Aldi Sued Over “Underfilled” Coffee In Class Action Lawsuit

Last week, a putative class action lawsuit was filed against Aldi Inc. regarding certain Beaumont Coffee products sold in its stores. According to the complaint, the packaging for the coffee product states that a single package will make “Up to 210 6 oz Cups.” According to package instructions, the plaintiffs assert that a single serving consists of one tablespoon of ground coffee and one serving of water. To make the advertised 210 servings, the plaintiffs allege that the package would need to contain 210 tablespoons of ground coffee, not the 137 tablespoons contained in the purchased package. An example of the alleged claim appear on the packaging here:

When compared to the advertised cups of coffee available to be made with this product, the plaintiffs allege that the product is underfilled by over 34%.  Despite one of the named defendants residing in Illinois, and the complaint being filed in U.S. District Court for the Northern District of Illinois, the complaint alleges that the packaging constitutes false advertising pursuant to several California and New York unfair or deceptive acts or practices statutes, including the California Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law.

Takeaway: Most slack fill cases involve allegations that a product contains too much empty space commensurate with the overall package size. In this case, however, the plaintiffs allege that the package is underfilled based on the claims of contained on the package itself. Advertisers that make claims about number of servings per package should ensure that such claims match with the instructions and nutrition facts label.

FTC Issues Largest Ever Judgment Over Made In The USA Claims

Last week, the Federal Trade Commission issued a $1.2 Million judgment against glue maker, Chemence. Chemence is the manufacturer of various glues. The judgment originates from the production and manufacturing of various glue products with pre-packaged and pre-labeled Made in the USA claims. Additionally, the FTC alleged that Chemence represented to third parties that their private label products were all or virtually all made in the USA. An example of Chemence’s packaging, including both unqualified Made in the USA claims and use of the American Flag are below:

According to the complaint, Chemence violated a 2016 order with the FTC over identical, unqualified Made in the USA claims. Moreover, the FTC alleged that Chemence’s CEO declared in a 2017 compliance report under penalty of perjury, that Chemence changed the packaging to include the following revised claim: “Made in USA with US and globally sourced materials.”

In addition to the monetary judgment, Chemence is barred from making unqualified Made in the USA claims unless it can show that both the final assembly and all or virtually all of the ingredients of its glues are Made in the USA. Chemence must also notify third party sellers of its white-label products of the order, and provide compliance reports to the FTC.

Takeaway: In the largest-ever judgement against a company over Made in the USA claims, the FTC reaffirmed its commitment to ensuring consumers understand the source of origin of products they buy. This case serves as a reminder that any unqualified use of the American Flag or Made in the USA will require both the assembly of the products and the component ingredients to be all or substantially all made in the USA.

Twitter Announces, “Fleets”

On November 17, 2020, Twitter introduced Fleets, “a new way to join the conversation.”  Fleets are “fleeting” tweets; ones that disappear from an account after 24 hours.  According to Twitter’s blog, the impetus behind the product iteration is that users feel that posting permanent Tweets presents too much social pressure.  Users can “Fleet” various media, including text, photos, video, and even other Tweets.  From there, users can add backgrounds and text to a Fleet such as emojis and (soon) stickers.

Advertisers can harness this technology much in the same way they utilize Instagram Stories, including in influencer campaigns and to engage in social moments.  Fleets can also be used to comment on other Tweets.  From an analytics perspective, Fleets allow users to see all those who view it, even if the viewer has a protected account.  Twitter announces that soon, live broadcasting will be available via Fleets.

Of course, Fleets must comply with Twitter’s Terms of Use and all applicable laws and guidance, such as the Federal Trade Commission’s Endorsements and Testimonials Guides.  Advertisers can add text, such as #ad, clearly and conspicuously to a Fleet to disclose a material connection between an advertiser and the user who posted the Fleet.  And, though temporary, Fleets are still subject to the failsafe screen grab so all standard legal reviews and best practices should be followed.

Takeaway: New developments in social media provide exciting opportunities for marketers to engage audiences and showcase their products and services in new ways.  However, marketers may need reminding that the same legal requirements apply even when the marketing moment is fleeting.

Supermodel Sues for Alleged Unauthorized Use of Her Likeness

On November 16, 2020, supermodel Anastassia Khozissova filed a $20 million lawsuit in the New York state court against Ralph Lauren Corp. (“Ralph Lauren”) and HBO for their alleged unauthorized use of her likeness. Ms. Khozissova has been featured in campaigns and runway shows for numerous luxury brands, including Ralph Lauren. The model once shared a close working relationship with Ralph Lauren having been featured as the only model in the brand’s book “Diary of a Collection,” which was originally published in 2005. Ms. Khozissova alleges that her relationship with Ralph Lauren has since dissolved.

Ms. Khozissova purports that Ralph Lauren continues to use her photos in the brand’s Moscow store and New York City restaurant Polo Bar. Her image is also shown multiple times in “Very Ralph,” a documentary about Ralph Lauren that airs and is available for streaming on HBO.

Ms. Khozissova alleges that these acts are in violation of New York Civil Rights Law § 50 because Ralph Lauren and HBO failed to obtain her written consent to such uses of her likeness. The statute provides that “A…corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person…is guilty of a misdemeanor.” N.Y. Civ. Rights Law § 50. In addition to monetary damages, Ms. Khozissova seeks attorney fees, court costs and injunctive relief.

Takeaway: Brands should ensure that they have sufficient rights to use a models’ likenesses. When preparing agreements, consider whether a right to use a model’s likeness extends beyond a specific campaign and is inclusive of other advertising and marketing messages. If that right is not secured in prior agreements, brands should ensure that they obtain the necessary consents in subsequent agreements.

Trump International Hotel Faces BIPA Class Action Lawsuit

Late last month, the Trump International Hotel in Chicago became the latest target hit with a class action lawsuit under the Illinois Biometric Information Privacy Act (BIPA).

Gianni Bartucci alleges he and other employees of the luxury downtown Chicago hotel were required to scan their handprints and/or fingerprints each time they clocked in and clock out of a work shift.  But according to Bartucci, the hotel violated BIPA by failing to provide prior written notice and obtain prior written release from employees before doing so.  Bartucci also alleges the hotel failed to have a publicly available retention schedule and destruction guidelines.

Trump International now faces alleged statutory damages of $1,000 for each negligent violation, and $5,000 for each willful/reckless violation.  This means alleged damages between $1,000 and $5,000 each time an employee scanned her or his handprints and/or fingerprints for two (2) to as much as five (5) years.

Takeaway: To help mitigate the risk of a BIPA lawsuit, employers should comply with the following BIPA notice requirements: provide prior written notice to employees that their biometric data is being collected and stored, and the purpose and duration for such uses.  Additionally, employers should obtain a written release from the employees that authorizes such uses, and make public a retention schedule and destruction guidelines that details the timeline (no less than three (3) years from the date of the employee’s last interaction with the company) for the eventual destruction of the employees’ biometric data.

Restarting advertising production? New U.S. Department of Labor’s “joint employer” rule shutdown by NY federal judge

As we head into fall 2020, many advertising companies are beginning – if they have not already done so – to restart media shoots. Just as they did before the pandemic hit, media shoots raise a broad swath of questions on the employment law front. One of the principal issues in this regard is the question of which entity(ies) is considered the talent’s employer.

This is a particularly important issue because of the so-called “joint employer” doctrine, which refers to a situation whereby a worker is deemed employed by more than one entity at the same time. If multiple entities are considered joint employers, they can then generally each be held jointly and severally liable for workplace violations (e.g., discrimination, harassment, retaliation, unpaid wages). The joint employer doctrine is often invoked in the advertising and media space, and can result in unforeseen corporate liability.

To that end, earlier this year, the U.S. Department of Labor (DOL) issued a rule updating its interpretation of the “joint employer” doctrine under federal wage and hour law. On September 8, 2020, however, a New York federal judge struck down a significant portion of the rule. Judge Gregory H. Woods’ 62-page decision delivers a significant blow to businesses that had relied on the business-friendly nature of the DOL’s new rule.

Reed Smith’s New York labor and employment team has prepared an article summarizing this decision and its impact on the business community. Click here to read the entire post on Employment Law Watch. If you have any questions about how this decision impacts your company – particularly as it relates to your use of talent on media shoots – please contact Mark Goldstein at mgoldstein@reedsmith.com or Stacy Marcus at smarcus@reedsmith.com.

Another NY Update: Legislators Pass Protection of Post-Mortem Right of Publicity

The New York State Legislature recently passed a bill that expands the State’s current laws to protect one’s right of publicity after death.  Under current privacy laws in NY, permission is required to use a living individual’s name, voice, or likeness for commercial purposes (i.e., in advertising materials).

While the bill – which awaits signature by Governor Andrew Cuomo – will not change the current law in relation to living individuals, it would create a new right of publicity for the deceased, whose publicity rights (e.g., name, likeness, photograph, voice, and signature) have commercial value at the time of their death or because of their death. Such right would be transferable and descendible.  For example, it could be exercised by the deceased individual’s estate or an individual who owns or has inherited 51% or more of such rights.  Subject to certain enumerated exceptions, the bill would also create liability for the use of “deep fakes” and deceptive use of a deceased performer’s “digital replica” if such use is likely to deceive the public into thinking the use was authorized by the deceased person or its successor (note this last element would only apply to “performers”, which is defined in the bill as a person who lived in NY at the time of death and who was regularly engaged in singing, acting, dancing, or playing a musical instrument). The bill would provide post-mortem rights for forty years after the person’s death.

In order to bring an action under the bill, the deceased must be domiciled in NY at the time of death and must have died at least one hundred and eighty days after the bill becomes law.  To file a lawsuit under the bill, the deceased’s estate must register with the Office of the NY Secretary of State.  Keep in mind that this right is not retroactive, and therefore, the risk of litigation is likely reduced.

Takeaway:  An advertiser should carefully consider the scope of consent it has to use an individual’s publicity rights, including when the individual is deceased.  Rights of publicity are protected under state and common law and some, but not all, states provide for a post-mortem right of publicity.  However, not every state applies its post-mortem publicity right the same way, so the analysis when determining whether permission is needed to use a deceased person’s publicity rights can be complex.  New York’s new bill, if signed by the Governor, would certainly raise new issues (and likely lawsuits) where brands fail to obtain the necessary consent from an estate to use a famous New York celebrity’s publicity rights in advertising where he or she passed away after the New York post-mortem right goes into effect.

Stay up to date on key advertising and marketing law issues and earn valuable CLE

To stay current on key advertising and marketing law issues and earn valuable CLE, we recommend registering for the ANA Law & Public Policy 1-Day Conference, taking place virtually on September 15, 2020 from 11:00 am to 4:00 pm.  If you’re an ANA member client-side marketer, there is no charge for you to attend.  If not, the fees are very reasonable.  That’s an offer you and your colleagues cannot refuse!

The agenda includes:

  • A keynote from FTC Commissioner Noah Joshua Phillips;
  • To Produce of Not to Produce – Production concerns post-COVID with Stacy Marcus of Reed Smith LLP & the Joint Policy Committee and Matt Miller of AICP;
  • Will Three Times Be the Charm? – A discussion of digital accountability with Keri Bruce of Reed Smith LLP and the meaning of the results in recent programmatic report issues by ISBA and PwC;
  • Music to Our Ears – risks in using music on online platforms with Rob Newman of Loeb & Loeb LLP;
  • What’s Happening at the ANA with Dan Jaffe;
  • An Introduction to the Partnership for Responsible Addressable Media (PRAM) with ANA’s Bill Tucker and Stu Ingis of Venable LLP; and
  • A series of 5 minute presentations on key issues with long form videos available on demand from top outside counsel including Amy Mudge, Nikki Bhargava, Hanna Taylor, and Tara Sugiyama Potashnik.

Please click here to view the full agenda and to register.

If you have any questions, please feel free to contact Dan Jaffe at 646.369.4886 or at djaffe@ana.net, Keri Bruce at 212.549.0220 or at kbruce@reedsmith.com, or Doug Wood at 212.549.0377 or at dwood@reedsmith.com.

New York Bill Gives Credit Card Holders 90 Days to Redeem Rewards

The New York Senate recently passed a bill that is expected to give New York residents a 90-day grace period to redeem credit card rewards after their account is changed, canceled, closed, or terminated. The bill will address issues where a cardholder’s account is closed without notice for inactivity, default, or delinquency – in such case, the cardholder may not have the opportunity to redeem his or her credit card rewards. While the bill has passed through the Senate, it is currently awaiting approval from the State’s Assembly.

Most credit card issuers that offer reward programs include terms and conditions regarding point/reward redemption when an account is closed or no longer active. For example, one bank states that points will not expire “as long as your account is open,” but the cardholder will lose all of his or her points if the account status changes or the account is closed for reasons that include delinquency. Under the bill, a notice must be sent to the cardholder within 15 days of the cancellation, closure, termination, or modification of the credit card account. The cardholder will have 90 days to redeem, exchange, or use the rewards.

Takeaway: This bill protects New York State residents from losing the rewards they earned through credit card purchases. Card issuers may be wise to start considering updates to its terms and conditions that give cardholders a grace period to redeem their rewards, otherwise more states may follow New York’s lead. For now, however, cardholders should redeem or transfer their rewards before cancelling or changing their credit card account.

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