Ad Law Access PodcastConsumers increasingly want to feel good about their buying decisions and like-minded companies often look for ways to communicate how they align with consumers in the marketplace through “cause marketing.”

Advertising and Marketing and Consumer Product Safety practice groups chair Christie Grymes Thompson covers a specific type of cause marketing – the commercial co-venture (CCV) – in the latest episode of the Ad Law Access PodcastCause Marketing – Commercial Co-Ventures: What You Need to Know Before Getting Started.

Commercial coventures are typically when a company teams up with a charity to offer a product or service or to sponsor an event, and consumer’s purchase or participation in the event triggers a donation to the charity. Christie discusses the statutes that apply to co-venturers and what you need to know to get started.

You can find the Ad Law Access podcast through your favorite streaming service (Apple Podcasts, Spotify, Google Podcasts, Stitcher, SoundCloud, and others).

 

Advertising and Privacy Law Resource Center

This month’s update kicks off spring with a Best in Show throwback ad comparing dog flea and tick medication, pivots to claims for survivalist ready-to-eat meals (don’t even try to act like you saw that coming), highlights FDA’s recently-issued voluntary recall guidance, provides a food court update on the latest ingredient class actions and cleans up with a pet food win in the Tenth Circuit on “fresh” and “regional” claims.  Call it March madness because there’s a lot going on. Let’s get started…

NAD

Best in Show NAD evaluated whether flea and tick medications were fairly compared via a television advertisement reminiscent of the beloved film Best in Show.  The challenged ad featured a comparison of NexGard and Bravecto in a dog show setting.  The host announces: “Welcome. It’s time to see which chew is best in show for long-lasting flea and tick protection.”  As shown below, a disclosure appears on the bottom the screen stating “BRAVECTO Chews for Dogs kills fleas, prevents flea infestations, and kills ticks (black-legged tick, American dog tick, and brown dog tick) for 12 weeks. BRAVECTO Chews also kills lone star ticks for 8 weeks. NexGard is approved for 30 days.”  By week 12, the host declares Bravecto the “clear winner”.

NAD determined that, viewing the commercial in its entirety, the commercial blends duration of action claims with a comparative superiority message and that one reasonable interpretation of  the commercial is that Bravecto is superior to NexGard in protecting dogs from flea infestations. Further, NAD determined that the presentation and plain language of the disclosure were inadequate to explain that dosing intervals were the basis for the product comparison, not overall efficacy.  NAD recommended discontinuing the advertisement.  Merck is appealing to the NARB.  For more on this “apples to oranges” comparison and, better yet, a picture of cute dogs, check out Gonzalo Mon’s blog post and podcast episode here.

Not #1 NAD reviewed baby wipes testing to determine whether Water Wipes could substantiate claims that its wipes were the “#1 wipe against the causes of diaper rash” and a similar “clinically proven” claim.  As support for its claims, the advertiser relied on the results of its “Baby Skin Integrity Comparison Survey” (BaSICS Study), involving home use tests of three baby wipe brands on infants from birth to eight weeks old.  NAD identified several concerns about the design of the BaSICS Study, including:

  • The study universe was too narrow to support the broad #1 claims;
  • The study’s failure to attempt to control for the use of skin creams and lotions to treat infants with diaper rash, which could significantly impact the role of the wipes in preventing diaper rash; and
  • The study did not attempt to blind the branding and marketing on the packaging itself, which could have biased the survey participants’ responses.

Based on this, NAD found that the “#1” and “clinically proven” claims were unsubstantiated.

Delivering Social Justice?  NAD initiated a challenge against app-based delivery service DoorDash relating to the following claim: “We are donating $1 million, with $500,000 going to Black Lives Matter and $500,000 to create a fund to be directed by the Black@DoorDash  ERG  (Employee  Resource  Group)  towards  state  and  local organizations.”  In response to the inquiry, DoorDash provided documentation that substantiated donations exceeding $1 Million to various state and local organizations pursuant to its Black@DoorDash ERG.  NAD determined that the documentation adequately substantiated the claim.

These kinds of campaigns, frequently called commercial co-ventures, are subject to various state registration and bonding requirements in addition to advertising laws.  For more resources on these campaigns, check out our commercial co-ventures resources.

Sign of the Times And finally, if your tastes tend more toward preparing for the end of days, check out NAD’s decision regarding advertising for survival food kits. In a challenge that explores a range of advertising issues, one among them is whether the name of the meal kit – “3-Month Survival Food Kit” or “1-Year Survival Food Kit” conveys any messages about serving size, caloric content, or adverse effects of consuming the food for the stated period.  NAD determined that no implied claims were conveyed by the names alone but suggested that the advertiser modify disclosures regarding the number of calories offered in each kit to ensure that they are clear and conspicuous.

This decision stands in contrast to FTC’s Dietary Supplements: An Advertising Guide for Industry, which explains that product names can convey claims.  See the Identifying Express and Implied Claims section here.

 

FDA + USDA

Updated Voluntary Recalls Guidance FDA published Initiation of Voluntary Recalls under 21 CFR Part 7, Subpart C, which is an update to draft guidance issued in April 2019.  The guidance describes steps that all FDA-regulated firms should take to prepare for recalls, including identifying appropriate personnel and training them on their responsibilities, identifying reporting requirements, use of adequate coding, and maintaining records.  In addition, the guidance discusses procedures relating to initiating and executing a recall and how FDA works with recalling firms.  Comments may be submitted here.

PFAS  FDA issued new test results regarding PFAS levels in a range of foods and shared an update on the voluntary market phase-out of certain short-chain PFAS used in food packaging.  From the agency’s summary: Results from the FDA’s most recent survey of the general food supply show that 89 of 92 food samples had no detectable levels of PFAS. Three seafood samples—tilapia, cod, and shrimp—had detectable levels of PFAS. The food samples analyzed were collected for the FY2021 regional collection of the Total Diet Study (TDS) and are the fifth set of general food supply testing done by the FDA. To date, there have been 10 samples with detectable PFAS out of 532 TDS samples the FDA has tested since 2019. Based on the best available current science, the FDA has no scientific evidence that the levels of PFAS found in the TDS samples tested to date indicate a need to avoid any particular food.

  • Alleged presence of PFAS in non-food products is being used as the basis for false advertising lawsuits involving a range of cosmetics and even underwear.  Check out this link for a few recent examples.   Companies seeking to evaluate risk around PFAS should look carefully at ingredients and warning language to determine whether disclosures are adequate.
  • On a related note, our friends at Kelley Green Law Blog wrote about EPA’s recent release of PFAS data and plans to eliminate a de minimis exemption for PFAS here.
  • In addition, Washington state is considering legislation to ban PFAS and other chemicals from cosmetics and personal care products.  SB 5703, the Toxic-Free Cosmetics Act, would ban PFAS, phthalates, and formaldehyde, among other chemicals.  If enacted, the new law would become effective in 2025.

Tech Talk  As part of FDA’s New Era of Smarter Food Safety initiatives, on March 21, the agency will air the third episode in a quarterly podcast series which focuses on the development and use of new technologies to accelerate prevention of food safety problems and speed responses to foodborne-illness outbreaks.

Climate Smarts USDA announced details of the Partnerships for Climate-Smart Commodities opportunity on February 7, 2022. Through this new program, USDA will finance partnerships to support the production and marketing of climate-smart commodities via a set of pilot projects lasting one to five years. Pilots will provide technical and financial assistance to producers who implement climate-smart practices on a voluntary basis on working lands; pilot innovative and cost-effective methods for quantification, monitoring, reporting and verification of greenhouse gas benefits; and market the resulting climate-smart commodities.

  • As we wrote about last month, climate-beneficial claims are getting an are likely to continue to get a significant amount of attention from consumers, regulators, and the plaintiffs’ bar.

FTC + State AGs

Looking to Make Money?  Whether it’s food or package delivery, sale of cosmetics or dietary supplements, or another interest-earning venture, the FTC is concerned about potentially deceptive earnings claims.  To that end, the FTC released an Advanced Notice of Proposed Rulemaking (ANPR) on earnings claims as it embarked on a mission to adopt a rule that would give the FTC, in its own words, “an important new tool to return money to consumers injured by deceptive income claims, and to hold bad actors accountable with civil penalties.”  Importantly, the ANPR also suggests that the rule could do more than just change the FTC’s enforcement tools and also seek to substantively change the standard that has long been applied in analyzing earnings and lifestyle claims.  Interested parties will have 60 days from publication in the Federal Register to submit comments and respond to the FTC’s questions and requests for evidence.  Check out the full blog post and podcast from Donnelly McDowell and John Villafranco to learn more about past enforcement and where the agency is headed.

But Are You Who You Say You Are? The State AG’s joined the FTC in expressing concern about impersonation scams such as deceptive mail solicitations and phone calls that appear to come from government agencies.  Our State AG team analyzes the multi-state efforts and what’s likely to happen here.

Class Action Update

The courts served up a bit of a mixed bag in February, deciding a number of dispositive motions in the voluminous “ingredient” class action docket.

Starting with the dismissals:  A New York federal court dismissed a lawsuit alleging that Mars falsely advertised its vanilla ice cream bars as having “milk chocolate” coating when, in fact, the coating contained vegetable oils.  The court ruled it was “nothing more than a conclusory leap” to allege that reasonable consumers read statements about milk chocolate “to implicitly mean that the product necessary contains no vegetable oils.”  Additionally, two different judges in the Northern District of California dismissed cases filed against Kind, LLC and Kashi Co., alleging that various food products were miscalculating the products’ protein content in the Nutrition Facts panel.  Applicable FDA regulations only require identification of the raw of number of grams of protein in a food product, and allow that calculation to be made using what is known as the “nitrogen” method.  If a label makes a protein nutrient claim on the front of the package, however, the Nutrition Facts panel must also include a “% Daily Value” calculated using a different method, the Protein Digestibility Corrected Amino Acid Score (“PDCAAS”).  The plaintiffs in both of these cases argued that if a protein nutrient claim is on the label, then both the raw protein content and the % Daily Value must be calculated using the PDCAAS method. The court disagreed, finding that such claims are preempted by the FDCA because they would impose labeling requirements that go beyond what the FDA regulations require.

Some courts took a different approach, denying motions to dismiss in several “ingredient” cases and sending them into discovery.  For example, an Illinois court sustained a complaint alleging that a product labeled “smoked almonds” suggested that the nuts were actually roasted over an open fire, particularly because the product’s red packaging was “evocative of fire.” And in California, a judge allowed a “vanilla” yogurt class action to proceed despite three prior dismissals.  The court previously ruled that dismissal of the California Unfair Competition Law (“UCL”) claim was appropriate because no reasonable consumer would conclude that the yogurt’s vanilla flavor was derived only from natural sources and therefore the plaintiff had failed to plausibly allege reliance as required by the UCL.  The amended complaint, however, contained allegations that the yogurt violated various FDA regulations, which are incorporated into California state law through the state Sherman Food, Drug, and Cosmetic Law.  Since the Sherman Act does not require reliance as measured by a reasonable consumer, nor should the plaintiffs’ UCL claim.

And some new filings:  We saw a number of new food class action filings following the same trends we have been seeing in recent months including: (1) challenges to the use of “natural flavoring” in Poland’s sparkling water (N.D. Illinois); (2) alleged misrepresentation of cacao content in various Mondelez’s dark chocolate products; and (3) allegations relating to the amount of whole grains used in The Cheesecake’s Factory’s “brown bread” (N.D. Illinois).  Infant formula and baby food products were also a target in February, with new actions filed against Abbott Laboratories alleging that various Similac infant formulas are causing infants to develop bacterial infections and gastrointestinal illness (N.D. Illinois and S.D. Florida), against CVS for allegedly misleading label similarities between its infant and toddler formula products (N.D. Illinois), and against Sprout Foods for suggesting its baby food products are healthier than its competitors’ products (N.D. California).

In the personal care, supplement, and drug space, new filings included:  (1) multiple actions challenging “non-drowsy” claims for over-the-counter cough and flu medicine (C.D. California, S.D.N.Y., M.D. Florida, N.D. Illinois, and E.D. Michigan); and (2) a number of efficacy challenges including to claims that E.T. Browne Drug Co.’s “Tummy Butter” drastically reduces the appearance of stretch marks (Illinois state court) and Mommy’s Bliss’s gripe water reduces symptoms of colic in newborns (N.D. California).

Finally, the Tenth Circuit affirmed the dismissal of various challenges to pet food marketing claims in Renfro v. Champion Petfoods USA, Inc.  Specifically, the court ruled that “Fresh” and “Regional” claims were subjective, and that the plaintiffs’ suggested meaning—that all ingredients were “fresh”—were belied by the rest of the products’ packaging.  The court also found that Champion’s “Trusted Everywhere” claims were inactionable puffery.  Finally, the court disagreed with the plaintiffs’ allegations relating to Champion’s “Biologically Appropriate” claims, finding that no reasonable consumer would interpret the claim to mean that the dog food mirrored the “richness, freshness, and variety” of a dog’s natural prey, and was “protein rich and carbohydrate limited.”

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Stay tuned for our next monthly update and, in the meantime, check out www.adlawaccess.com for regularly-posted content on all things advertising, privacy, and consumer protection.

Kelley Drye ThanksgivingBarring an advertising or privacy law emergency, like you, we’ll be taking the next few days off to give thanks and spend time with family. Next week, please join us for:

  • Made in USA claims – navigating FTC’s ‘all or virtually all’ standard
    WebinarConsumers continue to demand goods manufactured in the United States and will pay a premium for such products. At the same time, the Federal Trade Commission (FTC) continues its high-profile focus on US origin claims, launching dozens of investigations, announcing various noteworthy settlements and advocating for a proposed rule that would include the possibility of civil penalties over $43,000 per violation. This webinar will explore Made in USA claims and discuss:

    • What types of claim have attracted regulatory attention;
    • How to comply with the FTC’s requirements; and
    • What to do if the FTC contacts you.

Register here to Join Christie Grymes Thompson on 3 December 2020 at 1:00pm EST (6:00pm GMT).

While we’re away:

Some of our post popular episodes include:

In this time of Thanksgiving, we express sincere appreciation for our clients and all friends of the firm. While holiday celebrations this year will be very different, without the usual gatherings and traditions, we are focused on the underlying spirit of giving thanks. Wishing you good health, time with family and friends (even if that’s FaceTime), and optimism for the future.

Advertising and Privacy Law Resource Center

The COVID-19 pandemic has given all of us renewed interest in our communities and giving back to them. Similarly, many companies are teaming up with charitable organizations to support efforts related to COVID-19 through cause marketing campaigns. Cause marketing campaigns can trigger various state laws, like those governing “commercial co-ventures,” particularly when they involve a consumer purchase.

Below are a few resources for companies looking to enter into new commercial co-ventures or rekindle previous relationships:

Advertising and Privacy Law Resource Center

 

 

In 2019, Ad Law Access published 124 stories on a wide range of topics. However, two topics stood out above the others:

  • California Consumer Privacy Act (CCPA)
    CCPA was far and away the most popular topic of 2019 and, as mentioned in one of our last posts of the year, “businesses and privacy professionals would do well to catch their breath over the holiday season. Next year is going to need focus and investment to reach the [CCPA] finish line (which, yes, will continue to move because this is privacy law, after all).​” Here are a few CCPA related posts you may want to read if you haven’t already:

Stay tuned for more installments of the “Section 13 (b)log.”

Other posts that resonated with readers:

Stay tuned to Ad Law Access in 2020 for more updates on these issues and other advertising and privacy law issues. Subscribe to our Ad Law News and Views newsletter and other Kelley Drye publications here to receive email communications tailored to your interests.

AD LAW ACCESS PODCAST

2019 also saw the launch of the Ad Law Access podcast. Top episodes included:

You can find the Ad Law Access podcast and other Kelley Drye podcasts wherever you get your podcasts.

Two attorneys from the Michigan-based 1-800-LAW-FIRM recently filed a class action lawsuit against Lady Gaga and her corporate partners in connection with the promotion and sale of wristbands to benefit victims of the March 2011 earthquake and tsunami in Japan.

“We Pray for Japan” wristbands are available for purchase for $5 through Lady Gaga’s official website, which represents that “all proceeds go directly to Japan relief efforts.” The plaintiff, on behalf of herself and all others who purchased a wristband, claims that the defendants retained a portion of the $5 donation; inflated reports of the total amount donated; imposed shipping charges in excess of the amount required to ship the items (and kept that excess amount for themselves); and wrongfully taxed the donations. Companies engaged in commercial co-ventures – the offering of a product for sale in connection with a donation to a charitable organization – and cause marketing campaigns should track the case and consider whether to make adjustments to their own campaigns.

Click here to read more about the allegations filed against Lady Gaga in this class action lawsuit.

 

In recent years, more companies have been willing to take public positions on social issues and to promote certain causes. Different types of promotions raise different legal issues. For example, if a company advertises that a purchase will lead to a donation to a charity, that could trigger requirements under commercial co-venture laws. (Listen to this podcast for more details.) Other types of promotions – such as simply announcing a charitable donation – trigger fewer requirements.

Whatever path a company takes, though, it must make sure that it actually does what it says. Although state regulators are usually the ones who pay most attention to these campaigns to ensure that companies comply with the law, two decisions issued by NAD this week signal that the self-regulatory body will also be monitoring these types of campaigns and holding companies accountable.

In one case, NAD requested substantiation from DoorDash for its claims that: “We are donating $1 million, with $500,000 going to Black Lives Matter and $500,000 to create a fund to be directed by the Black@DoorDash ERG (Employee Resource Group) towards state and local organizations.” Based on documentation provided by DoorDash that included invoices and acknowledgement letters, NAD determined that the challenged advertising claim was substantiated.

In the other case, NAD requested substantiation from Niantic for various claims, including that it would donate a minimum of $5 million from proceeds from Pokémon GO Fest 2020 ticket sales, half of which would be used to fund new projects from Black gaming and AR creators, and half of which would go to nonprofit organizations that help local communities rebuild. Based on evidence provided by Niantic, NAD determined that the challenged advertising claims were substantiated.

These cases don’t break new ground and simply highlight the importance of making good on your promises. But as companies continue charitable marketing campaigns – something we expect to see more of, in light of Russia’s invasion of Ukraine – it’s important to keep in mind that there are various entities who will hold you accountable. Make sure to keep good records of your activities so that you can quickly address any inquiries.

(Speaking of Russia, make sure you check out the ongoing guidance being published by our Export and Sanctions Team at Kelley Drye.)