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Vermont Proposes a Non-Solution to “All-Natural” Class Action Lawsuits

February 22, 2012 by Stephen Richer

In our February 8 post, Courts Not a “Natural” at Regulating Food Ads and Labels, I argued that legislatures, or regulatory bodies acting as an “agents” of the legislature, are far better suited to define politicized, complex terms like “natural” than are judges and juries through class action litigation. The context of this argument: class action lawsuits against Frito-Lay claiming that consumers relied upon the misleading use of “all-natural” on the product packages. The term is misleading, the suit asserts, because flour and oils used to make the snacks had their origins in genetically modified seeds.

The good people of Vermont, it seems, through their legislature, have taken this message to heart (though I’m sure they were well along in the drafting process before The Legal Pulse put in its two cents). The state legislature is currently considering a proposal which would require food producers to disclose on the food label the existence of a genetically modified organism (GMO) in any ingredient in the product. More germane to our February 8 post, the bill also would prohibit food producers from dubbing any product created with GMOs as “natural.” Continue Reading »

Posted in Civil Justice & Litigation, Environmental Law & Regulation | Tagged , , | Leave a Comment »

Update: FTC Urges Court to Dismiss EPIC’s Effort to Compel Action Vs. Google

February 21, 2012 by The Legal Pulse

Our February 15 post, Court Should Dismiss Privacy Group’s Suit Vs. FTC Over Google Buzz Settlement, noted that the Federal Trade Commission would be filing its response to EPIC’s demand that FTC file a legal action against Goole for alleged violations of last year’s FTC-Google privacy settlement involving Google Buzz.

FTC filed its motion to dismiss on Friday.

The Commission’s lawyers didn’t mince words.  It suggested the court dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1) “because [EPIC's] claim is ‘so attenuated and unsubstantial as to be absolutely devoid of merit.’” The motion cites a mountain of precedent supporting the government’s use of discretion in determining when and when not to use its enforcement authority. 

And just in case the federal court feels FTC is somehow shirking its consumer protection duties, the motion devotes two pages to defending the Commission’s commitment to online privacy, stating, “the FTC takes very seriously the need to protect the privacy of consumers, and has devoted substantial resources to this effort.”

EPIC will be filing its response to FTC’s motion to dismiss today.

Posted in Regulation of Free Enterprise | Tagged , , | Leave a Comment »

Finger on the Pulse: From Our Blogroll and Beyond

February 17, 2012 by The Legal Pulse

Posted in Regulation of Free Enterprise | 1 Comment »

Court Should Dismiss Privacy Group’s Suit Vs. FTC Over Google Buzz Settlement

February 15, 2012 by Glenn Lammi

Cross-posted by Forbes.com at WLF contributor site

On Friday, a federal court in Washington, D.C. will hear what the Federal Trade Commission (FTC) thinks about a lawsuit the online privacy advocate EPIC has filed demanding that FTC charge Google with violations of a settlement agreement between FTC and Google involving Google Buzz.

EPIC isn’t suing Google, and EPIC wasn’t a party to the settlement agreement. But the group wants FTC to embrace EPIC’s view that Google’s soon-to-be-implemented online privacy policy changes tread on certain aspects of the consent order. EPIC argues that administrative law permits third parties to force such action on a federal agency. Because such a view directly encroaches on agencies’ discretion and shifts enormous power to “public interest” activists, business competitors, and assorted gadflies, courts have generally rejected such arguments.

The key issue in this case is not whether Google’s privacy changes run afoul of last year’s agreement with FTC. EPIC obviously thinks so, and devotes most of its injunction motion explaining why. Google doesn’t think so, and provided their thoughts to FTC last month according to one report.

The issue here is whether a non-party to the FTC-Google agreement can force FTC to fine Google. EPIC acknowledges that it cannot bring action under the Federal Trade Commission Act (FTC Act), and instead proceeds under the Administrative Procedures Act (APA) section allowing challenges to agency action “unlawfully withheld.” EPIC tries to make the case that the FTC Act creates a non-discretionary duty for the Commission to act if a consent agreement is violated. But the language EPIC cites relates to the need for the violating party to pay a fine, not for the FTC to take action. FTC has the ultimate discretion over whether a violation occurred and whether to seek a fine. The Supreme Court stated this very clearly in a 1985 APA case, Heckler v. Chaney. Continue Reading »

Posted in Regulation of Free Enterprise | Tagged , , | Leave a Comment »

Supreme Court Cert Petition Spotlights Speech Limits on Securities Market

February 14, 2012 by Glenn Lammi

Cross-posted by Forbes.com at WLF’s contributor site

Distinguished First Amendment scholar Frederick Schaeur once wrote in the Harvard Law Review, “It might be hyperbole to describe the Securities and Exchange Commission as the Content Regulation Commission, but such a description would not be wholly inaccurate.” SEC has yet to heed a suggestion from one of its own advisory committees to relax prohibitions on general solicitations and advertising, and has ignored a letter from the New York City Bar noting that New York and 30 other states take a more respectful approach to securities speech regulation.

The Commonwealth of Massachusetts is not one of those 31 states, as hedge fund Bulldog Investors learned in 2006. The enforcement action taken by the state against Bulldog, and Bulldog’s constitutional challenge of that action, has resulted in a cert petition filed with the U.S. Supreme Court that could shock SEC and securities speech-averse states into the 21st Century. Continue Reading »

Posted in Commercial Free Speech, Regulation of Free Enterprise | Tagged , | 1 Comment »

Finger on the Pulse: From Our Blogroll and Beyond

February 10, 2012 by The Legal Pulse

  • Cameras finally coming to the US Supreme Court? (Blog of Legal Times)
  • Odd procedural argument won’t stop Justices from ruling on constitutionality of Affordable Care Act (Cato @ Liberty)
  • Does the current FCPA enforcement climate make it more or less likely that companies will self-report violations? (Corruption, Crime & Compliance)
  • Pennsylvania adopts clear regulatory standards that encourage natural gas exploration (The American Interest)
  • FDA (finally) lays out guidelines on how it will determine biosimilarity when reviewing “generic” versions of biotech drugs (FDA Law Blog)
  • Noodle on this: European governments support business defendants in SCOTUS Alien Tort Statute case, while U.S. government supports plaintiffs (Lawfare)
  • Patent troll sues over claim that he owns the Internet, and he might win (Wired’s Threat Level)

Posted in Regulation of Free Enterprise | Leave a Comment »

Courts Not a “Natural” at Regulating Food Ads and Labels

February 8, 2012 by Stephen Richer

In AEP v. Connecticut, the U.S. Supreme Court unanimously declared that questions of a political nature are best decided by the democratic legislative process, not by litigation through the courts.

Unfortunately, the AEP message did not get to everyone. Plaintiffs in recently launched lawsuits against Frito-Lay are asking the judiciary to clarify a term which has become quite politicized: “natural.” And by bringing the suits as class actions, the lawyers are looking to enrich themselves at the expense of Frito-Lay – the potential victim of a currently undefined, and highly disputed, term.

The suits in California and New York allege that Frito-Lay unfairly promoted Tostitos and SunChips as “all-natural” when, according to the plaintiffs, the products contain corn and vegetable oils from genetically modified plants.  (Reuters)  The complaint filed in Eastern District of New York by a plaintiff (ironically) named Shake, notes, “The reasonable consumer assumes that GMOs [genetically modified organisms] are not ‘all natural.’  Thus, Tostitos’ and SunChips’ advertising is deceptive to consumers.”  Continue Reading »

Posted in Civil Justice & Litigation, Health Care | Tagged , , , | Leave a Comment »

Appellate Experts Assess Supreme Court at Mid-term Point

February 8, 2012 by The Legal Pulse

Yesterday, Washington Legal Foundation held its annual “High Court Halftime” briefing program to look back on some decisions from the Supreme Court’s October 2011 term and to preview upcoming arguments.

The video of this program is available here for on-demand viewing.

Hosted by WLF advisory board chairman, The Honorable Dick Thornburgh, and headlined by veteran Supreme Court advocate Carter Phillips, the briefing delved into the Court’s views on civil litigation, government regulation, federalism, and separation of powers. The speakers devoted significant attention to the numerous issues before the Court in challenges to the Affordable Care Act federal health care reform law. The 5.5 hours devoted to these cases is the most permitted by the Court since a 1970 rule change which limited each litigant to 30 minutes of argument time.

Speaker Cory Andrews of WLF’s Litigation Division also detailed a petition for certiorari WLF filed with the Court last week on behalf of small farmer Cory King, a victim of overzealous federal criminal prosecution.  Information about the case is available here.

Posted in Civil Justice & Litigation, Criminalization of Free Enterprise, Health Care, Regulation of Free Enterprise, U.S. Supreme Court | Tagged , , , | Leave a Comment »

SEC’s Strict Liability Claw Strikes Again

February 6, 2012 by Glenn Lammi

Oooo, the Claw

Cross-posted by Forbes.com at WLF’s contributor page

In a July 2011 Legal Pulse post, SEC to Join HHS in Effort to Drop the Claw of Strict Liability on Business Managers, we decried the federal punishment of business executives based solely on their status, rather than on whether they actually violated the law. Such status crimes, we argued, do nothing to deter law breaking and by punishing blameless people, cheapen the concept of punishment.

The Securities and Exchange Commission has once again dropped “the claw” on a business manager who broke no law. SEC deployed its authority under § 304 of the Sarbanes-Oxley Act to “claw back” a $450,000 bonus from a medical product company’s former CEO, Brian Moore. Mr. Moore received the bonus during a time when four company finance executives were fraudulently misstating revenues and assets. Mr. Moore played no part in the fraud, which the finance execs actively hid from him and other senior company leaders. He was an executive at the wrong place and the wrong time. As the SEC cavalierly said in a press release about a previous clawback target, Mr. Moore was “captain of the ship and [he]profited.” Continue Reading »

Posted in Criminalization of Free Enterprise, Regulation of Free Enterprise | Tagged , | Leave a Comment »

WLF Advisory Board Member Named as U.S. Golf Association President

February 3, 2012 by The Legal Pulse

Washington Legal Foundation congratulates Jones Day partner and WLF Legal Policy Advisory Board member Glen D. Nager who, as of Saturday, February 4, will be President of the United States Golf Association.

Glen has been the USGA’s Vice President and he served as its General Counsel from 2006 to 2008.  His elevation to President was discussed in a Washington Post article this morning, a quote from which appeared at the top of the front page of the Post‘s sports section:

She hits the ball disgustingly straight. There was a reason she was the center of the court all those years.”

Posted in Regulation of Free Enterprise | Leave a Comment »

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