Second Circuit Shuts Down Duplicative Regulation by Litigation of Organic Products

organicA January 9, 2018 WLF Legal Pulse post applauded a federal district court’s textbook application of implied-preemption analysis in dismissing a consumer-protection suit that alleged mislabeling of an organic infant formula. A recent decision of the U.S. Court of Appeals for the Second Circuit in Marentette, et al. v. Abbott Laboratories, Inc. similarly utilized implied preemption to reject a putative class action presenting nearly identical claims involving another brand of organic infant formula. The decision should put an end to plaintiffs’ use of state consumer-protection suits to regulate products bearing the U.S. Department of Agriculture’s (USDA) “Organic” symbol. Continue reading “Second Circuit Shuts Down Duplicative Regulation by Litigation of Organic Products”

Another California Intrusion on Businesses’ Free Speech Fails in Court

FirstAmendmentFor a state with cities like Berkeley, which birthed the Free Speech Movement 54 years ago, California’s record on respecting the First Amendment is surprisingly spotty. That is especially true for the expressive activities of businesses. The state, as well as its municipalities, often curtail businesses’ speech, or compel them to speak, as a way to demonstrate government is “doing something” to solve complex social or public-health problems.

Occasionally, but not nearly often enough, courts reintroduce California’s censors to the First Amendment, as the U.S. Court of Appeals for the Ninth Circuit did last year in striking down San Francisco’s warning-label mandate for “sugary” drinks. On February 20, a Northern District of California judge handed the state its latest speech-regulation defeat, striking down a law designed to limit information that entertainment database company IMDb.com could publish (IMDb.com Inc. v. Becerra). Continue reading “Another California Intrusion on Businesses’ Free Speech Fails in Court”

Cutting the Cord: “Smart TV Box” Devices and Copyright Infringement

copyright

Innovative ways to view broadcast content such as scripted shows, sporting events, and recently released movies are advancing at breakneck speed. Buyers should beware, however, that not all methods for accessing entertainment content are on the up-and-up. Several devices, for instance, promise extreme “cord-cutting” and incredibly wide access to content at a relatively low, one-time cost.

There’s a good reason why these devices are so cheap and offer so much: they provide a gateway to pirated content, facilitating copyright infringement on a massive scale. Unsurprisingly, the sellers of two such “smart TV boxes” are embroiled in copyright litigation. Continue reading “Cutting the Cord: “Smart TV Box” Devices and Copyright Infringement”

Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process

d of washingtonThe Federal Trade Commission (FTC) has developed a well-known penchant for using individually negotiated settlement agreements and consent decrees to announce for the first time what qualifies as “unfair” or “deceptive” conduct under the FTC Act. In the data-privacy arena, FTC views these enforcement actions (and the resulting consent decrees) as a source of “common law” that places the business community on sufficient notice of what data-security practices § 5 of the FTC Act requires.

The U.S. District Court for the Western District of Washington recently ratified that view in a controversial ruling, Veridian Credit Union v. Eddie Bauer. The case arose following a 2016 cyberattack on Eddie Bauer’s network that compromised customers’ payment-card data. Veridian Credit Union, whose cardholders had their data stolen after shopping at Eddie Bauer, brought suit under Washington’s Consumer Protection Act (CPA), which like § 5 of the FTC Act also allows courts to award treble damages to private plaintiffs who are injured by “unfair” or “deceptive” acts. Veridian alleged that Eddie Bauer’s failure to adopt data-security measures that FTC has required in other cases constitutes an “unfair” practice under the Washington CPA. Continue reading “Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process”

New First Amendment Challenge Takes Aim at California’s Listing of Glyphosate as a Potential Carcinogen Under Prop 65

warningLong the subject of much controversy, California’s Proposition 65 law prohibits businesses from exposing Californians to chemicals “known to the State of California to cause cancer” without first providing a warning. California’s Office of Environmental Health Hazard Assessment (OEHHA) publishes a list of chemicals “known to the State of California to cause cancer.” By statute, that list must include substances designated as potential carcinogens by the International Agency for Research on Cancer (IARC), an international non-governmental entity. Continue reading “New First Amendment Challenge Takes Aim at California’s Listing of Glyphosate as a Potential Carcinogen Under Prop 65”

Ninth Circuit Overturns State Licensing Scheme Forcing Businesses to Incorporate in California

9thCirAccording to one California observer, the “list of businesses abandoning California for more hospitable business environments reads like a roll call of top companies.” That corporations have been fleeing California’s escalating costs and over-the-top regulation is not all that surprising. But few may be aware of one of the Golden State’s more creative efforts to reverse that trend: enacting laws that force companies to incorporate in California if they want to do business there.

The U.S. Court of Appeals for the Ninth Circuit recently took up—and overturned—one such law in Nationwide Biweekly Admin. v. Owen. The case arose from Nationwide’s biweekly mortgage loan repayment program, which facilitates homeowners with mortgages who wish to make 13 monthly mortgage payments a year, ostensibly reducing a 30-year mortgage into a 23.9-year mortgage.  Continue reading “Ninth Circuit Overturns State Licensing Scheme Forcing Businesses to Incorporate in California”

Rejection of Subway “Footlong” Settlement Highlights Absurd Incentives of Class Actions

1ftIn early 2013, when Australian teenager Matt Corby took to social media to share a photo of his recently purchased Subway “foot long” sandwich next to a tape measure revealing that the sandwich measured only 11 inches in length, he never could have anticipated the “viral” chain of events that he had just set into motion.

Other Subway customers and media outlets soon descended on Subway franchises to undertake their own sandwich measurements, prompting the New York Post to announce that “Some Subway ‘Footlong’ Subs Don’t Measure Up.”   According to the Post, four out of seven footlong sandwiches randomly purchased at Subway restaurants in Manhattan, Brooklyn, and Queens measured less than 12 inches in length (ranging from 11 to 11.5 inches). Continue reading “Rejection of Subway “Footlong” Settlement Highlights Absurd Incentives of Class Actions”