proposes Bill Targeting Unhealthy Food Advertising to Children, with Broader Implications

Earlier this month, NAD issued its first decision under its Fast-Track SWIFT program, its expedited review track for single well-defined advertising issues. (Here are more details on NAD’s Fast-Track SWIFT program.) In its first substantive Fast-Track SWIFT decision, NAD dealt with a dispute between energy bar manufacturers Kind and Clif and reviewed the claim “A Better Performing Bar–Clif Bar For Sustained Energy,” which appeared as the top AdWords result for internet keyword searches for “Kind Bars” and “energy bars.”

Kind argued that this constitutes an express claim comparing the performance of Clif Energy Bars (either generally or with respect to sustained energy) to the performance of Kind Bars or all energy bars on the market, that must be supported by head-to-head product testing. Clif argued that the claim was not appropriate for SWIFT treatment because the challenged claim was too complex. Specifically, Clif argued that expert testimony and a consumer perception survey were necessary to determine whether the word “better” conveyed a comparative performance message or was merely an expression of the advertiser’s opinion of its product, and that these questions could not be obtained within the shortened SWIFT timeline. NAD concluded that the claims were appropriate for SWIFT treatment because they did not require NAD to evaluate complicated product testing (the advertiser did not argue that it had product testing to support a comparative performance claim), and any legal arguments were limited because the challenge involved a single claim in a single context.Continue Reading NAD Issues First Decision under Fast-Track SWIFT Program

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

With the arrival of 2020, many people have begun their New Year’s resolutions to get healthier and lose weight. Is “diet” soda the secret to weight loss success? Not according to the Ninth Circuit, which held last week that it is not reasonable to believe that drinking “diet” soda will help in efforts to lose weight and affirmed dismissal of a false advertising lawsuit.

In the case, Becerra v. Dr. Pepper/Seven-Up, the plaintiff alleged that the word “diet” in Diet Dr Pepper’s brand name violated various California laws, including the state’s False Advertising Law, because it falsely promised that the product would assist in weight loss or healthy weight management. The plaintiff alleged that this was false because an ingredient in the diet soda, aspartame, causes weight gain.

The district court granted defendant’s motion to dismiss without any discovery. In granting the defendant’s motion to dismiss, the district court held that no reasonable consumer would believe that the word “diet” in a soft drink’s brand name promises weight loss or healthy weight management. And, the district court held, even if a reasonable consumer would believe that, the plaintiff had not sufficiently alleged that any such promise was false or that aspartame consumption causes weight gain.Continue Reading Ninth Circuit Holds that “Diet” Soda Name Is Not False or Misleading

Agency Denies Industry Petition and Publishes Revised Draft Guidance

The U.S. Food and Drug Administration (FDA) appears set to ramp up enforcement efforts against companies selling homeopathic products. Since 1988, FDA’s enforcement decisions have been made within the framework of Compliance Policy Guide (CPG) § 400.400. Under this policy, the agency generally limited enforcement actions to products that were either inappropriately labeled or manufactured in violation of good manufacturing practice (GMP) regulations. Publication of the new draft guidance document, which officially withdraws CPG 400.400, is the latest signal that the regulatory landscape is changing – perhaps dramatically.

The agency first revealed a new attitude toward homeopathic drugs with the issuance of a draft guidance in December 2017, which laid out a new “risk-based” model of enforcement that would guide agency decisions on homeopathic products. As we previously reported, this effectively rolled back the permissive framework of the CPG, although the agency noted that the CPG would not be withdrawn until the draft guidance is finalized. Not surprisingly, the homeopathic industry pushed back. One group (Americans for Homeopathy Choice) filed a petition urging the retention of the Compliance Policy Guide and the preservation of FDA’s pre-guidance homeopathy framework.Continue Reading FDA Puts Homeopathic Industry on Notice – No More Lax Enforcement

Previously on the blog, we noted that federal government agencies don’t always play well together. So, when these agencies synchronize their efforts, the industry would do well to take notice. One such coordination effort is well underway. The FDA and the USDA just announced that they will jointly oversee cell‑cultured food production derived from livestock and poultry.

The FDA and the USDA’s announcement follows the agencies’ October 2018 public meeting, where they met with consumers and members of the agricultural industry to discuss safety considerations, possible hazard controls, and labeling concerns related to cell‑cultured foods. Cell‑cultured food production is a burgeoning industry. It continues to raise questions about what will be regulated, what the regulatory process will look like, and which agencies will manage the regulatory process.Continue Reading Cell Cultured Food—FDA and USDA Reach Agreement on Splitting Up Oversight

“On August 30, 2018, businesses will be required to provide revised “clear and reasonable” warnings under California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (known as Proposition 65 or Prop 65) if they would like to avail themselves of the safe harbor provided by the implementing regulations of the Office of Environmental Health Hazard Assessment (OEHHA or the Agency). Retailers and manufacturers/distributors alike should ensure that they are in compliance with the new rules, keeping in mind that there are specific requirements related to products sold via the Internet and product catalogs.

Under Prop 65 and the implementing regulations, businesses with 10 or more employees must provide “clear and reasonable” warnings to Californians before exposing them to a chemical listed by OEHHA as a carcinogen or reproductive toxicant (more than 900 chemicals are now on the list). The current regulations, adopted in 1988, established criteria for what OEHHA considered to be a “clear and reasonable” warning, including specific language that, if used, would be deemed compliant with the regulations (known as “safe harbor” warning language).

In 2016, OEHAA adopted new safe harbor warning regulations that become effective later this month. The new regulations place a significantly heavier burden on manufacturers/distributors to provide consumer product warnings. Specifically, manufacturers/distributors must provide revised warnings on the labels of their consumer products or provide notice and materials to retailers so that retailers can post the revised warning on signs or shelf tags at the point of purchase. Manufacturers/ distributors must update the notice to retailers periodically and obtain electronic or written confirmation from the retail seller that it received the notice.Continue Reading Are You Ready? California’s New Proposition 65 Warning Requirements Take Effect August 30

wine bottlesIs the government about to make it harder for companies to settle consumer class actions? The Department of Justice’s Consumer Protection Branch, in a Statement of Interest (Statement), has requested that a Judge set aside a proposed class action settlement that would enrich plaintiffs’ attorneys to the tune of nearly $2 million. Specifically, the DOJ…

New compliance rulesOn consecutive days last month, both the Consumer Product Safety Commission (CPSC) and the U.S. Food and Drug Administration (FDA) made clear that delays in reporting potential product hazards or defects could significantly damage a company’s reputation and bottom line. The message from these agencies is clear—manufacturers and distributors of products regulated by CPSC and/or FDA would be wise to ensure their product quality processes and compliance programs enable swift communication to regulators and the public. On January 18, FDA Commissioner Scott Gottlieb announced the publication of a draft guidance that “better describes the FDA’s policy on public warning and notification of recalled products as part of [the agency’s] effort to ensure better, more timely information reaches consumers.” The next day, the U.S. Department of Justice announced that a federal district court awarded $5 million in civil penalties in an action brought on behalf of the CPSC against a pharmaceutical company for alleged violations of the Poison Prevention Packaging Act (PPPA) and Consumer Product Safety Act (CPSA), including its failure to “immediately” notify the CPSC once it discovered that its products were not compliant with the PPPA.

The FDA’s draft guidance applies to voluntary recalls of all products under FDA’s purview, including food, drugs, medical devices, and cosmetics. It comments on a variety of issues associated with product recalls, including whether the general public should be informed, and, if so, what the content and method for communication should be. With respect to timing, the draft guidance notes that the agency’s expectations will be driven largely by the nature of the risk presented by the individual recall, although it generally expects firms to issue a public warning within 24 hours of FDA notifying the firm that it believes a public warning is appropriate.Continue Reading FDA, CPSC & the Need for Speed: Recent Actions Highlight Importance of Promptly Reporting Product Safety Issues