On July 1, 2018, California’s revised Automatic Renewal Law (ARL), Cal. Bus. & Prof. Code § 17600 et seq., goes into effect.

The updated law requires e-commerce sellers, doing business in California, to allow online cancellation of auto-renewing memberships or recurring purchases that were initiated online. Continue Reading Stricter Automatic Renewal Law in California Commences July 1, 2018

As this space has addressed before (see here and here), the California Transparency in Supply Chain Act (Civ. Code section 1714.43), enacted in 2010, requires large retailers and manufacturers (those with worldwide sales in excess of $100 million) doing business in California to disclose on their websites their efforts to eradicate slavery and human trafficking from their direct supply chain for tangible goods offered for sale.

In Hodsdon v. Mars, a putative class action, the plaintiff alleged that this California consumer protection law required Mars, Inc. (of Mars Chocolate fame) to disclose on its products’ labels that the products’ supply chains may involve slave labor. The trial judge dismissed the complaint, and on June 4, 2018 the Ninth Circuit affirmed the trial court’s decision, holding that the California consumer protection laws do not obligate Mars to label its goods as possibly being produced by child or slave labor. The court explained that, in the absence of any affirmative misrepresentations by the manufacturer, manufacturers do not have a duty to disclose the labor practices in question, even though they are reprehensible, because they are not physical defects that affect the central function of the chocolate products. Continue Reading Where No Misrepresentation, Ninth Circuit Does Not Require Labels Disclosing Slave Labor

As we reported on previously (see here and here), FDA recently tussled with the manufacturer of an innovative vegan condiment called “Just Mayo” based on the existence of a Federal standard of identity for mayonnaise that requires the food product to incorporate eggs.

Similar disputes related to identity standards that don’t accommodate plant-based versions of foods, or that just don’t allow for new or innovative uses of traditional ingredients, seem to have increased in frequency and visibility over the past year. As a result, we expect that FDA is feeling pressure from diverse stakeholder groups to revisit some of its regulations and policies related to enforcing food standards of identity (SOI). This post highlights some of these emerging disputes and the trend of interested parties raising more challenges to long-standing (but potentially obsolete) food identity standards. Continue Reading Food Identity Disputes Continue to Impose High-Profile Pressure on FDA

On July 24, 2017, the Food and Drug Administration announced that it had responded to a November 2015 petition from Royal Hawaiian Macadamia Nut, Inc. for a new qualified health claim characterizing the relationship between macadamia nut consumption and a reduced risk of coronary heart disease (CHD). Continue Reading Reading the Tea Leaves: Sales of Macadamia Nuts Could Be Going Up!

It has recently been reported that President Donald Trump is looking for ways to defend American-made products by certifying legitimate U.S. goods and aggressively going after imported products unfairly sporting the “Made in America” label, the White House said on July 18, 2017. President Trump announced that his administration would crack down on “predatory online sales of foreign goods” that are hurting U.S. retailers. According to a senior official, the United States loses about $300 billion a year to theft of intellectual property ranging from semiconductors to jeans. In March of this year, the President signed an executive order that gave customs officials more authority to stop pirated and counterfeit items.

This space has addressed the issues, both regulatory and litigation, relating to “Made in America” claims (see herehere, and here). Based on the Administration’s comments,  the White House plans to work with the private sector on the new certification and verification system rather than create new regulations or spend taxpayer money. Continue Reading The Turn of the “Made in America” Claim Enforcement

As we’ve previously reported, FDA has signaled its interest in reviewing the scope and meaning of the nutrient content claim “healthy,” in part as result of a dispute with KIND LLC about label claims for its KIND Bar products. Then last fall FDA released a new guidance document on what constitutes a “healthy” food and proper labeling of such foods, and the Agency simultaneously requested public input on a significant number of questions related to use of this particular claim.

Last week, FDA announced two actions that are intended to further advance this public consultation process for “healthy” label claims. First, it has extended the comment period that was initiated in October with the release of the draft guidance document until April 26, 2017. And it is convening a public meeting to discuss the use of the term “healthy” in the labeling of human food products, in part to further the feedback that may be received during this ongoing comment period. Continue Reading Reexamination of “Healthy” Continues with an FDA Public Meeting in March 2017

Some of our colleagues from Mintz Levin’s Class Action Practice, Joshua Briones, Crystal Lopez, and Grace Rosales, recently authored an interesting and timely article in the Bloomberg BNA Product Safety & Liability Reporter. The article examines certain defenses in consumer fraud class actions over product labeling – specifically, defenses based on faulty damages models. Beyond proving the factual truth of the allegedly misleading labeling claims, the authors tell us, food and other consumer product companies can combat meritless suits by showing that the plaintiff’s damages-calculation model does not meet the requirements established under Rule 23 of the Federal Rules of Civil Procedure.

When reviewing a purported class action lawsuit, Federal Rule 23(b) requires the court to determine that “questions of law or fact common to class members predominate over any questions affecting only individual members.” Generally, a consumer’s damages in a false advertising case are equal to the amount of money needed to make the consumer “whole” — that is, to compensate the consumer for the harm caused by the false claim. But measuring the actual value received by a consumer and the but-for value that consumer would have received absent the false labeling by the product’s manufacturer requires a fact-intensive economic inquiry (for example, questions related to individual consumers’ behavior and preferences, the actual amount consumers paid for the product, time frame of the purchase, etc.). As a result, according to our expert litigators, defendants in product labeling lawsuits can oppose class certification or even file an early motion to decertify by showing that the plaintiffs’ damage model cannot be calculated with proof that is “common” to the class.

Joshua, Crystal, and Grace’s full article can be viewed here. Any manufacturer or retailer of consumer products that is facing a false labeling suit should give it a quick read!

We reported a few weeks ago about a new warning from FDA related to the safety of certain teething-related, non-prescription homeopathic drug products, and in that post we mentioned that both FDA and the Federal Trade Commission (FTC) held public workshops in 2015 to gather information about this uniquely-regulated class of consumer products.  Today, FTC released an Enforcement Policy Statement on Marketing Claims for OTC Homeopathic Drugs  (available here); a Staff Report on the discussions held during the September 2015 workshop (available here); and an FTC blog post summarizing these actions.

For readers who are not familiar with homeopathy, the practice dates back to the 1700s and posits that disease symptoms can be treated by tiny doses of substances that produce similar symptoms if given in larger doses to healthy people (“like cures like”).  Accordingly, modern-day homeopathic remedies that we find ubiquitously in drug stores today are highly diluted formulations, which some people consider to be no more effective than placebo.  The FTC Staff Report provides an excellent overview of how this OTC industry has grown over the past 50 years and the viewpoints presented by both supporters and skeptics of homeopathy.

 The upshot to the new FTC Enforcement Policy is this:
 “No convincing reasons have been advanced either in the comments or the workshop as to why efficacy and safety claims for OTC homeopathic drugs should not be held to the same truth-in-advertising standards as other products claiming health benefits.”

Continue Reading FTC Issues Long-Awaited Enforcement Policy on OTC Homeopathic Drugs

“…Clowns to the right of me, jokers to the left, here I am…”

-Stealers Wheel (1972)


Legal actions regarding “Made in the USA” claims, whether prosecuted by the Federal Trade Commission (FTC) or through various state unfair trade practices acts, often settle early in the proceedings.  For example, in 2014, the FTC issued 16 “closing letters” wherein the target company agreed to revise its “Made in the USA”  claim to clarify that its products, even those assembled in the United States, included imported components. In 2015, the FTC issued 28 such “closing letters”; and in 2016, to date, the FTC has issued 18.

Earlier this month, Chemence, Inc., the Ohio maker of Kwikfix, Hammer-Tite and Flash Glue, entered into a settlement with the FTC.  Chemence was the third glue company that has resolved its claims issues with the FTC since 2015.   Toagosei America, Inc., makers of the Crazy Glue brand, and Gorilla Glue both previously reached agreement with the FTC, with FTC issuing closing letters after both companies agreed to make clear that their products included some imported materials.

Chemence’s path to resolution with the FTC was different.  Continue Reading Stuck in the Middle with the FTC

Evaporated cane juice, a term usually used to inform about sweeteners derived from the fluid extract of sugar cane, is present on the ingredient lists of many products we see on grocery store shelves. However, newly finalized FDA guidance on use of the term “evaporated cane juice” (“ECJ”) as an ingredient in food labels may change things.  Specifically:

FDA’s present view is that “such sweeteners should not be declared on food labels as ‘evaporated cane juice’ because that term does not accurately describe the basic nature of the food and its characterizing properties (i.e., that the ingredients are sugars or syrups) . . . .  Moreover, the use of ‘juice’ in the name of a product that is essentially sugar is confusingly similar to the more common use of the term ‘juice’ – ‘the aqueous liquid expressed or extracted from one or more fruits or vegetables, purees of the edible portions of one or more fruits or vegetables, or any concentrates of such liquid or puree’ (21 CFR 120.1(a)).  Thus, the term ‘evaporated cane juice’ is false or misleading because it suggests that the sweetener is ‘juice’ or is made from ‘juice’ and does not reveal that its basic nature and characterizing properties are those of a sugar.”

Continue Reading FDA Finally Decides that “Evaporated Cane Juice” Is Misleading Consumers