In this issue of Direct Connect, the big news is the FTC making
good on its promise to use its Penalty Offense Authority to make
sweeping civil penalty threats to industry. In this week's notice, the FTC purports to
put more than 1,100 direct selling companies and others in the gig
economy on notice of the potential for civil penalties for eight
categories of misrepresentations related to "money-making
opportunities" (a previously unused and still undefined
term).
The cover letters to industry also reference the notice of Penalty
Offense Authority published last week on endorsements and
testimonials. From the FTC's perspective, why not?
Throwing in the notice on endorsements and testimonials along with
the "money-making opportunities" notice opens up the
companies on today's list to threats of civil penalties both
for misrepresentations related to the business opportunity and
endorsements. But as we've discussed extensively here,
the FTC's legal authority to use the Penalty Offense Authority
to circumvent notice and comment rulemaking and open up civil
penalties in this way is far from certain.
Also in this issue of Direct Connect: food and supplement
litigation and regulatory highlights, California updates its
automatic renewal law, and Rohit Chopra leaves the FTC to head the
CFPB.
Next Up – Earnings Claims: Notice of Penalty Offenses Sent to 1,100 Direct Selling Companies and Others in the Gig Economy
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.
It Ain't Easy Being Yeezy: California Sues Kanye West's Apparel Brand for Alleged Shipping Delays
As supply chain woes continue, late last week several District
Attorneys on behalf of the State of California filed a lawsuit
against Kanye West's apparel brand, Yeezy, alleging that the
Yeezy companies violated state law because they failed to ship
items within thirty days and failed to provide adequate delay
notices, or provide an offer of a refund. According to the
Complaint, the issues could go back at least four years, preceding
the current COVID-related delays. The state seeks civil penalties,
restitution, injunctive relief, and attorneys' fees.
California Updates its Automatic Renewal Law
In 2017, California updated its automatic renewal law to
create some of the strictest requirements in the country. Now, just
four years later, the Governor Newsom signed a new law that will
impose even stricter requirements.
Food Industry Litigation and Regulatory Highlights, July – September 2021
If the summer slide and the start of school kept you too busy to
follow what's going on in the food scene, we hear you!
Catch up on key developments below in this issue of our Food Industry Litigation and
Regulatory Highlights.
Chopra Confirmed as Next CFPB Director; Departure Leaves FTC Evenly Divided
The Senate yesterday confirmed current FTC Commissioner Rohit Chopra as the new Director of the Consumer Financial Protection Bureau (CFPB). The 50-48 vote to confirm was along party lines and followed Vice President Harris's breaking of a 50-50 tie to invoke cloture and end debate on Chopra's nomination.
Resources
Advertising and Privacy Law Resource Center
The Advertising and Marketing and Privacy and Information Security practice groups at Kelley Drye have organized this Advertising and Privacy Law Resource Center to help your company navigate the legal landscape. While this practical site is not exhaustive, it addresses key legal topics relevant to advertising and marketing, privacy, data security, and consumer product safety and labeling. Feel free to contact us to discuss any specific claims, privacy or data security practices, or for any other questions.
Advertising and Privacy Law Desktop Reference Guide
The laws regulating advertising and privacy can seem daunting. The potential for liability arising from inaccurate or misleading advertising or lax privacy practices can be significant, both as a consequence of regulatory enforcement and of litigation. The Advertising & Marketing and Privacy & Information Security practice groups at Kelley Drye & Warren LLP have organized this "Advertising and Privacy Law Desktop Reference Guide" to help your company navigate the legal landscape. While this practical guide is not exhaustive, it addresses key legal topics relevant to advertising and marketing, privacy, data security, and consumer product safety and labeling.
TCPA Tracker
The TCPA (Telephone Consumer Protection Act) Tracker is produced as a collaborative effort between Kelley Drye's Litigation, Advertising/Privacy and Communications practices to help you stay current on TCPA (and related) matters, case developments and provide an updated comprehensive summary of TCPA petitions pending before the FCC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.