For decades, the FTC has explained that the omission of information can lead to liability.  It is also a canon of statutory construction that an amendment helps reveal legislative intent. And of course, your mother put it simply: words that you say (and take back) have meaning.

Earlier this month, the Commission released its draft

Last week. FTC Commissioner Christine Wilson delivered a speech with a title that made clear she intended to speak her mind: The Neo-Brandeisian Revolution: Unforced Errors and the Dimunition of the FTC.  

Predicting that the new FTC Leadership will fall far short of achieving its objectives — most of which she opposes — Commissioner Wilson

The Section 13(b) Fix:  Stand-Still on the Hill?Following House passage of 13(b) legislation this summer, Congressional Democrats seem to have lost some of the urgency with which they were moving to strengthen the FTC’s penalty authorities in the wake of the Supreme Court’s AMG decision. This is partly due to their preoccupation with a months’-long effort to move President Biden’s “Build Back Better” agenda and partly due to the need for some degree of bipartisan consensus in the Senate.  With the caveat that Congress can – and often does – surprise us, the prospects for a 13(b) fix any time soon remain murky at best.

Beyond Democrats’ pending budget reconciliation legislation, Congress’s focus through the end of the year is on deadlines for several “must-pass” bills (e.g., government funding, the debt ceiling, and the annual defense authorization bill).  While attaching policy riders to these year-end legislative initiatives is standard practice, it is unclear how hard Democrats may be pushing to include a 13(b) fix in the face of myriad legislative distractions, nor is it clear that Senate Republicans are ready to play ball.

Yes, there is always next year, but 2022 is projecting to be an even uglier legislative environment (if it could be imagined).  And while this could work either way for 13(b) – Democrats may be more desperate to make a deal (if they think they won’t be in power come 2023) and Republicans may be less willing to compromise (for the same reason) – it is unlikely that any legislative fix will include the exact language preferred by the FTC.  The end result could be that nothing happens here, with Republicans content to sit tight, and Democrats unwilling to beat their chests about 13(b) on the campaign trail.

Since most of our readers don’t regularly swim in these waters, let’s recap –
Continue Reading The Section 13(b) Fix:  Stand-Still on the Hill?

In its third recent Penalty Offense Authority notice, the FTC today notified more than 1,100 companies offering “money-making opportunities” that it intends to pursue civil penalties of up to $43,792 per violation for misrepresentations related to potential earnings and related characteristics about the opportunity.  Recipients of the notice include virtually every major direct selling company and others in the gig economy such as Amazon, DoorDash, Lyft, and Uber.

That makes more than 1,800 companies that have been put on notice of penalty offenses in the past month.  It also crosses another alleged deceptive practice off the list laid out in the October 2020 paper authored by current Bureau Director Sam Levine and former FTC Commissioner Rohit Chopra, entitled The Case for Resurrecting the FTC Act’s Penalty Offense Authority.  Next up?  Well, if the Chopra/Levine paper points the way (and it appears to), we should expect future notices that focus on allegedly unfair and deceptive data harvesting and targeted marketing.

In addition to the eight categories of misrepresentations in today’s notice ranging from the amount of earnings possible to the amount of training provided, the sample cover letter published online also includes a section on endorsements and testimonials.  This means that each company receiving today’s notice also will receive the notice published last week on endorsements and testimonials, which over 700 companies also received (with some minimal overlap in that list).
Continue Reading Next Up – Earnings Claims:  Notice of Penalty Offenses Sent to 1,100 Direct Selling Companies and Others in the Gig Economy

Since Congress enacted the Children’s Online Privacy Protection Act (COPPA) in 1998, the regulatory wall between kids and teens has been a remarkably durable one. During all this time, COPPA, the primary U.S. law protecting kids’ privacy, has protected children under 13 but hasn’t provided any protections for teens. While California’s privacy law

It was an extraordinary week as the FTC continued to press the frontier of the post-AMG Capital Management landscape.

On Friday, the Commission, making good on promises to creatively explore all of its options for enforcement, announced by a 3-2 vote that it had reached a settlement pursuant to Section 19 of the FTC Act with Resident Home LLC and its owner Ran Reske.  At issue were allegedly false claims that the company’s imported mattresses are made from materials fully manufactured in the United States. As part of the settlement, Resident Home and Reske agreed to pay $753,000.

This action follows the FTC’s announcement earlier in the week that it had notified 70 for-profit higher educational institutions that it intends to make use of its long dormant Penalty Offense Authority.  As contemplated by the FTC, the Penalty Offense Authority would allow the Agency to obtain civil penalties when institutions make misrepresentations about their programs, and job and earnings prospects.
Continue Reading Pushing the Boundaries of Existing Authority: Section 19 Post-AMG Capital Management

Last week, we wrote about FTC Chair Khan’s memo describing her plans to transform the FTC’s approach to its work. This week, she followed up with a no-less-ambitious statement laying out her vision for data privacy and security, which she appended to an agency Report to Congress on Privacy and Security (“report”). Together, these documents outline a remarkably far-reaching plan to tackle today’s data privacy and security challenges. As noted in the dissents, however, some of the stated goals may exceed the bounds of the FTC’s current legal authority.

Continue Reading FTC Chair Khan’s Vision for Privacy – and Some Dissents

In an aggressive expansion of its security and privacy enforcement programs, on September 15, 2021, the FTC issued what it characterized as a “Policy Statement” reinterpreting an old rule about personal health records.

First, some background. In 2009, Congress directed the FTC to create a rule requiring companies to provide notice when there

The dietary supplement and personal care product space continued to see enforcement on false CBD, COVID, and fertility claims as well as related litigation involving “germ-killing” claims on hand sanitizers and wipes.  Messy stuff…Let’s take a look…

LITIGATION

Personal Care Products

In a blow to the trending “pink tax” theory of liability in consumer class actions, in May, the Eighth Circuit ruled that various personal care product manufacturers and retailers did not violate Missouri’s anti-discrimination laws by charging more for products marketed towards women as compared to allegedly identical products that were either marketed towards men or utilized gender-neutral marketing.  The Court found that the plaintiff “mistakes gender-based marketing for gender discrimination” and, in the process, ignores numerous differences between the products that account for the higher price tag.  There has been a handful of similar “pink tax” cases filed over the last year or two, but this is the first appellate court to rule on the issue.
Continue Reading Dietary Supplement and Personal Care Products Regulatory and Litigation Highlights – May and June 2021

For our June review, the action stays largely in the litigation arena with vanilla getting thrown out and sustainability as well as settlements getting called into question.  Meanwhile, environmental and health stakeholders are pushing FDA to ban PFAS from food contact uses as many in industry move away from PFAS-containing packaging.  How to digest all of it?  Consider some yogurt.  FDA updated the standard of identity, making it more delicious than ever.  Let’s take a look….

LITIGATION

Two More Vanilla Cases Get Thrown Out of the Food Court

In Robie v. Trader Joe’s Co., the Northern District of California dismissed claims that Trader Joe’s Almond Clusters cereal should have been labeled as “artificially flavored.”  The court held that, because the vanilla flavor can from both the vanilla plant and vanillin derived from tree bark, it was properly labeled as “Vanilla Flavored With Other Natural Flavors” under applicable FDA regulations and the plaintiff’s claims suggesting otherwise were preempted.  The court also found that the plaintiff had failed to allege facts suggesting that reasonable consumers would interpret “vanilla” on the product label to mean that the product’s flavor is derived exclusively from the vanilla plant, especially given that the challenged label did not contain any other words or pictures suggesting that the flavor was derived exclusively from the vanilla bean.
Continue Reading Food Industry Regulatory and Litigation Highlights – June 2021