Advertising & Product Risk Management

A new trend in false advertising lawsuits targets specific characterizing flavor claims on the labels of foods and beverages. For example, Frito-Lay was recently sued in California federal court alleging the company’s “Tostito’s Hint of Lime” tortilla chips falsely implies that natural lime is a primary flavoring ingredient and that consumers were misled by various misrepresentations of lime on the product packaging. Kellogg, Hershey, and Bimbo Bakeries were all sued because the “fudge” in their respective products allegedly are produced with vegetable oil substitutes instead of butter and milk, which the complaint alleges is known to consumers as the traditional way of making fudge.

Typically, in these false or misleading flavoring ingredient lawsuits, a plaintiff attempts to represent a class of consumers and alleges they were charged a premium price for the products because of the specific ingredient, based on the misleading representation.  The plaintiff generally must also allege that they would not have purchased the product in the first place if they had known that the specific ingredient was missing.


Continue Reading Despite the Pandemic, Food-Related False Advertising Lawsuits Continue to be Frequent Filers

In a recent Law360 article titled, “Navigating NFT Brand Management Risks And Rewards,” David Ervin, Kayvan Ghaffari and Carissa Wilson explain what brand and business owners should know about NFT opportunities and corresponding risks, particularly with respect to trademark, licensing, anti-counterfeiting and advertising law.

Click here to read the full article.

Last week the Supreme Court unanimously held that §13(b) of the Federal Trade Commission Act does not give the Federal Trade Commission the power to seek equitable monetary relief such as disgorgement or restitution. The Court’s opinion in AMG Capital Management LLC v. Federal Trade Commission removes a powerful tool that the FTC has long relied on to pursue monetary relief for consumers in both consumer protection and competition matters.

By way of background, the FTC has authority to protect consumers from unfair or deceptive acts or practice (“UDAP”) and unfair methods of competition (“UMC”) with an overlapping but distinct set of tools it can use to pursue its dual consumer protection and competition missions:

  • Administrative Proceeding: The FTC can initiate an administrative proceeding to seek a cease and desist order for either a UDAP or UMC violation from an administrative law judge. If necessary, the FTC can later bring a contempt proceeding in federal court seeking to enforce the terms of an administrative order. A defendant may respond by arguing that it has “substantially complied” with the terms of the order. If the FTC prevails in such a case, it can seek civil penalties and other equitable relief necessary to enforce the order (however monetary relief only applies to UDAP violations).
  • Rulemaking: The FTC has authority to promulgate rules that define UDAP with specificity. Generally, this requires a lengthy, formal rulemaking process that allows for public comment, and a final rule can be challenged in federal court. If a defendant later violates a duly enacted UDAP rule, the FTC can seek civil penalties for a knowing violation. The FTC can also file suit in federal court and obtain monetary relief “to redress consumer injury,” including an order compelling “refund of money or return of property,” but only if “a reasonable man would have known under the circumstances [that the challenged conduct] was dishonest or fraudulent.”
  • Federal Court: The FTC can sue in federal court under §13(b) of the FTC Act to enjoin a defendant when the defendant “is violating, or is about to violate” a law that the FTC enforces and such an injunction is in the public’s interest. While courts have historically read §13(b) as giving the FTC an implied right to recover equitable monetary relief in addition to injunctive relief, the Supreme Court’s ruling now limits the FTC to seeking injunctive relief only.


Continue Reading The Supreme Court Limits FTC’s §13(b) Powers

Maryland became the first U.S. state to create a digital advertising tax on February 12, 2021. The Digital Advertising Gross Revenue Tax (DAGRT) was originally passed in March of 2020, but subsequently vetoed by Maryland Governor, Larry Hogan. Maryland’s legislature voted to override the Governor’s veto, however. The contentious journey for DAGRT passage is likely to be overshadowed by a litigious future.

DAGRT (full text here) imposes a progressive tax on the sale of digital advertising services’ gross revenue within the state. DAGRT focuses on large providers of digital advertising services; entities with revenue exceeding $100 million. The rate of the tax imposed, based on global revenue, is 2.5% for annual global gross receipts of $100 million to $1 billion, 5% for gross receipts of $1 billion to $5 billion, 7.5% for gross receipts of $5 billion to $15 billion, and 10% for gross receipts exceeding $15 billion. The rate then applies to digital advertising services’ gross revenue in Maryland. However, DAGRT does require all entities with an annual gross revenue derived from digital advertising services within the state over $1 million to file a specialized tax return. DAGRT’s focus on large providers of digital advertising services might incentivize these providers to find avenues to avoid the tax by changing their digital advertising strategies. For example, more companies may offer advertisement-free subscription options. It’s also possible that the companies faced with paying the tax may simply pass the cost on to the smaller businesses purchasing the advertisements and to consumers.
Continue Reading Maryland’s Digital Advertising Tax: A Contentious Start, and an Uncertain Future

On December 18, 2020, the Ninth Circuit Court of Appeals held that “Oh, the Places You’ll Boldly Go!,” a Dr. Seuss and Star Trek mashup illustrated book, is not a fair use exempted from copyright liability. Under the Copyright Act of 1976, the factors courts assess in determining if there is fair use include:

  1. The

On November 30, 2020, New York Governor Cuomo signed into law a bill that will allow estates and representatives of deceased individuals to defend their names and likenesses from commercial exploitation, allowing their estates to continue to control and protect their likeness after their death. The new law, which establishes a “Right to Publicity” for deceased individuals who were domiciled in New York at their time of death, allows these individuals to that have commercial value, including their name, picture, voice, or signature, against unauthorized use.

In connection with the new post-mortem right to publicity, Governor Cuomo stated, “In the digital age, deceased individuals can often fall victim to bad actors that seek to capitalize on their death and profit off of their likeness after they pass away – that ends today. This legislation is an important step in protecting the rights of deceased individuals while creating a safer, fairer New York for decades to come.” The new post-mortem right of publicity applies up to 40 years after the death of the deceased personality, and it provides certain exceptions, such as for works of art or political interest, parodies and satires, and the use of names and likenesses in the news.

In enacting this law, New York joins the minority of U.S. states which recognize a post-mortem right of publicity, an area of law that has long been controversial and which has resulted in extensive discussion of choice-of-law rules.
Continue Reading ‘Imagine’ This: John Lennon Would Have Received Post-Mortem Right to Publicity in New York

Recently, New York enacted a new law against gendered pricing that was included as a key component of the state’s Fiscal Year 2021 budget and Governor Cuomo’s 2020 Women’s Agenda. In a press release announcing the law, Governor Cuomo states, “By abolishing the pink tax, women and girls will no longer be subject to harmful

Companies in the online marketplace have been paying close attention to Section 230 of the U.S. Communications Decency Act of 1996 (CDA) in recent weeks and months. As noted in our previous client alert, CDA Section 230 “is a powerful law that provides websites, blogs, and social networks that host third-party speech with liability

On June 22, 2020, the Federal Trade Commission (FTC or “Commission”) issued its staff report on the Made in USA workshop, held in 2019, and its long-awaited proposed Made in USA (MUSA) rule (“Rule”). Under the Rule, advertisers would be prohibited from making unqualified Made in USA claims unless:

  • Final assembly or processing of

Stung by repeated criticisms of content moderation decisions in which it either acted or refused to act to remove controversial content such as obviously-doctored political videos, Facebook has developed a new Independent Oversight Board to hear petitions to appeal from those decisions brought by platform users and Facebook itself.  The Oversight Board has been set